MARKETING

What is Marketing
It is the process of planning and executing
the conception, pricing, promotion and
distribution of ideas, goods and services to
create exchanges that satisfy individual
and organizational goals.
Marketing
 Marketing is a pre-development function
 Marketing looks for unmet needs and
customer preferences
 Marketing is increasingly becoming a
strategic function which handles company
brand as well as product brands
 Marketing has well-established theories
and best practices
Difference between Marketing and
Selling
1) Emphasis on product.
2) Company manufacturers the
product first and then decides to
sell it.
3) Management is sales volume
oriented.
4) Planning is short term
oriented in terms of today’s
products and markets.
1) Emphasis on customer needs &
wants.
2) Company first determines
customer’s needs and wants and
then decides on how to deliver a
product to satisfy their needs.
3) Management is profit oriented.
4) Planning is long term oriented in
terms of new products, tomorrow’s
markets and future growth.
5) Stresses needs of a seller. 5) Stresses needs of a seller.

6) Views business as a goods 6) Views business as a consumer

producing process. satisfying process.

7) Emphasis on staying with 7) Emphasis on innovation,

existing technology and reducing providing better value to the
costs. customers by adopting a superior
technology.

8) Selling views customers as a 8) Marketing views customers as

last link in business. the very beginning of a business.
NEEDS, WANTS AND DEMAND
 A need refers to something which is deep rooted in an
individual's personality. State of felt deprivation
example: Need food

 Wants are the culturally influenced manifestation of a deep-

seated need. The form of needs as shaped by culture and
the individual
example: Want a Big burger

 Demand is the willingness and ability of buyers to purchase

a product that satisfies their need. Wants which are backed
by buying power.
Exchange
 The provision or transfer of goods, services, or
ideas in return for something of value
The Marketing Mix
Four marketing activities—product,
distribution, promotion, and pricing—that a
firm can control to meet the needs of
customers within its target market

Product
Distribution Target
Promotion Market
Pricing
4 P’s - Product, Price, Place, Promotion
 Product: Features, benefits, value offered
 Price: Base price, discount, bundling
 Place: Direct, retail, mail order, Internet
 Promotion: Advertisements, promotional
events

4 C’s - Customer solution, Cost, Convenience,

Communication
4 A’s – Acceptability, Affordability, Accessibility,
Awareness
Concepts in Marketing
 Production concept
holds that consumers will prefer products that are widely available
and inexpensive. Managers of production oriented businesses
concentrate on achieving high production efficiency, low costs and
mass distribution. They assume that consumers are primarily
interested in product availability and low prices.

 Product Concept
consumers favor those products that offer the most quality,
performance or innovative features. Managers in these organizations
focus on making superior products and improving them over time.
They assume that buyers admire well made products and can
evaluate quality and performance.
Selling Concept

The organizations undertake an aggressive selling and promotion effort.

The aim is to sell what they make rather than make what the market
wants.

Marketing Concept
Holds that the key to achieving its organizational goals consists of the
company being more effective than competitors in creating, delivering
and communicating superior customer value to its chosen target
markets. The marketing concept rests on four pillars: target market,
customer needs, integrating marketing and profitability.
Societal Marketing Concept
holds that a company should make good marketing decisions by
considering consumers' wants, the company's requirements, and
society's long-term interests. It is closely linked with the principles of
corporate social responsibility.

Relationship Marketing

Building long term mutually satisfying relations with customers,

suppliers, distributors in order to retain their long term preference and
business.
Four Ps and Modern Four Ps

 Product
 Price
 Place
 Promotion
 People
 Processes
 Programs
 Performance
 The Nestle Way
•• Nestlé
Nestlé sells
sells more
more than
than 8,500
8,500 products
products produced
produced in
in 489
489
factories
factories in
in 193
193 countries
countries

•• Nestlé
Nestlé is
is the
the world’s
world’s biggest
biggest marketer
marketer of
of infant
infant formula,
formula,
powdered
powdered milk,
milk, instant
instant coffee,
coffee, chocolate,
chocolate, soups,
soups, and
and mineral
mineral
water
water
 The “Nestlé way” is to dominate its markets
can be summarized in four points:
(1) think and plan long term
(2) decentralize
(3) stick to what you know, and
(4) adapt to local tastes
Traditional Vs Modern Organization
Holistic Marketing Dimensions
Building Customer Value,
Satisfaction Loyalty in Marketing
 Customer perceived value is the difference
between the prospective customer’s
evaluation of all the benefits and all the costs
of an offering and the perceived alternatives.
Steps in a Customer Value
Analysis
 Identify major attributes and benefits that
customers value
 Assess the qualitative importance of different
attributes and benefits
 Assess the company’s and competitor’s
performances on the different customer
values against rated importance
 Examine ratings of specific segments
 Monitor customer values over time
 Total customer satisfaction
 A person’s feelings of pleasure or disappointment that

result from comparing a product or service’s perceived

performance (or outcome) to expectations
 Monitoring satisfaction: many companies are systematically
measuring how well they treat customers, identifying the
factors shaping satisfaction, and changing operations and
marketing as a result
 Periodic surveys, customer loss rate, mystery

shoppers, J. D. Power’s satisfaction ratings

Quality: is the totality of features and characteristics of a

product or service that bear on its ability to satisfy
stated or implied needs
Maximizing Customer Lifetime Value

 Customer profitabillity analysis

 Activity-based costing (ABC)- ABC accounting
tries to identify the real costs associated with
serving each customer— the costs of products
and services based on the resources they
consume. The company estimates all revenue
coming from the customer, less all costs.
Customer-Product Profitability Analysis
Customer 1 is very profitable; he buys two profit-making products (P1 and P2). Customer 2 yields
mixed profitability; she buys one profitable product (P1) and one unprofitable product (P3).
Customer 3 is a losing customer because he buys one profitable product (P1) and two unprofitable
products (P3 and P4).
Retention dynamics/marketing funnel
The marketing funnel identifies the percentage of the potential target market at
each stage in the decision process, from merely aware to highly loyal.
Consumers must move through each stage before becoming loyal customers.
Some marketers extend the funnel to include loyal customers who are brand
advocates or even partners with the firm.
 Customer Relationship Management (CRM)

Using information about customers to create marketing strategies

that develop and sustain desirable customer relationships
 Identifying buying-behavior patterns of customers

 Using behavioral information to focus on the most profitable

customers
Attracting and Retaining Customers

 Managing the customer base

Reduce
customer
defection
Focus on Increase
high-profit customer
customers longevity

Terminate Share of wallet

low-profit &
customers cross/upselling
Loyalty- is a deeply held commitment to re-buy or re-
patronize a preferred product or service in the future
despite situational influences and marketing efforts having
the potential to cause switching behavior.
Building loyalty
Interact closely with customers

Develop loyalty programs

Create institutional ties

Value Creation Practices

 Brand communities
 Social networking
 Impression management
 Community engagement
 Brand use
Customer lifetime value (CLV)- The net present value of the
stream of future profits expected over the customer’s lifetime
purchases