CH:1 MARKETING:MANAGING

PROFITABLE
CUSTOMER RELATIONSHIPS
 WHAT IS MARKETING
Nature and scope :
• Selling and advertising are only a part of marketing.
• From old concept of making a sale through telling and selling
marketing is based on new concept of satisfying customer needs
• Old concept of marketing was the flow of goods and services from
producer to consumer but in new sense marketing activities get
started even when the production is not undertaken.
• Marketing is critical for the success of every organization.
• “Marketing is managing profitable customer relationships.”
MARKETING:
DEFINATION
• “Marketing is a social and managerial process by which individuals and groups obtain what
they need and want through creating and exchanging value(Benefits vs cost ) with
others.”
• “Marketing is a Process by which companies create value for customers and build strong
customer relationship to capture value from customers in return.”

Marketing mix: 7P’s

i)product ii) price iii) place iv)promotion
v)Physical evidence vi) Process vii)people
Set of marketing tools that work together to satisfy consumer needs.

7c’s:
i)Customer solution ii)Customer cost iii)Convenience iv)Communication v) comfort ,
Cont.
Cont. :
•v
Marketing Process:
• Understand the market place and customer needs and wants
Design a customer driven marketing strategyConstruct a marketing
program that delivers superior value Build profitable relationships
and create customer delightCapture value from customer to create
profits and customer quality

MODEL OF MARKETING PROCESS

 MODEL OF MARKETING
PROCESS
 1.UNDERSTANDING MARKET PLACE
AND CUSTOMER NEEDS , Wants,
demands
5 core customer and marketplace concepts
i. Needs, wants and demands
• NEEDS:
State of felt deprivation e.g. food ,water, clothing , warmth , belonging and affection,
knowledge etc.
• WANTS:
The form human needs take as shaped by culture and individual personality e.g. mc
Donald's burger, j. suit, soft drink etc.
• DEMANDS:
Human wants backed by buying power .
Example :
P&G, executives from the chief executive officer spend time with consumers in their homes and on shopping trips. P&G brand managers
routinely spend a week or two living on the budget of low-end consumers to gain insights into what they can do to improve customers’ lives.
 Ii . MARKETING OFFERS –PRODUCTS ,SERVICES AND
EXPERIENCES
• MARKETING OFFER:
Some combination of products , services , person , places ,organization ,
information , ideas ,Events , experiences ,properties
Products:? Organization: ? Information :?? Ideas :?
Services: ? Events :? Properties :??
Persons:? Experiences :?
Places :?
• Marketing myopia:
Theory that states companies focus on their needs and short term growth
strategies. They neglect the needs and wants of their customers and fail as a result
e.g Kodak,nokia
iii. Customer value and satisfaction:
• Consumers form expectations about value and satisfaction that
various marketing offers will deliver and buy accordingly.
• Customer value and customer satisfaction are key building blocks, for
developing and managing,customer relationships.
• Its about getting ,keeping and growing customers.
• Satisfied customers buy again & again and tell others about their
experiences and vice versa.
• Perceived value vs actual value
iv. EXCHANGE AND RELATIONSHIPS:

• The act of obtaining a desired object from someone by offering

something in return is exchange
• Marketing consists of actions taken to build and maintain a desirable
exchange relationships with target audiences involving
product,service ,idea or other object
• Sellers must search for buyers, identify their needs, design good
market offerings, set prices for them, promote them, and store and
deliver them in exchange for profitable relationship. Activities such as
consumer research, product development, communication ,
distribution, pricing, and service are core marketing activities.
v. MARKETS
• Market is the set of actual and potential buyers of a product or service .
• Its Place where buyer and seller meet each other to carry out
transaction
• Example :The market may be physical like a retail outlet, where people
meet face-to-face, or virtual like an online market, where there is no
direct physical contact between buyers and sellers , It can be
underground/black market ,auction market ,financial markets etc.
• Marketers manage the markets to bring about profitable customer
relationship by searching for buyers , identifying their needs, designing
good marketing offers ,set prices for them , promote them and store and
deliver them
Cont. :
• Figure shows the main elements in a marketing system. Marketing
involves serving a market of final consumers in the face of
competitors.
• The company and competitors research the market and interact with
consumers to understand their needs.
• Then they create and send their market offerings and messages to
consumers, either directly or through marketing intermediaries.
• Each party in the system is affected by major environmental forces
(demographic, economic, natural, technological, political, and
social/cultural).
 Cont. .
• So a company’s success at building profitable relationships depends not only on
its own actions but also on how well the entire system serves the needs of final
consumers.

• example
laptops , mobile phones and all the products cannot fulfil its promise of low prices
unless its suppliers provide raw material at low costs.

• example
• And Suzuki motors cannot deliver a high quality car-ownership experience unless
its dealers provide outstanding sales and service.
 2.Designing a customer driven marketing
strategy
• Marketing management:
Art and science 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
customer value.
i)What customers we will serve ?(Target market)
ii)How can we serve those customers best?(value propositions)
i)Selecting customers to serve :
• Market segmentation:
Dividing the market into segments of customers.
• Target market:
After segmentation which segment the company will go.
ii)Choosing a value propositions
• It is the set of values/benefits that the company promises to deliver
to consumers to satisfy consumers needs.
• value propositions differentiate one brand from another.
• Example :?
• They answer the customer’s question, “Why should I buy your brand
rather than a competitor’s?”
• Companies must design strong value propositions that give them the
greatest advantage in their target markets.
Marketing management orientations
• There are 5 concepts under which organizations design and carry out
their marketing strategies.
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal marketing concept
1. The Production concept:
Definition
Consumers will buy those products which are available and highly
affordable .
• High production
• Low cost
• Mass distribution
Drawbacks
• Interest of the customer is ignored
• Process comes to end when the product reaches to customer.
2.The Product concept
Definition:
Consumers will favor products that offer the most in quality,
performance and innovative features.
• e.g nokia,Huawei,oppo,infinix etc.
Drawback
• Product will not sell without attractive price, convenient distribution
channels and bringing it to attention of people who need
3. The Selling Concept
Definition:
Consumer will not buy enough of the firm’s product until it undertakes a
large scale selling and promotion efforts.
• Practiced normally for unsought goods (that buyers do not normally
think of buying)
• Example: insurance companies , fire extinguishers
Drawbacks
• Focus is to create sales rather then on building long term relationship
with customers
• Satisfaction of the customer’s need is ignored
4. The Marketing concept
• Definition:
• Achieving organizational goal depends upon knowing the needs and
wants of target markets and delivering the desired satisfactions better
then competitors do.
• Instead of make and sell philosophy there is sense and respond
philosophy
The selling and marketing concept contrasted
5.Societal marketing concept
• Societal marketing concept holds that marketing strategy
should deliver value to customers in away that maintains or
improves both the consumer’s and the society’s well being.
• emphasis of this concept is to make the company fulfill social
responsibilities for a sustainable future in the long term.
• It calls for sustainable marketing, socially and environmentally
responsible marketing that meets the present needs of
consumers and businesses while also preserving or enhancing
the ability of future generations to meet their needs.
• Body shop using organic plant based ingredients
Cont.
• Adidas – Another excellent example of societal marketing is the
Adidas action from 2018.
• More than five million pairs of shoes made from recycled plastic by
Adidas were produced in 2018.
• Adidas collaborated with a business that collects beachside plastic
waste to achieve this.
• Adidas employed this marketing strategy to produce things profitably
while simultaneously preserving the ocean’s animals and cleaning its
beaches.
Cont.
Cont.
Cont,

Three considerations underlying the societal marketing concept

Cont.
3.PREPARING A MARKETING PLAN
AND PROGRAM
• The marketing program builds customer’s relationship by
transforming the marketing strategy into action.
• Marketing strategy is overall game plan
• Marketing mix: tools the firms use to implement marketing strategy.
• Product: need satisfying marketing offer
• Price :how much it will charge for the product
• Place: availability to target consumer
• Promotion :communication with the target customers about the
product and persuade them of its merits
 4.BUILDING CUSTOMER
RELATIONSHIPS
• Customer relationship management CRM:
The overall process of building and maintaining
profitable customer relationship by delivering superior customer value and satisfaction.

i)Customer perceived value

Customers evaluation of the difference between all the benefits and
all the costs of a marketing offer relative to those of competing offers.
e.g. TCS courier service

ii)Customer satisfaction
Depends on products perceived performance relative to buyers expectations
Customer relationship levels and tools
Companies can build customer relationships at many levels depending
upon the nature of target market.
• Basic relationship:
Company with many low margin customers seeks to develop basic
relation ship with them
• E.g P&G in case of Ariel washing powder.
• Full partnership:
In markets with few customers and high margins sellers want to create
full partnership with key customers e.g. Ferrari partnership with shell
Customer relationship tools
• Marketers can use specific marketing tools to develop strong bonds
with customers
• Example :
Many companies now offer frequency marketing programs that
reward customers who buy frequently or in large amounts like
ufone,airlines offer frequent flier programs and hotels give room
upgrades to their frequent guests, Uber ,Careem etc
The changing nature of customer relationship
Relating with more carefully selected customers
• Selective relationship management
Companies use customer profitability analysis to
eliminate losing customers and target winning ones
Relating for Long Term
Marketing is the process of finding, retaining, growing and building
profitable ,long term relationship with customers.
Relating directly
Companies are connecting with customers more directly.
Partner relationship management
• Combination of software, business processes and strategies that
companies use to manage business processes with partners who sell
their products
• Partner inside company :
Rather then letting each department go its own way ,firms are linking
all departments in the cause of creating customer value.
• Partner outside company:
Distributers,retailers,suppliers,competitors
5. CAPTURING VALUE FROM
CUSTOMERS
• Outcomes of capturing value from customers value are:
i)Creating customers loyalty and retention
ii)Share of customer
iii)customer’s equity
THE NEW MARKETING LANDSCAPE
• Major forces that are changing the marketing and challenging
marketing strategy are
1. The new digital age
2. Rapid globalization
3. The call for more ethics and social responsibility
4. The growth of not-for-profit marketing
• Internet
allows anytime, anywhere connections to information,
entertainment and communication.
1. The new digital age
• The recent technology boom has had a major impact on the ways
marketers connect with and bring value to their customers.
• Exciting new ways to learn about and track customer.
• Communication with customer is easy
• Distribution is efficient and effective now
• Marketer can make their own customer database and use them to
target customers and to provide products as per their needs.
• Video conferencing
• Advertising
2.Rapid Globalization
• Marketers are now connected globally with their customers and
marketing partners to build their relationships.
3)The call for more ethics and social
responsibility
• Social responsibility and environmental movements will place stricter
demands on companies in the future .

4)The growth of not for profit marketing

e.g hospitals,blood donors co.
s
Class activity