Principles of

Marketing
BBA II
BBA (BA) 322

MUHAMMAD SALMAN
 ABOUT THE TEACHER
• Learner for life!
• Author: Sales Sapien (2023)
• Researcher at the University of Karachi : Marketing
• MBA: KUBS – Class of 2007
• 15+ years of rigorous, diversified Sales & Marketing experience
• Core working areas: FMCG & Corporate Sales, Out of Home,
Marketing, Business Strategy & Consultancy
• Worked in top-notch organizations including DHL, Metro Cash & Carry,
British American Tobacco, Nestle, and Searle.
• Currently working in TCS
 ABOUT THE COURSE
• Marketing is treated as a core conceptual subject in Business Studies
• It develops a unique perspective of looking at the environment around
you
• Develops comprehension about what is happening in the marketplace
around you and how to decipher and decode the messages
• Understanding how marketers think, plan and execute their strategies
while, before and after the product reaches you

- IT’S EXCITING -
HOW WILL WE LEARN TO SAIL THROUGH
 BREAKUP OF MARKS

Marks will come in 10 10 10

anyways! Group Presentation of Presentation of a Quizzes
Chapter mutually agreed
What counts is your marketing case
learning effort.
(Group Task) (Individual Task) (Individual)

20
PROJECT
Developing a complete
marketing campaign
50
Final Exam
(Group Task)
Chapter 1:
Marketing
Creating Customer Value and
Engagement
 WHAT IS MARKETING?

SAY WHAT
YOU THINK
IT IS!
 WHAT IS MARKETING?

“
The aim of marketing is to make selling unnecessary. ”
- Peter Drucker
WHAT IS MARKETING?
 WHAT IS MARKETING?

The process by which companies

engage customers,
build strong customer relationships,
and
create customer value
in order to
capture value from customers
in return.
 THE MARKETING PROCESS
Create value for customers and Capture value from
build customer relationships
customers
in return

Engage customers, build

Understand the Construct an integrated Capture value from
Design a customer value- profitable relationships,
marketplace and customer marketing program that customers to create profits
driven marketing strategy and create customer
needs and wants delivers superior value and customer equity
delight

Marketplace Customer Value Develop a plan to Engage Customer Exchange Value

Customer Needs Driven Strategy deliver differentiating through various tactics
& Wants value
QUIZ: 1
Concept Building Exercise:
Understanding Marketing at Work

• Restaurant/Food Outlet
• Bike/Car/Vehicle
• Rice
• Shoe/Footwear
• Apparel/Fashion Brand
• Bank/Insurance Company
• Washing Powder
• Toothpaste
WHY DID WE CHOOSE THESE OPTIONS?

Because we believe that the Or in other words they fulfil a

products or brands we choose, NEED or a WANT!
- Fit to our requirement
- Are consistently available What’s that?
- Are affordable
CUSTOMER NEEDS, WANTS & DEMANDS
Needs
Basic, essential human requirements.
They are necessary for survival and well-
being.
Cannot be eliminated.

Wants
The form human needs take as they are
shaped by culture and individual
personality. Desires that go beyond basic
needs. Not essential for survival.

Demands
Human wants that are backed by
buying power.
The ability and willingness to pay for a
want.
CUSTOMER NEEDS, WANTS & DEMANDS
 WHAT IS A MARKET OFFERING?
Some combination (s) of products, services, information, or
experiences offered to a market to satisfy a need or want.
Product Service Information Experiences
Physical Goods: Tangible products Professional Services: Services Educational Content: Information Travel: Vacation packages,
that customers can touch and provided by experts or professionals products like textbooks, online adventure tours, and travel events
possess, such as smartphones, in fields like law, medicine, courses, and educational software. that provide unique and memorable
clothing, cars, and appliances. accounting, and consulting. experiences.
News and Media: Information
Consumer Packaged Goods Hospitality Services: Services provided through newspapers, Entertainment: Tickets to concerts,
(CPG): Everyday items typically related to travel and magazines, TV channels, websites, movies, theme parks, and live
found in grocery stores, like cereals, accommodations, including hotels, and streaming platforms. performances.
beverages, toiletries, and cleaning airlines, restaurants, and tour
products. operators. Market Research Reports: Industry- Culinary: Fine dining at upscale
specific data and analysis provided to restaurants, cooking classes, and
Durable Goods: Products that have Financial Services: Services offered businesses to support decision- food festivals.
a longer lifespan and are meant to be by banks, insurance companies, making.
used over an extended period, such investment firms, and credit card Event: Attending sporting events,
as furniture, electronics, and providers. Data Subscriptions: Access to data conferences, festivals, and cultural
automobiles. and insights, such as stock market exhibitions.
Healthcare Services: Medical and data, weather forecasts, and
Industrial Products: Goods used by healthcare services provided by demographic information.
businesses for manufacturing or in hospitals, clinics, doctors, and
their operations, such as machinery, healthcare practitioners.
raw materials, and equipment.
 THE MODERN MARKETING SYSTEM
Major forces in the marketing environment

Company
Suppliers Marketing Final
Intermediaries consumers
Competitors

The flow of product, service, information

and relationships

We do this through
Marketing Management!
 MARKETING MANAGEMENT
The art and science
of
choosing target markets
and building profitable
relationships with them.
Who to sell? What to sell?
(SEGMENTATION & (VALUE PROPOSITION)
TARGETING) A brand’s value proposition is the set of
Dividing the market into segments of customers benefits or values it promises to deliver to
(market segmentation), and, consumers to satisfy their needs.
selecting which segments it will go after (target
marketing).
 ORIENTATIONS OF MARKETING
MANAGEMENT
Production Product Selling Marketing
Concept Concept Concept Concept
The idea that consumers The idea that consumers The idea that consumers A philosophy in which
will favor products that will favor products that will not buy enough of achieving organizational
are available and offer the most quality, the firm’s products goals depends on
highly affordable; performance, and unless the firm knowing the needs and
therefore, the features; therefore, the undertakes a large- wants of target
organization should organization should scale selling and markets and delivering
focus on improving devote its energy to promotion effort. the desired
production and making continuous satisfactions better than
distribution efficiency. product improvements. competitors do.

e.g. staple products, e.g. ride hailing apps, e.g. donations, credit e.g. fmcg products,
appliances, fruits, food ordering apps, cards, insurance, votes service marketing
vegetables unbranded garments,
replicas
 ENGAGING CUSTOMERS AND MANAGING
CUSTOMER RELATIONSHIPS
Create value for customers and Capture value from
build customer relationships
customers
in return

Engage customers, build

Understand the Construct an integrated Capture value from
Design a customer value- profitable relationships,
marketplace and customer marketing program that customers to create profits
driven marketing strategy and create customer
needs and wants delivers superior value and customer equity
delight

The first three steps in the marketing process—understanding the marketplace

and customer needs, designing a customer value–driven marketing strategy,
and constructing a marketing program
—all lead up to the fourth and most important step: engaging customers and
managing profitable customer relationships.
MARKETING
IS NOW
GETTING
SERIOUS!

TAKE A
BREAK
 CUSTOMER RELATIONSHIP
MANAGEMENT (CRM)
CRM involves building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.

EasyPaisa: uses CRM to send automated reminders to customers about their due
dates.

HBL: uses CRM to track customer interactions and identify potential customers for new
products.

Bykea: uses CRM to send automated reminders to drivers about their availability.
 CUSTOMER PERCEIVED VALUE (CPV)
Customer-perceived value is 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.

Coca-Cola offers various packaging sizes, including smaller bottles and affordable
pricing in Pakistan, ensuring that customers perceive it as a valuable and accessible
beverage choice. (Coke for Everyone)

Daraz.pk offers special discounts during its "Big Friday" sales, attracting customers
by providing the perceived value of significant savings on a wide range of products.

Shaukat Khanum Memorial Cancer Hospital & Research Centre: As a nonprofit

healthcare institution, SKMCH provides high-quality healthcare services at affordable
prices, emphasizing the perceived value of accessible healthcare for all.
 CUSTOMER SATISFACTION
Customer satisfaction refers to the extent to which a product's
perceived performance matches a buyer's expectations.
Careem uses customer satisfaction surveys to collect feedback from its riders

Domino’s Pizza uses customer satisfaction as a marketing tool by offering a 30-

minute guarantee on all of their deliveries.

KFC ensures customer satisfaction by maintaining consistent food quality, clean

dining areas, and efficient service, meeting customer expectations for a delightful
dining experience.
 CUSTOMER-ENGAGEMENT MARKETING
Customer-engagement marketing involves making the brand a
meaningful part of consumers' conversations and lives by fostering
direct and continuous customer involvement in shaping brand
conversations, experiences, and community.
Coke Studio engages with Pakistani customers through social media campaigns,
events, and partnerships, encouraging them to participate in creative challenges
and share their experiences.

Nestle Pakistan, organizes the Nestle Cooking Challenge every year. The
competition is open to all amateur and professional cooks, and the winner gets a
cash prize and a chance to work with Nestle Pakistan.

Sunsilk-PFDC Fashion Week features the latest collections of Pakistani

designers and engages customers by organizing, fashion shows, and
cultural festivals, making the brand an integral part of Pakistani lifestyles.
 CONSUMER-GENERATED MARKETING
Consumer-generated marketing refers to brand exchanges created by
consumers themselves—both invited and uninvited, paid or
unpaid—where consumers play an increasing role in shaping their own
brand experiences and those of other consumers.
PepsiCo Pakistan runs PepsiCo Voices, a platform which allows consumers to
share their stories and experiences with the company's products. The platform has
been used to collect feedback from consumers, and build brand awareness.

Tapal Tea launched a campaign called "#AikCupAchayWaqtKa" encouraging

consumers to share their heartwarming tea moments on social media. People shared
stories of bonding with family and friends over a cup of Tapal tea, creating a sense of
nostalgia and connection with the brand.

Engro Fertilizers consumer engagement platform in Pakistan is called

Humsafar. It is an app that allows farmers to access information about
Engro fertilizers, purchase fertilizers, and track their orders
 CUSTOMER LIFETIME VALUE (CLV)
Customer Lifetime Value (CLV) is a metric that represents the total
value a customer is expected to bring to a business over the entire
duration of their relationship with that business.

How to calculate CLV:

CLV = Average Purchase Value × Purchase Frequency ×
Customer Lifespan
Calculate CLV for a customer that makes a purchase of $100 every
month. Based on her past behavior and the data from similar
customers, you estimate that Sarah is likely to continue shopping with
your store for another three years.
 CUSTOMER EQUITY
Customer Equity is a strategic concept in marketing that focuses on
the total combined value that a company's customer base
represents over the long term. Implementing Customer Equity
effectively involves various strategies and practices to enhance the
overall value derived from existing and potential customers

How to calculate CE:

CE = CLV1 + CLV2 + CLV3 ….
A very important concept to remember while implementing Market
Segmentation!
 SHARE OF CUSTOMER
The portion of the customer’s purchasing that a company gets in its
product categories.

e.g.
share of voice, (Merchandising)
share of wallet, (Banking)
share of stomach, (Restaurants)
share of travel, (Airlines)
etc
 SHARE OF MARKET
The portion of the customer’s purchasing that a company gets in its
product categories. Also known as market share.
40% 38%
35% 10%
30%
19% 40%
25% 22%
20% 18%
15% 13%
9%
10%
31%
5%

0%
Daraz Telemart OLX Amazon Others Jazz Telenor Ufone Zong

Daraz.pk has the highest share of Jazz has the highest share of customer in the Unilever has the highest share of customer in
customer in the Pakistani retail market, Pakistani telecom market, with 39.2% market the Pakistani FMCG market, with 18.9%
with 38.5% market share as of June share as of June 2023. It is followed by market share as of June 2023. It is followed by
2023. It is followed by Telemart Telenor (31.4%), Ufone (19.4%), and Zong Nestle (12.8%), and Reckitt Benckiser (8.7%).
(17.7%), OLX Pakistan (12.6%), and (10%). (Nielsen)
Amazon.com.pk (9.3%). (Statista)
(GlobalData)
 CUSTOMER RELATIONSHIP GROUPS
Profitable and for short terms but Profitable and loyal for the long
not loyal. Online travel agencies High term. Amazon Prime members not
like Expedia or Booking.com often only spend more on the platform
attract butterflies. These due to their loyalty but also benefit
customers may find the best deals Butterflies True Friends from exclusive services like free
shipping and streaming content.

Potential profitability
on these platforms for their trips. (High Profitability, Short (High Profitability, Long
Term) Term)

Strangers Barnacles
Low profitability, low loyalty (Low Profitability, Short (Low Profitability, Long
Low profitable, highly loyal
jumpers. Discount airlines like Air Term) Term) customers. Sitters on Chai Dhaba,
Asia, known for offering extremely
low-cost flights, may consider local bookstores etc
travelers who book one-time
budget flights as strangers. These
customers seek the lowest price Low
and have little loyalty to brand. Short Projected loyalty Long
Term Term
 CONCEPTUAL ROUNDOFF
CHAPTER 1
• Concept of Marketing
• Introduction to the Marketing Framework
• Market Offerings (Product, Service, Information, Experience)
• Modern Marketing System
• Concept of Marketing Management
• Orientations of Marketing Management (Production, Product, Sales, Marketing)
• Overview of core concepts:
• Customer Relationship Management (CRM)
• Customer Perceived Value
• Customer Satisfaction
• Customer Engagement Marketing
• Consumer Generated Marketing
• Customer Lifetime Value (CLV)
• Customer Equity
• Share of Customer
• Share of Market
• Customer Relationship Groups
 EXPANDED MARKETING PROCESS
Create value for customers and Capture value from customers
build customer relationships in return

Engage customers, build

Understand the Construct an integrated Capture value from
Design a customer value- profitable relationships,
marketplace and customer marketing program that customers to create profits
driven marketing strategy and create customer
needs and wants delivers superior value and customer equity
delight

Select customers to serve: Product and service Customer relationship Create satisfied, loyal
Research customers and design: build strong management: build customers
market segmentation and
the marketplace brands engagement and strong
targeting
relationships with chosen
customers Create customer lifetime
Manage marketing Decide on a value Pricing: value
information and customer proposition: differentiation create real value
Partner relationship
data and positioning
Distribution: management: build strong Increase share of market
Manage demand and relationships with and share of customer
supply chains marketing partners

Promotion:
Communicate the value
proposition

Harness marketing Ensure environmental and

Manage global markets
technology social responsibility