Marketing

1. 0
Marketing: Creating Customer
Value and Satisfaction, Profitably

2. 0
Chapter Objectives (1)
1. Define marketing, employing such key elements as
value, customer relationships, needs, wants and
demands.
2. Discuss marketing management and elaborate on
the basic ideas of demand management and
building profitable customer relationships.
3. List the marketing management philosophies and
be able to distinguish between them.
4. Analyse the key marketing challenges of this
century and reflect on the ways these might be
overcome.

3. 0
What Is Marketing?
• An activity, and set of processes for
creating, communicating, delivering
and exchanging offerings that have
value for customers; partners; and
society at large.

4. Cont’d
An on-going process of planning and
executing the development,
the promotion,
the pricing, and
the distribution
of products to create exchanges that
satisfy the requirements of both the
customer and the business firm.

5. The Marketing Process

6. Selling and Promotion are:
A. are synonymous with the term marketing
B. are only the tip of the marketing iceberg
C. are the most important marketing
functions
D. are the least important marketing
functions
E. are not part of marketing

7. Understanding the Marketplace and
Consumer Needs
https://www.youtube.com/watch?v=yli7O46yuGM
• Marketers need to understand customer
needs, wants and demands and the
marketplace within which they operate.
• This requires the firm to undertake
research in its chosen target market(s).

8. 0
Needs, Wants and Demands
• Human needs are the most basic concept
underlying marketing.
– Humans have many complex needs including physical;
social; and individual needs.
– Basic needs are part of human makeup and are stimulated
by marketers, not created by them.
– When a need is not satisfied, a person will try to reduce the
significance of that need, or look for something to satisfy it.
– Advanced societies will try to develop products that will
satisfy the needs of their community.
– However, those in less-developed societies might have to
reduce their needs and satisfy them with whatever is
available.

9. 0
Needs, Wants and Demands
• Wants are the specific items that will satisfy
the particular human needs, and are shaped
by culture and individual personality.
– A hungry person in Australia or Singapore might
want something different for lunch to what a
hungry person in Japan would want.
– As a society evolves and develops, the wants of
its members expand.
– Marketers try to provide more products that can
satisfy these increasing consumer wants.

10. 0
Needs, Wants and Demands
• Demands are those specific wants that are backed
up by the consumer’s ability to buy.
– Customers view products as bundles of benefits and
choose those that give them the best value for their money.
– Successful firms go to great lengths to learn about and
understand consumers’ needs; wants; and demands.
– These firms conduct consumer research; monitor consumer
behaviour, complaints and inquiries; and analyse warranty
and service performance data.
– Understanding these needs; wants; and demands in detail
provides important input for designing marketing strategies.

11. Want supported by buying power is best
described as a(n):
A. need
B. desire
C. demand
D. exchange
E. manifestation of greed

12. Market Offerings: Goods, Services
and Experiences
• A market offering is a product that is some
combination of goods, services and experiences
that can be offered to a market to satisfy a need or
want.
• A product includes physical objects; services;
people; places; ideas; and organisations. Anything
that satisfies a need/ want can be called a product.
• Marketers often use the expression goods and
services to distinguish between tangible and
intangible products. However, these should be
viewed as a continuum, not as opposing elements.

13. 0
Perceived Value and Satisfaction
• Customer perceived value is the difference
between the benefits the customer gains in
owning and using a product, and the costs of
obtaining that product.
• Customer Satisfaction is the extent to which a
product’s perceived performance matches, or
exceeds, the buyer’s expectations.

14. 0
Exchange, Transactions and
Relationships
• Exchange is the act of obtaining a desired object
from someone by offering something in return.
• Exchange means that people do not need to depend
on handouts, or need to have the skills that are
required to produce every necessity for themselves.
• Exchange is the core concept of marketing. For an
exchange, several conditions must be satisfied:
• At least two parties must participate, and each
must offer something that the other values.
• Each party must want to deal with the other, and
be free to accept or reject an offer.
• Each party must be able to communicate and
deliver the offer.

15. 0
Cont’d
• A transaction is marketing’s unit of
measurement, and consists of a trade of
value between two parties.
• In transactions it must be possible to clearly
define what each party is giving and gaining.
• Relationship marketing is the process of
creating, maintaining and enhancing strong,
value-laden relationships with customers and
other stakeholders.

16. 0
A Market
• Is defined as the set of all actual and
potential buyers of a product.
• Each of these buyers is identified as
having a sufficiently similar need,
which can be satisfied by the same
specific product

17. 0
A Simple Marketing System

18. Marketing
• Marketing means managing markets to
bring about exchanges for the purpose of
satisfying human needs and wants.
• Marketing is carried out by both sellers
and buyers, and by company purchasing
agents.

19. Elements of a Modern Marketing
System

20. Designing a Customer-Driven
Marketing Strategy
• Marketing management is:
– The analysis, planning, implementation and
control of programs designed to create,
communicate and deliver value to customers and
facilitate managing customer relationships in
ways that enable the organisation to meet its
objectives and those of its stakeholders.
• A winning marketing strategy asks ‘what
customers will we serve?’ and ‘Who is our
target market?’

21. 0
Selecting Customers to Serve
• Marketers cannot serve all customers in
every way with a single market offering.
• It is necessary to select customers that
can be served well and profitably.
• De-marketing is marketing in which the
task is to temporarily or permanently
reduce demand to a level that is more
manageable.

22. Selecting Customers to Serve
• Managing demand means managing customers who
come from two groups: new and repeat customers.
• Keeping existing customers is important as the cost of
retaining them is much less than attracting new ones.
• Marketers retain customers by ensuring that branded
goods, services and experiences offer intrinsic value and
that there is a sense of enjoyment/ excitement associated
with the marketing offering and communication used.
• Context is important – excitement not always appropriate.
• The key to offering excitement is involvement/ interactivity.

23. 0

24. 0
Emotional Engagement

25. Choosing a Value Proposition
• A firm must decide how it will serve targeted
customers, and how it will differentiate and
position itself in the marketplace.
• A value proposition is the set of benefits or
values the firm promises to deliver to
consumers to satisfy their needs.

26. The Marketing MIX
• The basic mix is defined as the ‘4 Ps’
• Product; Price; Promotion; and Place
• Is the only means a marketer has of
handling changes in his environment
• Firms will modify their Mix in order to deal
with the situation in the market.

27. Marketing Management Orientations
• The Production Concept
• The Product Concept
• The Selling Concept
• The Marketing Concept

28. Production
• Consumers prefer products that are widely
available, and relatively inexpensive to
purchase
• The firm’s focus would be on improving
production and distribution efficiency to
reduce product costs and therefore be in a
position to sell more cheaply

29. Product
• Consumers prefer those products that
offer the most quality; the best
performance; or Innovative features.
• Firm’s focus would, primarily, be on
regular product enhancement.

30. Selling/ Sales
• Consumers will buy certain products only
if they are aggressively promoted and
sold.
• Firm’s focus would be on advertising and
sales activities, especially for those
products that consumers do not actively
look for.

31. Marketing
• Attempt to identify the needs/ wants of the
target market, and then offer a solution
that delivers more value than the
competitors’ products.
• Firm’s focus would be on delivering
customer satisfaction, at a profit.

32. Selling and Marketing Concepts

33. 0
Societal Marketing
• Organisations should determine the
needs, wants and interests of target
markets and deliver the desired
satisfaction more effectively and
efficiently than competitors in a way
that maintains or improves the
customers’ and society’s well-being.

34. Cont’d
• Overall, should aim to satisfy:
– Company profits
– Consumer needs/ wants
– Community well-being
• Preserve or enhance the long-term best
interests of the consumer and society
– Less toxic
– More durable
– Reusable; or have recyclable materials

35. Considerations Underlying the
Societal Marketing Concept

36. Integrated Marketing Program
• The company’s marketing strategy
outlines which customers the company will
serve and how it will create value.
• The integrated marketing program is
developed to actually deliver the value to
target customers.
• The program builds relationships by
transforming the strategy into action
• It is, in effect, the firm’s Marketing Mix.

37. The Extended Marketing Mix

38. Extended ‘Services’ Mix
• The ‘7 Ps’ - basic Mix, plus:
• People – high involvement in the sale
• Processes – that add to/ detract from
• Physical elements – help in assessment

39. Building Customer Relationships
• The first three steps in the marketing
process:
– Understanding the marketplace and customer
needs
– Designing a customer-driven strategy
– Marketing programs lead to the most
important step: building profitable customer
relationships.

40. Customer Relationship Management
(CRM)
• CRM is the overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction.
• CRM deals with all aspects of acquiring;
keeping; and growing customers.

41. Relationship Building Blocks:
Customer Value and Satisfaction
• The key to building long lasting relations is to create
superior customer value and satisfaction.
– Customer Perceived Value is the evaluation of
the difference between the benefits and all the
costs of a market offering relative to those of
competing offers.
– Customer Satisfaction depends on the product’s
perceived performance matching a buyer’s
expectations. If the product’s performance falls
short of expectations, the buyer is dissatisfied. If
the performance matches or exceeds
expectations, the buyer is satisfied or delighted.

42. The Changing Nature of Customer
Relationships
• Companies are building more direct and
lasting relationships with more carefully
selected customers.
– CRM is used to retain current customers and build
long term, valuable relationships with them.
– Companies now use customer profitability analysis
to identify low-value customers and relate to
winning customers (selective CRM).
– Companies aim to connect more deeply and,
often, more directly with customers. Direct
marketing is on the increase.

43. Capturing Value from Customers
• Creating Customer Loyalty and Retention
– Good CRM creates customer delight. Delighted
customers remain loyal and talk favourably about
the company.
• Growing Share of Customer
– Good CRM can help marketers to increase their
share of customer.
• Building Customer Equity
– This is the combined discounted customer
lifetime values of all the company’s current and
potential customers.

44. Building the Right Relationship with
the Right Customers

45. The New Marketing Landscape
• Marketing operates within a dynamic global
environment. Rapid changes can quickly
make a winning strategy out of date.
• Today’s companies deal with changing
customer values and orientations; market
maturity in many industries; movement of
manufacturing to least cost countries;
environmental degradation; increased global
competition; and many other economic,
political and social issues.

46. Cont’d
• However, problems can also become
marketing opportunities.
• New trends include:
– the growth of not-for-profit marketing
– increasing level of globalisation
– rapid changes in technology
– dramatic change in the world economy
– the call for more socially responsible actions.

47. Cont’d
• Not-for-profit marketing:
– Including philanthropic organisations; universities;
hospitals; museums, orchestras; and churches.
• Globalisation:
– Most marketing organisations are affected in
some way by global competition.
• Customer Information and Digital Marketing:
– The IT explosion is accelerating the rate of
change, and the growth of global competitors.

48. Cont’d
• The world economy:
– Many countries have grown poorer; around the
world, people’s needs are greater, but many lack
the means to pay for necessary goods.
• Ethical behaviour and social responsibility:
– There is an increased call for companies to take
responsibility for the social and environmental
impact of their actions.

49. Each of the following conditions must be satisfied
for an exchange to take place except:
A. the existence of a monetary system
B. two parties each possessing something
of value to the other
C. the ability to accept or reject the offer
D. ability to communicate and deliver
E. each party wanting to deal with the other