Lecture 2

BBA 2301
PRINCIPLES OF MARKETIING
In today's session:

Understanding marketplace and customers needs.

Marketplace:
• Marketers need to understand customers needs, wants and the
market place which they operate.
Five core marketplace concepts are:
• Customers needs, wants and demands
• Market offerings( product, services and experiences)
• Consumer value and satisfaction
• Exchanges and relationships
• Markets.
Before we more to the process we need to understand
difference between customers and consumers:

• A customer always purchases a product or service, but might not be

the end user.
• A consumer is always the end user of a product or service, but might
not have purchased it.
• A customer becomes a consumer if they make a purchase and use
the product or service themselves.
1.Customers needs, wants and demands:
Needs:
Human needs are the most basic concept underlying marketing. A
human need is a state of felt deprivation.
1). Humans have many complex needs.
a). Basic, physical needs for food, clothing, warmth, and safety.
b). Social needs for belonging and affection.
c). Individual needs for knowledge and self expression.
2). These needs are part of the basic human makeup
• Wants :
A human want is the form that a human need takes as shaped by
culture and individual personality.
Demands:
human wants that are backed by buying power.
1). Consumers view products as bundles of benefits and choose
products that give them the best bundle for their money.
2). People demand products with the benefits that add up to the most
satisfaction.
Example:
• Mr. A needs a mobile to stay connected to the world. Mobile phone is
what a person Needs.
• Now he want to buy an apple iPhone, this is what he “wants”.
• He will check out if his pocket allows him to buy it ?if this is so the
iPhone becomes demand now. If this is not so…he will demand for a
cheaper phone with lower prices.
2. Market offerings:
• some combination of products, services, information, or experiences
offered to a market to satisfy a need or want.
• A product is anything that can be offered to a market to satisfy a need
or want.
• A service is an activity or benefit offered for sale that is essentially
intangible and does not result in the ownership of anything.
( examples: banking, airline, hotel , retailing & home repair services
etc)
• Experiences : The concept of product is not limited to physical objects
and can include experiences, persons, places, organizations,
information, and ideas.
• Be careful of paying attention to the product and not the benefit
being satisfied.
• “Marketing myopia” is caused by shortsightedness or losing sight of
underlying customer needs by only focusing on existing wants. Or we
can define it as:
• The mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by
these products.
3. Customer value and satisfaction:
• Customer value is the difference between the values that the
customer gains from owning and using a product and the costs of
obtaining the product. Customers do not often judge product values
and costs accurately or objectively--they act on perceived value.
•
• Customer satisfaction depends on a product’s perceived performance
in Delivering value relative to a buyer’s expectations.
• If performance exceeds expectations, the buyer is delighted (certainly
a worthy goal of the marketing company).
1). Smart companies aim to delight customers by promising only what
they can deliver, then delivering more than they promise.
2). The aim of successful companies today is total customer
satisfaction.
3). Customer delight creates an emotional affinity for a product or
service, not just a rational preference, and this creates high customer
loyalty.
4). Quality has a direct impact on product or service performance.
Quality is defined in terms of customer satisfaction.
4. Exchange and relationships:
• The act of obtaining a desired object from someone by offering something
in return.
• In the broadest sense, the marketer tries to bring about a response to
some market offering. The response may be more than simply buying or
trading products and services. A political candidate, for instance, wants
votes; a church wants membership; an orchestra wants an audience; and a
social action group wants idea acceptance.
• Marketing consists of actions taken to create, maintain, and grow
desirable exchange relationships with target audiences involving a
product, service, idea, or other object. Companies want to build strong
relationships by consistently delivering superior customer value.
5. The market:
• The concepts of exchange and relationships lead to the concept of a
market.
• A market is the set of actual and potential buyers of a product or
service.
• These buyers share a particular need or want that can be satisfied
through exchange relationships.
5. The market:
1). Originally a market was a place where buyers and sellers gathered to
exchange goods (such as a village square).
2). Economists use the term to designate a collection of buyers and sellers
who transact in a particular product class (as in the housing market).
3). Marketers see buyers as constituting a market and sellers constituting
an industry.
4). Modern economies operate on the principle of division of labor, where
each person specializes in producing something, receives payment, and
buys needed things with this money. Thus, modern economies abound in
markets. 5). Marketers are keenly interested in markets.
Thank You!