1. Marketing Program-Session 1
Principles of Marketing
Instructor: Khaled Bekhet
Maastricht School of Management
2. Today’s Agenda
Review Syllabus
Overview of the Marketing Concepts and
creating customer value.
3. 1st Session Course Description
“An introduction to the basic concepts underlying
marketing, marketing definition, needs, wants,
demands, product, Exchange, Market, creating
customer value, customer satisfaction, Production
Concept Vs Product Concept Vs Selling concept Vs
Marketing concept.. And Societal Marketing Concept
Next Session we’ll discuss: Marketing Mix, Market
segmentation, target market selection Consumer
and industrial buyer behavior …”
Review Syllabus
4. Course Objectives
Understand basic concepts in Marketing
Your ability to analyze Marketing problems.
Learn how to develop
a
marketing plan.
Review Syllabus
6. Recommended Text Books
Principles of Marketing by Philip Kotler
and Gary Armstrong, 2005, (11th Edition)
Prentice –Hall Inc.
Fundamentals of Marketing by Stanton,
Etzel and Walker, 2005 , (8th Edition) McGraw
Hill Inc.
Marketing by Joel R. Evans and Barry
Berman, 2004, (9th Edition) Atomic Dog Publishing
10. Marketers are faddish, irresponsable, …
don’t think like business people …
McKinsey & Company, CEO/CMO Survey, 2005
11. Too many marketers have become so
specialized that they don’t think in terms of
the company’s big picture.
Philip Kotler
12. Marketers are frivolous and difficult to
approach
Australian Society of Certified Public Accountants
13. Cata s
otion
t ising logue Prom
A dver s
Co
Sal up
es on
Public e s
c
Servi
relation
s
What is Marketing, anyway?
E- livery
me rce De oppin
g
e t ml i
R c oa Spon Sh
i ng sorsh
ips cha nnels
g
Pricin
mail R
Pack D irect es
ea
aging Billbo rch
ards
14. Marketing Everywhere!
Understanding marketing helps you when:
You buy a new pair of shoes, or go to the
grocery store.
You open a new bank account.
You apply for a job.
You watch television.
In Fact People Buy 3 Things
….. Essential needs (Food, Shelter, ..),
Solutions, Things to feel good.
What is Marketing?
15. What is Marketing?
Marketing is the total system of business
activities designed to plan, price, promote,
and distribute want-satisfying products,
services, and ideas to target markets in order
to achieve organizational objectives- AMA
Simple: The delivery of CS at profit.
16. In your own words…
What’s
marketing ?
This is your 1st
homework :)
17. Key Words in the Definition
total system: not an ad hoc approach
business activities: but not just for
businesses
plan, price, promote, distribute: the
application of the marketing mix
need-satisfying: meeting customers’ needs
products, services, ideas: not just
products
target markets: not a broad-brush
approach
objectives: the customer’s as well as the
firm’s
18. Costs Careers
About 50% of total About 25 to 33% of the
Product/service costs work force hold
are marketing costs. marketing positions.
Why Study
Marketing?
Contributions to Contributions to Society
Individual Organizations Marketing decisions
Critical to the success affect the lives of
of the firm. individual consumers and
society as a whole.
20. Needs
The most basic concept underlying
marketing is that of human needs.
The needs are built in human nature itself.
It is not invented by marketers.
When the needs are not satisfied, a person
will try to reduce it or look for an
alternative that will satisfy it.
21. Wants
Human wants are desires for specific
satisfaction of deeper needs.
Human needs may be few, but their
wants are numerous.
Wants are continually shaped and re-
shaped by social forces and institutions
such as families, Mosque, church, schools
and business corporations.
22. Wants
Marketers do not create needs, but
influence wants.
They suggest and inform consumers about
certain products.
Marketers persuade them to purchase,
stressing the benefits of such products.
23. Demands
People have almost unlimited wants but
limited resources.
They want to choose products that provide
the most value and satisfaction for their
money.
When backed by purchasing power, wants
become demand.
That is, demand is “want for specific
products that backed up by an ability”.
24. Demands
Many desire a car such as Mercedes Benz,
Toyota, BMW, Honda etc. but only a few
are really willing and able to buy one.
It is therefore important for marketing
executives to measure not only how many
people want their company’s products, but
also measure how many of them would
actually be willing and able to buy them.
25. Products
People normally satisfy their wants and needs
with products offered in the market.
A product can be defined as anything that can be
offered to someone to satisfy a need or want.
A product can be an object, service, activity,
person, place, organization or idea.
People do not buy physical objects for their own
sake. For example why women buy lip stick and
why would you buy a toothpaste?????????.
26. But, It is not Just Products
There could be a good, a service, or an idea.
27. Exchange
Marketing takes place when people decide
to satisfy needs and wants through
exchange.
Exchange is therefore the act of getting a
desired object from someone by giving
something in return.
29. Markets
A market is defined as a set of all actual and
potential buyers of a product and service.
These buyers share particular needs or wants
that can be satisfied through exchange.
30. Simple Marketing System
Communication
Product/Service
Producer/Seller Consumer
Money
Feedback
31. Who is the Focus?
Customers
The purchasers of
organizations’
products; the focal
point of all
marketing
activities.
The Target Market
Starbucks focuses on
its target market to
meet their needs
32. Discussion Questions
Is customer satisfaction enough?
Is customer delight necessary?
Do not feel scary, It is not Homework, We
will discuss about that in class ..NOW !!!!
33. It’s All About Satisfaction
customer satisfaction, leads to long-term
profitability and success.
Whenever things of value are being
exchanged, marketing principles apply:
consider exactly what is being exchanged
(it’s “give” and “get”)
Marketing today is the role of all
company’s operations and departments
which influence satisfaction
Marketing principles apply in all
organizations
34. …and Creating Value
Successful marketing involves meeting or
exceeding customer expectations
When expectations are exceeded,
customer satisfaction or delight
results
Marketing is very much about adding
value through a broadly-defined value
proposition
The value proposition comprises
everything the company offers its
customers – must be defined very broadly
Value may is not only about price
35. Creating Customer Value
Positive Customer Negative
value
Perceived Perceived
benefits sacrifice
Monetary costs
Product benefits Time costs
Service benefits Energy costs
Relational benefits Psychological
Image benefits costs
8
36. A value proposition
Value = benefits – costs – risk
As perceived ‘Solution to Financial & Unfulfilled
by consumers my problem’ Opportunity Promises
Costs
37. Creating Value Proposition
Value proposition contains aspects of CS.
Many aspects contribute to customer
satisfaction:
The emotional connection with customers
Interaction with the firm and it employees
The technical performance of the firm
Support services and systems
The core product or service offered
Ability to add value and to differentiate as
a firm focuses more on the top levels
38. The Production Concept
Consumers will favor those products that
are widely available and low in cost.
Therefore increase production and cut
down costs.
And build profit through volume.
39. The Product Concept
Consumers will favor those products that
offer the most quality, performance, or
innovative features.
Therefore, improve quality, performance
and features.
This would lead to increased sales and
profits.
40. The Selling Concept
Consumers , if left alone , will not buy enough
of company’s products.
Therefore, promote sales aggressively.
And, build profit through quick turnover.
41. The Marketing Concept
The key to achieving organizational goals
consist in determining the needs and
wants of target markets and delivering the
desired satisfactions more effectively and
efficiently than competitors. As per Kotler
et all, 1996
And build profit through customer
satisfaction And loyalty And Innovation.
(Quote of P. Drucker-7Sources of Innovation )
43. Evolution of the Societal Marketing
Concept
The Production Concept –Existing -Scales
The Product Concept- Features
The Selling Concept-Aggressive Promo
The Marketing Concept-Integrated
Societal Marketing Concept- New
Deliver value to customers in a way that
improves customers’ and society’s long term
well being.
44. Marketing Myopia – Fit or Feature?
Management’s failure to
recognize a company’s scope
of business.
Sellers pay more attention to Need a
the specific products they drill?
offer than to the benefits and
experiences produced by the
products.
They focus on the “wants” and Need a
lose sight of the “needs.” cloth?
45. Your 2nd Homework and Last
Can you Think of some
marketing myopias that
might crossed into your
life? This is your 2nd and
last homework today?
46. The Marketing Myopia
People buy holes, not
drills!
Fashion, status,
reference groups
approval, and warmth,
but not coats!
47. The New View of Marketing 4R
The modern marketing concept emphasis
today is on keeping existing customers as
well as getting new ones
Four principles guide marketing- 4R:
retention: keeping them coming back
referrals: encourage them to
recommend us
relationships: build an emotional
connection
recovery: solve problems as they arise
48. Next Class
Marketing Mix and Market segmentation, Target
Markets selection, Consumer and industrial buyer
behavior
Discussion Session: 2 Case Studies
Next Class Debate:
What is the Marketing Mix?, What are the Market
coverage different strategies?, What are Steps in
Segmentation, Targeting, and Positioning? How
would you segment consumer and Industrial
Markets
More simple: Marketing is the delivery of customer satisfaction at a profit.
16
The CEO of Zappos.com says that "every call is perceived as a way to make a positive emotional connection with a customer." So, what does "emotional connection" mean? It's about capturing hearts and minds, for how a company makes us feel determines our opinions about it and our buying decisions. It is more psychological than logical. And, more unconscious than conscious.
The ultimate goal of any organization is to gain and retain customers. The only way to achieve this goal is Innovation and Marketing. The rest only Adds cost. Peter Drucker.
If we want to know what a business is, we have to start with its purpose. And its purpose must lie outside the business itself. In fact, it must lie in society since a business enterprise is an organ of society. There is one valid definition of business purpose: to create a customer. P. Drucker
Web TV seemed like a couch potato’s dream a TV with a set top box that allows you to surf the WEB and watch TV. Despite 50 million promotional blitz by WEBTv and partners Sony and Philips Electronics only 50,000 subscribers signed up. Nothing was wrong with the product itself which displayed Internet information on a standard TV set, it is just the original owner of WEB Tv (now owned by Microsoft) didn’t know the market. The problem was the wrong marketing message. Couch potatoes want to be better entertained whereas computer users want to surf the WEB using small PC screens. The WWW had trouble with TV. To people conditioned by the tube the WEB is slow, static and arcane at least when compared with star truck or Baywatch reruns. A revamped campaign now emphasized entertainment over education.
“ Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” Stephen R. Covey- The 7 habits of Highly effective people.
