Principles of Marketing

“Marketing is managing profitable

customer relationship”

The twofold goal of marketing is:

• Attract new customers by promising superior value

• Keep and grow current customers by delivering satisfaction

 Sound Marketing is critical to the success of every
organization
For-Profit Firm
ACI Not-for-Profit Firm
SQUARE
BATA
College
AARONG
AGORA Hospital
Banglalink Museums
Religious Organizations
Marketing Defined

Selling and Advertising

Only the tip of the marketing iceberg.

Old sense Making a sale-
”telling and selling”

New sense Satisfying customer

needs
Broadly defined
“Marketing is a social and managerial process by
which individuals and organizations obtain what
they need and want through creating and
exchanging value with others.”

Narrower business context

“ Marketing involves building profitable, value-
laden exchange relationships with customers”
Marketing

“Marketing as the process by which companies

create value for customers and building strong
customer relationship in order to capture value
from customer in return”
The Marketing Process
 Create value for customers and building
strong customer relationships
Understanding Design a Construct an
Build profitable
the market customer- integrated
relationships
place and driven marketing
and create
customer program that
marketing customer
needs and delivers
strategy delight
superior value
wants

Capture value
from customers
Capture value from customer in return to create profits
and customer
equity

A simple Model of the Marketing Process

Understanding the market place and customer needs and wants

• Customer Needs, Wants, and Demands

• Marketing Offerings- Products, Services, and
Experiences
• Customer Value and Satisfaction
• Exchanges and Relationships
• Markets
 Customer Needs, Wants, and Demands

Needs: Human needs are state of felt deprivation

Maslow’s Hierarchy of Need

Want Are the form human needs take as they
are shaped by culture and personality

American
Bangladeshi
Food
Food

Demand When backed by buying power wants

become demand.
Market Offerings – Products, Services, and Experiences
Some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.

Services Place

Persons Organizations
Information
Ideas
Marketing The mistake of paying more attention to the
Myopia specific products a company offers than to the
benefits and experiences produced by these
products

Drill machine A qurter-inch hole

Smart marketers look beyond the attributes of the product and

services they sell.

Hewtett-Packard
Personal Computer A collection Back-up Brain/
of wires and our life/
electrical Autobiography
components
 Customer Value and Satisfaction

Expectations Marketers must be careful to set

the right level of expectations.

Too low May satisfy those who buy but fail to

attract enough buyers

Too high Buyer will be disappointed

 Exchange and Relationships

Exchange The act of obtaining a desired object from

someone by offering something in return

Marketing consists of actions taken to build and maintain

desirable exchange relationships with target audience.

Marketers want to build strong relationships by

consistently delivering superior customer value
 Market A set of all actual and potential buyers of
a product or service.

company Marketing
Suppliers Consumers
competitors Intermediaries

Major environmental forces

A Modern Marketing System

 Design a customer-driven marketing strategy

Marketing Management : as the science and arts of choosing

target markets and building profitable relationships with them.

The marketing manager’s aim is to find, attract, keep, and grow target
customers by creating, delivering, and communicating superior value.

Two important question:

1.What customers will we serve?
2.What’s our value proposition?
 Selecting customers to serve

Market segmentation : Dividing the market into segments of customers.

Target marketing : Selecting which segments it will go after

Choose a value proposition

A company’s value proposition is the set of benefits or values

it promises to deliver to customers to satisfy their needs.

BMW promises “ the ultimate driving machine”

GrameenPhone – “ Stay connected”
Why should I buy your brand rather than a competitor’s ?
 Marketing Management Orientations/
Marketing philosophy/ Marketing Concepts

1. The production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept
The production Concept
The production Concept holds that consumers will favor products that
are available and highly affordable.

Management Focus i) Production Efficiency

ii) Distribution
Efficiency
Useful philosophy in some situation:
1. When, Demand> Supply (Such as- WASA, DESA)
2. Product’s cost is too high

Although useful in some situation the Production Concept can

lead to making myopia
The product Concept
The idea that consumers will favor products that offer the most
quality, performance, and features and that the organizations should
therefore devote its energy to making continuous product
improvements
Management focus: making on continuous product improvements.

Marketing
myopia

Kodak – Photographic Film rather than a way

to capture and share memories.
The Selling Concept
The idea that consumers will not buy enough of the firm’s product
unless it undertake a large-scale selling and promotion effort.

Management focus: creating sales transaction

Marketing
myopia
 The Marketing Concept
The marketing management philosophy that holds that achieving
organizational goals depends on knowing the needs and want of target
markets and delivering the desires satisfactions better than competitors
do.
Starting
Point Focus Means Ends

The Selling Existing Selling and Profit through

Factory
Concept product promoting sales volume

The Marketing Market Customer Integrated Profit through

Need Marketing customer
Concept
satisfaction
The societal Marketing Concept
The idea that a company’s marketing decisions should consider
consumer’s requirements, consumer’s long-run interest

The considerations underlying the Societal Marketing Concept

Society
(Human welfare)

Societal
Marketing
Concept

Consumers Company
(Want satisfaction) (Profit)
Preparing an Integrated Marketing Plan and Program
Actually deliver the intended value to target customers

Marketing Mix

Four Ps

To deliver its value proposition, the firm must first

Product create a need-satisfying market offerings

Price It must decide how much it will charge for the offering.

Place How it will make the offering available to target

consumers.

Promotion It must communicate with target customers about

the offering and persuade them of its merits
 Building Customer Relationship
Customer Relationship Management
The overall process building and maintaining profitable customer
relationships by delivering superior customer value and satisfaction
Relationship Building Block: Customer value and satisfaction
Customer The customer’s evaluation of the difference between all the
value benefits and all the costs of a marketing offer relative to those
of competing offers.
Customer The extent to which a product’s perceived performance
Satisfaction matches a buyer’s expectations.

Customer Relation Level and Tools

Many Low-Margin Customers Basic Relationships

Few Customers and high margin Create full partnership

The Changing Nature of Customer Relationships

Relating with More Carefully Selected Customers

Relating with Deeply and Interactively
Consumer-generated Marketing

Partner Relationship Management

Partner Inside the Company

Marketing Partner Outside the firm
 Capturing Value from Customers
By creating superior customer value, the firm creates highly
satisfied customers who stay loyal and buy more. This, in return
means greater long-run returns for the firm.

Creating Customer Loyalty and Retention

Good customer relationship customer delight

Losing a customer losing a single sale

It means losing the entire stream of purchases that the

customer would make over a lifetime of patronage.
 Customer lifetime value

The value of the entire stream of purchases that the

customer would make over a lifetime of patronage.

A customer spends about Tk.100 a week, shops 50 weeks a

year, and remains in the area for about 10 years

Tk100.00 x 50 x 10 = Tk.50,000
 Growing Share of Customer
Share of Customer

The portion of the customer’s purchasing that a

company gets in its product categories

Bank Share of wallet

Restaurants Share of stomach

Car Share of garage

Airlines Share of travel
 Building Customer Equity
Customer Equity :The total combined customer lifetime values
of all of the company’s customers

Building the Right Relationships with the Right Customers

Butterflies True Friends :

Good fit between Good fit between
High
company’s offerings and company’s offerings and
Profitability
customer’s needs ;high customer’s needs ;highest
profit potentials profit potentials
Strangers Barnacles
Little fit between Limited fit between
Low company’s offerings and company’s offerings and
Profitability customer’s needs ; customer’s needs ;low
lowest profit potentials profit potentials

Short-term Long-term
The Changing Marketing Landscape
The Digital Age Computer, Communication, Information and
Other digital technologies
The digital age has provided marketers with exciting new ways
to learn about and track customers and to create products and
services tailored to individual customer needs

Digital technology has also brought a new wave of

communication, advertising , and relationship building tools –
ranging from online advertising, video, sharing tools, cell
phones and video games to widgets and online social network

Internet : A vast public web of computer networks that connects

users of all types all around the world to each other and to an
amazingly large information repository.
Rapid Globalization Global + Local = Glocal

The Call for More Ethics and Social Responsibility

1. Consumerism
2. Environmentalism

The Growth of Not-for-Profit Marketing

Discussion?