OVERVIEW OF MARKETING

LEARNING OBJECTIVES
1.1 Core marketplace concepts
• Marketing and the marketing process
• Needs, wants and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
1.2 Marketing management orientations
1.3 Customer relationship management
1.4 Major marketing trends and forces

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 MARKETING
• Definitions

“The management process which identifies,

anticipates, and supplies customer requirements
efficiently and profitably”.
--- UK’s Chartered Institute of Marketing ---

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 MARKETING
• Definitions
“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”.
--- American Marketing Association, 1985 ---

“Marketing is an organizational function and a set of

processes for creating, communicating and delivering value to
customers and for managing customer relationships in ways
that benefit the organization and its stakeholders”.
--- American Marketing Association, 2004 ---

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 MARKETING
• Definitions
“Broadly defined, marketing is a
social and managerial process by
which individuals and organizations
obtain what they need and want
through creating and exchanging “In a business context, marketing is a
value with others.” the process by which companies engage
--- Philip Kotler, 2012 --- customers, build strong customer
relationships, and create customer value
in order to capture value from customers
in return.”
--- Philip Kotler, 2012 ---
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 MARKETING
• Key points

 Marketing is a process.
 Marketing is customer
value-driven.

 Marketing satisfies customer needs efficiently and profitably (exchange).

 Marketing still takes place (customer relationship)

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 MARKETING
• The marketing process (Kotler, 2012)

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1.1 CORE MARKETPLACE CONCEPTS

Customer Needs, Wants and

Demands

Markets Market offerings

MARKETING

Exchanges and relationships Value and satisfaction

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 NEEDS, WANTS, DEMANDS
• States of deprivation
• Physical—food, clothing, warmth, safety
Needs • Social—belonging and affection
• Individual—knowledge and self-expression

• Form that needs take as they are shaped by

Wants culture and individual personality

Demands • Wants backed by buying power

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 MARKET OFFERINGS
• Market offerings
– Some combination of products, services,
information, or experiences offered to a
market to satisfy a need or want.
– Including:
Physical
People Organizations
products
Ideas
Services Places Information

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MARKET OFFERINGS

• Marketing myopia
– The mistake of paying more attention
to the specific products a company
offers than to the benefits and
experiences produced by these
products.

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 CUSTOMER VALUE & SATISFACTION

• Customer – perceived value

– The customer’s evaluation of
the difference between all the
benefits and all the costs of a
marketing offer relative to
those of competing offers.

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 CUSTOMER VALUE & SATISFACTION

• Customer satisfaction
– The extent to which a product’s
perceived performance matches
a buyer’s expectations.

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 EXCHANGES & RELATIONSHIPS

• Exchange
– The act of obtaining a
desired object from
someone by offering
something in return.

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 MARKETS
• Market
– The set of all actual and potential buyers
of a product or service.

– These buyers share a particular need or want

that can be satisfied through exchange
relationships.

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 MARKETING MANAGEMENT
– Marketing management is the analysis, planning,
implementation and control of programmes designed to bring
about desired exchanges with target markets for the purpose
of achieving organizational objectives.
– The aim is to engage, keep, and grow target customers by
creating, delivering, and communicating superior customer
value.

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MARKETING MANAGEMENT ORIENTATIONS

Production Product Selling Marketing Societal

concept concept concept concept concept

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MARKETING MANAGEMENT ORIENTATIONS
PRODUCTION Success depends on low production costs, highly efficient
concept processes, and mass distribution.

Success depends on creating the best, most innovative product

PRODUCT concept
for the lowest price.

Success depends on a good sales team with the right tools and
SELLING concept
incentives.

MARKETING Success depends on doing better than competitors at understanding,

concept creating, delivering, and communicating value to their target customers.

SOCIETAL Marketing decisions should consider consumers’ wants, the

MARKETING company’s requirements (profits), and society’s long-run
concept interests (human welfare).
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MARKETING MANAGEMENT ORIENTATIONS

Starting point Focus Means Ends

The selling Existing Selling and Profits through

Factory
concept products promoting sales volumes
Inside-out perspective

The Profits through

Customer Integrated
marketing Market customer
needs marketing
concept satisfaction
Outside-in perspective

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MARKETING MANAGEMENT ORIENTATIONS
SOCIETY
(Human welfare)

Societal
marketing
concept

CONSUMERS COMPANY
(Want satisfaction) (Profits)

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 MARKETING
• The marketing process (Kotler, 2012)

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 MARKETING STRATEGY

Which customers to How to best serve those

Customer value
serve? customers?
– driven
(Who is the target (What value(s) offered to
marketing
market?) those customers?)

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 MARKETING
• The marketing process (Kotler, 2012)

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 MARKETING MIX

4Ps of Marketing (McCarthy, 1960) 4Cs of Marketing (Lauterborn, 1990)

P1 Product C1 Customer solution

P2 Price C2 Customer cost

P3 Place C3 Convenience

P4 Promotion C4 Communication

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 MARKETING MIX
• Marketing mix
– The set of marketing tools the firm uses to implement its
marketing strategy.
.
Quality | Design | Advertising |
Feature | Brand| Personal selling |
Packaging | Label | PRODUCT PROMOTION Sales promotion| PR
Services | Direct marketing

Pricing strategies| New

product pricing strategies |
4Ps Marketing channels |
Channel design decisions
Product mix pricing
strategies| Price
PRICE PLACE | Channel management
decisions| Marketing
adjustment strategies logistics & SCM

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 MARKETING
• The marketing process (Kotler, 2012)

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 CUSTOMER RELATIONSHIP MANAGEMENT
– In the broadest sense, customer
relationship management (CRM) is the
overall process of building and maintaining
profitable customer relationships by
delivering superior customer value and
satisfaction.
– On average, it costs 5-10 times as much to
attract a new customer as it does to keep a
current customer satisfied.
– Key to CRM = Customer Value + Satisfaction
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 CUSTOMER RELATIONSHIP MANAGEMENT

• Customer relationship levels

Basic Reactive Accountable Proactive Partnership

A salesperson A salesperson The seller contacts The seller The company

sells products and sells the product the customer regularly contacts works
there’s no and encourage shortly after the to discuss the use continuously with
communication or customers to sale to inquire of the product, the customer to
customer supply feedback. whether the also asks for ensure that the
feedback product meets feedback if the customer gets
involved. expectations. product or service even more out of
can be improved. the product.
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CUSTOMER RELATIONSHIP MANAGEMENT

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 CUSTOMER RELATIONSHIP MANAGEMENT

• Customer relationship tools

Financial
benefits Better price; Special discount; Rewards program
Social Personalization; Special gifts or greeting cards on special
benefits occasions; Customers’ preferences

Structural ties Customer service; Speed of service

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 CUSTOMER RELATIONSHIP MANAGEMENT

• Trends
– Customer-engagement marketing

– Consumer-generated marketing

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 PARTNER RELATIONSHIP MANAGEMENT

• Partner Relationship Management – PRM

– Working closely with partners in other company
departments and outside the company to jointly bring
greater value to customers.
– Internal: Functional departments
– External: Suppliers, Intermediaries, Competitors

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 CUSTOMER LOYALTY
• Customer loyalty
– A deeply held commitment to rebuy or re-patronize a preferred
product or service consistently in the future, thereby causing
repetitive same-brand or same brand-set purchasing, despite
situational influences and marketing efforts that have the
potential to cause switching behavior. (Oliver, 1999)
• Conceptualization of loyalty
– Behavioral loyalty
– Attitudinal loyalty

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 CURRENT MARKETING TRENDS
#
Marketing to the bottom of the pyramid
1
#
Global marketing
2
#
Digital and social media marketing
3
# Sustainable marketing
4 Social responsibility in marketing
#
Not-for-profit marketing
5
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 MARKETING PROCESS
Capture value from
Create value for customers and build customer relationships customers in return
Capture value from
Understand the Design a customer Construct an Engage customers, customers to create
marketplace and
customer needs and
value-driven integrated marketing build profitable profits and customer
wants marketing strategy program relationships equity

Research customers Select customers to Product Customer Create satisfied,

and the marketplace serve: market relationship loyal customers
[Chapter 5]
segmentation and management
[Chapter 1, 3]
targeting Price
Manage marketing Partnership Capture customer
information and [Chapter 4] [Chapter 6]
relationship lifetime value
customer data Decide on a value management
Place
[Chapter 2] proposition:
[Chapter 7] Increase share of
differential and
positioning market and share
Promotion of customer
[Chapter 4]
[Chapter 8]

Harness marketing Manage global Ensure environmental

technology markets and social
(e-Marketing) (Global marketing) responsibility
(Social marketing)
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