Marketing: An Introduction Armstrong, Kotler

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Marketing An Introduction Armstrong, Kotler

• Chapter One
• Marketing Managing Profitable Customer
  Relationships

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Looking Ahead

• Define marketing and the marketing processes.
• Explain the importance of understanding customers
  and the marketplace.
• Identify the five core marketplace concepts.
• Identify the key elements of a customer-driven
  marketing strategy.
• Discuss customer relationship management and ways
  of creating and obtaining value.
• Describe the major trends and forces changing
  todays marketing landscape.

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• What is marketing?
• Marketing is building profitable customer
  relationships. The aim of marketing is to create
  value for customers and to capture value in
  return. Companies know if they take care of their
  customers ( delivering on their promises) ,
  market share and profits will follow.
• Definition
• We define marketing as a social and managerial
  process by which individuals and groups obtain
  what they need and want through creating and
  exchanging value with others.

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The Marketing Process

• Understand the marketplace and customer needs and
  wants.
• Design a customer-driven marketing strategy.
• Construct a marketing program that delivers
  superior value.
• Build profitable relationships and create
  customer delight.
• Capture value from customers to create profits
  and customer equity. Figure 1

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Marketing process
Capture value from Customers to Create profits
and Customer quality

• Figure 1

Build profitable Relationships and Create
customer delight
Construct a Marketing program That
delivers Superior value
Design a Customer-driven Marketing strategy
Understand The marketplace And customer needs And
wants
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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• 1- Needs, wants, and demands
• Needs are states of felt deprivation. All
  humanity have the same needs
• Physical needs
• Food, clothing, shelter, safety.
• Social needs
• Belonging, affection.
• Individual needs
• Learning, knowledge, self-expression

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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• Wants are needs shaped by culture and individual
  personality. Example An American needs for food
  but wants a Big Mac. A Chinese needs for food but
  wants frog legs.
• Demands are wants combined with buying power.
  Example Porsche or Kia.
• Marketers spends time and money for a market
  research to understand the customers needs,
  wants, and demands.

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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• 2- Products, Services, Experiences
• consumer needs and wants are fulfilled through a
  marketing offer, which is some combination of
  products, services, or experiences offered to a
  market to satisfy a need.
• Products tangible, like food, goodsetc.
• Services intangible, banking, telecometc.
• Experiences Brand experiences, like theater.

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• Understanding the marketplace and consumer needs
• Marketing Myopia
• Sellers pay more attention to the specific
  products they offer than to the benefits and
  experiences produced by the products. They focus
  on the wants and lose sight of the needs.
• An article published by Harvard Business school
  defined the term marketing Myopia
• Marketing myopia is true for all companies who
  define their markets too narrowly. urging
  organizations to define their industries broadly
  to take advantage of growth opportunities.
  Experience shows that when a business has
  redefined its market, it has continued to grow as
  new targets are set .

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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• 3- Value and Satisfaction
• If the performance and the customers experience
  is lower than expectations, then customer
  satisfaction is low.
• If the performance and the customers experience
  meets expectations, then the customer is
  satisfied.
• If the performance and the customers experience
  exceeds expectations, then the customer is
  delighted.

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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• 4- Exchange, transactions, and relationships
• Exchange.
• The act of obtaining a desired object from
  someone by offering something in return.
• Transaction
• - consists of a trade values between two
  parties.
• The goal of marketers is to build solid
  relationship with customers and retaining them by
  delivering superior value.

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• Understanding the marketplace and consumer needs
• There are five core marketplace concepts
• 5- Markets
• The set of all actual and potential buyers of
  a product. Sellers must search for buyers, both
  buyers and sellers are carried out by marketing.
• - Elements of a Modern Marketing systems
• Figure 2

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• Elements of a Modern Marketing systems

Figure 2
Company
Supplier
Final Consumers
Marketing Intermediaries
Competitors
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• Designing a customer- driven marketing strategy
• Once it fully understands consumers and the
  marketplace, marketing management can design a
  customer-driven marketing strategy.
• Customer-Driven Marketing
• Divide markets into segments.
• Choose the right segment to target.
• Offer a unique value proposition.
• Differentiate your offer from competitor offers.
• Build customer value and satisfaction.
• Building long-term customer relationships

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• Designing a customer- driven marketing strategy
• Marketing Management
• The art and science of choosing target markets
  and building profitable relationships with them.
• Two questions should be asked here
• _ What customers will we serve? (our target)
• _ How can we serve them best? ( Value)

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• Designing a customer- driven marketing strategy
• Segmentation and Targeting
• Selecting customer to serve first dividing
  the market into segments, Second select the
  segment to be our target market. Porsche company
  target customers with high income.
• Deciding on a value proposition A set of
  benefits or values it promises to deliver to
  consumers to satisfy their needs. means the
  company must decide how it will differentiate
  itself from other competitors. Porsche promises
  driving performance and excitement. They say
  what a dog feels when the leash breaks.

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• A philosophy should guide the marketing
  strategy to any company.
• The philosophy could be one or more of the
  following
• Production affordability and availability.
• Product -- quality and innovation.
• Selling -- promotion and hard selling.
• Marketing -- customer satisfaction and
  relationships.
• Societal long-term value to both customer and
  society.

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• 1- Production philosophy
• it holds that consumers will favor products
  that are available and highly affordable. Its
  effective strategy in two situations
• -When a demand for a product exceeds the supply.
• -When the product cost is too high, and improve
  productivity is needed to reduce the cost, to
  gain market share.
• Example Evian water, McDonalds.

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• 2- Product philosophy
• holds that consumers will favor a products
  that offer the most in quality, performance, and
  innovative features.
• In this case the company should focus on
  the continuous improving.
• Examples Nokia Mobile, Motorola, Sony..

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• 3- Selling philosophy
• Holds that the customer will not buy enough
  of the firms products unless it under-takes a
  large-scale selling and promotion effort.
• Example Life-Insurance
• 4- Marketing philosophy
• Holds that achieving organizational goals
  depends on knowing the needs and wants of target
  markets and deliver value to compete in the
  marketplace. The job is not to find the right
  customers for your product, but the right
  products for your customers.
• Dell, Marriott, Disney Figure 3.

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• 5-Societal marketing philosophy
• Balances human welfare, company profits and
  consumer satisfaction
• Example Johnson Johnson Credo honesty,
  integrity, and people before profit. Figure 4
• Many calls from the Healthy Associations warn
  people form the consequences results from Fast
  Food chains.

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Starting point
Figure 3
Focus
Means
Ends
Selling Promoting
Selling philosophy
Existing products
Profits Through Sales volume
Factory
Customer needs
Integrated Marketing
Marketing philosophy
Market
Profits Through Customer Satisfaction
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Social Marketing philosophy Figure 4
Society (Human being)
Company (profits)
Consumers Want satisfaction
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• Building Relationships
• Relationships span from the basic to tight
  integrated relationships.
• Successful relationships are built on
• Financial benefits like VIP, Airline frequent
  miles
• Social benefits like member of clubs, magazines
• Structural ties like tracking orders online.
• Partner Relationship Marketing
• Every department in an organization contributes
  to customer satisfaction.
• Suppliers are carefully controlled through supply
  chain management.
• Strategic alliances create new opportunities to
  delight customers.

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• Outcomes of creating customer value
• 1- Customer loyalty and retention delighted
  customers remain loyal and talk favorably to
  others about the company and its products, and
  turn to be life-time value.
• 2- share of market and share of customer many
  companies are increasing their variety of
  products and services to increase their profits
  form existing customers. Amazon offer videos,
  toys, electronics, beside books.
• 3- customer equity is the total combined
  customer life-time values of all the companys
  customers. They view customers as an assets need
  to be maximized. Figure 5

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• Figure 5
• less loyalty
  high loyalty
• High
• Profitability
• Low
• profitability

Butterflies Good fit between companys Offerings
and customers Needs. High profit potential
True friends Good fit between companys Offerings
and customers Needs, highest profit potential
Strangers Little fit between companys Offerings
and customers Needs, lowest profit potential
Barnacles Limited fit between company's Offerings
and customers Needs, low profit potential
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New Marketing Technologies

• Technology has changed how marketers build value.
• Internet and e-commerce/e-business.
• Fast and global communications.
• Wireless technologies.
• International trade is the new frontier.
• Globalization
• Capitalism

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Ethics and Responsibility

• Worldwide consumerism and environmentalism
  movements exert. pressure for greater
  responsibility
• Seeking ways to make a profit by serving the best
  long-run interests of customers and communities.