1. Chapter No 1

2. Marketing
Marketing is managing profitable customer relationships

3. Marketing Defined
 Old Concept  Telling and Selling
 New Concept  Satisfying Customer Needs
HOW?
 Understand Consumer Needs
 Develop product having superior values
 Price, Promote and Distribute them Effectively
The process by which companies create value for customers
and build strong customer relationships in order to capture value
from customers in return.

4. No Single Definition
21st Centaury
 “The marketing of today is not just satisfying the
customer through your goods and services but also
creation of strong relationship with customer, this
enables the marketer to determine their needs before
they arise, develop the product prior they want and
fulfill their desires at a level above their expectation”
New Definition of Marketing (est. in 2007)
 Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.

5. Marketing Process

6. 1. Understanding the Marketplace and Customer
Needs
a) Needs, Wants and Demands
b) Market offerings (Product, Services and Experiences)
c) Value and Satisfaction
d) Exchange and relationship
e) Markets

7. a. Needs, Wants and Demands
 Need: states of felt deprivation Physical, social, Individual Need for
knowledge and expression. I m Hungry
 Wants: The form human needs take as they are shaped by culture
and individual personality. I need Zinger
 Demands: Human wants that are backed by buying power. I need
Mac Zinger
 Spend time with customers
 P&G spends time with customers
 Southwest Airlines Executives
 Harley- Davidson’s

8. b. Market Offerings—Products, Services,
and Experiences
 Needs wants and Demands fulfills through Market Offerings
 Product
 Services
 Others (Persons, Places, Organization, Information and Ideas)
 Marketing Myopia : They are so taken with their products that they focus only on
existing wants and lose sight of underlying customer needs.

9. c. Customer Value and Satisfaction
 Consumers usually face a broad array of products and
services that might satisfy a given need.
 How do they choose among these many market
offerings?
 Customers form expectations about the value and
satisfaction that various market offerings will deliver and
buy accordingly.
 Marketers must be careful to set the right level of
expectations.
 If set Expectation too LOW
 If set Expectation Too High

10. d. Exchanges and Relationships
 Marketing is a Exchange Process
 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.
 Not only to attract but retain and grow

11. e. Markets
 The set of all actual and potential buyers of a
product or service.

12. 2. Designing a Customer-Driven Marketing
Strategy
 Marketing management: The 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.

13. a. Selecting Market To Serve
 Market Segmentation
 Target Marketing
 Not to maximize your customer
 Better Serve

14. b. Set Value Proposition
 value proposition: is the set of benefits or values it
promises to deliver to consumers to satisfy their
needs.
 Why I buy this brand?

15. c. Marketing Management Orientation
 Production Concept
 Product Concept
 Selling Concept
 Marketing Concept (Customer Driven and Customer Driving
marketing)
Make and Sell (Inside out)
Sense and Respond
(Outside in)

16.  Societal Marketing Concept (sustainable marketing)
 questions whether the pure marketing concept overlooks possible conflicts between
consumer short-run wants and consumer long-run welfare.
 deliver value to customers in a way that maintains or improves both the consumer’s
and society’s well-being.
 Social responsibility “isn’t just good for the planet,” says the company. “It’s good for
business

17. (3) Preparing an integrated Marketing Plans
and Programs
 The marketing program builds customer relationships by transforming the
marketing strategy into action.
 It consists of the firm’s marketing mix, the set of marketing tools the firm
uses to implement its marketing strategy.
 Product
 Price
 Place Promotion

18. (4) Building Customer Relationship
 Customer Relationship Management
 Some marketers define it narrowly as a customer data management activity (a
practice called CRM).
 managing detailed information about individual customers and carefully
managing customer “touchpoints” to maximize customer loyalty.
 “overall process of building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.”
 Relationship Building Blocks: Customer Value and
Satisfaction
 Consumer Perceive Value (cost benefits analysis)
 value might mean paying more to get more
 Consumer Satisfaction (depends on perceive performance)
 Expectation and Performance
 Not Loyal but “customer evangelists”
 Ritz Carlton Hotel (Laundry) (Picture Frame) (90% repeat Purchase and 95%
Stisfied)

19.  Customer Satisfaction Levels
 Built relationship on target market level
 LOW Margin Customer  Basic Relationship  Relationship through Brand
Building Advertising, Public Relationship and Domain Names
 full partnerships with key customers.
How Stronger Bond With Customers?
 Frequency marketing programs
 Club Marketing Programs

20. The Changing Nature of Customer
Relationships
 Relating with More Carefully Selected Customers
 Few firms today still practice true mass marketing
 Target fewer, more profitable customers.
 customer profitability analysis.
 “Some are more costly to serve than to lose.”
 Screen out than progress otherwise
 What companies do with unprofitable customers?
 Relating More Deeply and Interactively
 Two-Way Customer Relationships (e-mail, Web sites, blogs, cell
phones, and video sharing to online communities and social
networks, such as Facebook, YouTube, and Twitter.)
 customer-managed relationships.
 Marketing relationships in which customers, empowered by today’s new
digital technologies, interact with companies and with each other to
shape their relationships with brands.
 online social networks.

21.  Consumer-Generated Marketing.
 Brand exchanges created by consumers invited and uninvited— by
which consumers are playing an increasing role in shaping their own
brand experiences and those of other consumers.
 companies are inviting consumers to play a more active role in
shaping products and brand messages.
 Partner Relationship Management
 Working closely with partners in other company departments and outside the
company to jointly bring greater value to customers.
 Inside Company
 Outside Company (Supply chain and Supply chain management)

22. (5) Capturing Value from Customers
 Customer Loyalty and retention
 in an improved economy, 55 percent of consumers say
they would rather get the best price than the best brand.
 It’s five times cheaper to keep an old customer than
acquire a new one.
 Customer lifetime value
 The value of the entire stream of purchases that the
customer would make over a lifetime of patronage.
 Growing Share of Customer
 good customer relationship management can help
marketers increase their share of customer (the share
they get of the customer’s purchasing in their product
categories.).
 Cross selling and up selling

23. Building Customer Equity
 Customer equity
 total combined customer lifetime values of all of the
company’s current and potential customers.
 the more loyal the firm’s profitable customers, the higher
its customer equity.
 Cadillac defined American luxury
 Cadillac’s share of the luxury car market reached a
whopping 51 percent in 1976.
 Rosy Future but
 Cadillac customers were getting older (average age 60)
and average customer lifetime value was falling. Many
Cadillac buyers were on their last cars.

24.  Building the Right Relationships with the Right
Customers
 But not all customers, not even all loyal customers,
 some loyal customers can be unprofitable