Lecture 1

Marketing – Managing Profitable

Customer Relationships

Saturday, May 2, 202 1

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 What is Marketing?

“Marketing” can be defined as:

The process by which companies create value for
customers and build strong customer
relationships in order to capture value from
customers in return

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Marketing Process
Understand the Design a Construct an Build profitable
marketplace and customer – driven integrated relationships and
customer needs marketing marketing program create customer
and wants strategy that delivers delight
superior value

Create value for customers and build customer relationships

CAPTURE VALUE FROM

CUSTOMERS TO CREATE
PROFITS AND CUSTOMER
EQUITY
Capture value from
customers in return

A simple model of the marketing process

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Core Marketing Concepts

Needs, wants,
and demands

Markets Products
and services

Exchange, Value,
transactions, satisfaction,
and relationships and quality
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What are Consumer’s Needs, Wants
and Demands?

 Needs - State of felt deprivation

 Most often for basic items such as food and clothing and complex
needs such as for belonging. i.e. I am hungry.
 Wants - Form that a human need takes as shaped by culture
and individual personality
 E.g., I am hungry and I want a hamburger, French fries, and a soft
drink.
 Demands - Human wants backed by buying power.
 i.e. I have money to buy this meal. I want jeans but it should be
Levi’s

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What Will Satisfy Consumer’s Needs
and Wants?
Products
Anything that can be Offered to a Market to Satisfy a Need or Want

Experiences
Experiences Persons
Persons Places
Places

Organizations
Organizations Information
Information Ideas
Ideas

Services
Activities or Benefits Offered for Sale That Are Essentially
Intangible and Don’t Result in the Ownership of Anything

Marketing Myopia: mistake of paying more attention to the specific products a

company offers than to the benefits and experiences produced by these products.
Example ??? 6
How Do Consumers Choose among
Products and Services?

Value Gained From Owning a Product and

Costs of Obtaining the Product is
Customer Value

Product’s Perceived Performance in Delivering Value

Relative to Buyer’s Expectations is
Customer Satisfaction

Total Quality Management Involves Improving the

Quality of Products, Services, and
Marketing Processes

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How Do Consumers Obtain Products
and Services?

Exchanges Transactions

Relationships
Building a Marketing
Network Consisting of
The Company and All
Its Supporting
Stakeholders

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Market

 Exchange and relationships lead to the

concept of MARKET
 Market – The set of actual and potential
buyers of a product
 Creating relationships
 Search buyers, identify their needs, design products,
set suitable prices, promote them, store & deliver etc
etc…

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Who Purchases Products and
Services?

People Who
Exhibit Need Market – Actual
Ethical
Buyers who
Factors
Situational Buyers
share a
Unexpected
Resources to particular need
Exchange or want that
can be satisfied
Attitudes
through
of Potential
exchange
Others or Buyers
Willingness to relationships.
Exchange

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Modern Marketing System

Suppliers
Suppliers

Company
Company
Competitors
Competitors (Marketer)
(Marketer)
Environment

Environment
Marketing
Marketing
Intermediaries
Intermediaries

End
End User
User
Market
Market
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Marketing Philosophies

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Marketing Management Philosophies
Production Concept •Consumers favor products that are available and highly
affordable.
• Improve production and distribution.
• Lenovo example

Product Concept •Consumers favor products that offer the most quality,
performance, and innovative features.
• Marketers focus on continuous product
improvements
• But sometimes lead to marketing myopia –
Mousetrap example

Selling Concept •Consumers will buy products only if the company

promotes/ sells these products.
• Push theory
• Practiced with unsought goods such as insurance
• High risks – focuses on creating sales rather than
long term profitable customer relationships
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Marketing Management Philosophies
Marketing Concept •Achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the
desired satisfactions better than the competitors
• Customer centered – sense and respond philosophy
• Finding right products for your customers

Societal Marketing Company makes good marketing decisions by considering

••Company
Concept consumers’ wants, the company’s requirements, consumers’ long-
run interests, and society’s long-run interests.

Society (Human Welfare)

SOCIETAL
MARKETING
CONCEPT
Consumers (Want
satisfaction) Company (Profits) 14
Marketing and Sales Concepts Contrasted
Starting Focus Means Ends
Point

SELLING PROFITS
EXISTING
FACTORY AND THROUGH
PRODUCTSPROMOTING
VOLUME
SELLING CONCEPT

INTEGRAT
PROFITS
CUSTOME ED
MARKET THROUGH
R NEEDS MARKETI CUSTOMER
NG SATISFACTION

MARKETING CONCEPT
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Holistic Marketing
 Holistic Marketing Concept is probably the
newest approach to marketing and the latest
business concept. It originated as a response to
fundamental changes in the current marketing
environment .
 Relationship Marketing
 Internal Marketing
 Performance Marketing.
 Integrated Marketing (4Ps)

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Holistic Marketing
 Philip Kotler and Kevin Lane Keller define this
holistic approach as follows: “A holistic marketing
concept is based on the development, design and
implementation of marketing programs, processes
and activities that recognize the breadth and
interdependencies. Holistic marketing recognizes
that ‘everything matters’ with marketing and that a
broad, integrated perspective is necessary to attain
the best solution.”

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Holistic Marketing

 Holistic marketing concept is a part of the series on concepts

of marketing and it can be defined as a marketing strategy
which considers the business as a whole and not as an entity
with various different parts. According to holistic marketing
concept, even if a business is made of various departments,
the departments have to come together to project a positive
& united business image in the minds of the customer.
Holistic marketing concept involves interconnected marketing
activities to ensure that the customer is likely to purchase
their product rather than competition.

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Marketing Management

 Art and science of choosing

markets and building
profitable relationships with
them
 What’s the target market?
 What’s our value
proposition?

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