Foundations of Marketing

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• Foundations of Marketing

BA320 Summer 2006
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Agenda for Today

• Define the marketing process.
• Explain the importance of understanding customers
  and identify the five core marketplace concepts.
• Identify the elements of a customer-driven
  marketing strategy and discuss the marketing
  management orientations.
• Discuss customer relationship management and
  creating value for and capturing value from
  customers.

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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 quality.

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Need / Want Satisfiers

• Products
• Persons
• Places
• Organizations
• Information
• Ideas

• Services
• Activity or benefit offered for sale that is
  essentially intangible and does not result in
  ownership.

• Brand Experiences
• . . . dazzle their senses, touch their hearts,
  stimulate their minds.

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Products Can Be Ideas
Marketing in Action

• Products do not have to be physical objects.
  Here the product is an idea -- protecting
  animals.
• Products can also be people, organizations,
  places, or information.

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Marketing Myopia

• Marketing myopia occurs when 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.

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Marketing in Action
Marketing Myopia in the Recording Industry
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Value Satisfaction

• Care must be taken when setting expectations
• If performance is lower than expectations,
  satisfaction is low.
• If performance is higher than expectations,
  satisfaction is high.

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Marketing in Action
Setting Expectations
This tongue in cheek ad pokes fun at the
advertising industrys tendency toward hyperbole
when setting consumer expectations for goods and
services.
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Exchange vs. Transaction

• Exchange
• Act of obtaining a desired object from someone by
  offering something in return.

• Transaction
• A trade of values between two parties.
• One party gives X to another party and gets Y in
  return. Can include cash, credit, or check.

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What Is a Market?

• The set of actual and potential buyers of a
  product.
• These people share a need or want that can be
  satisfied through exchange relationships.

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Discussion
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Figure 1-2Elements of a Modern Marketing System
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Marketing Management

• The art and science of choosing target markets
  and building profitable relationships with them.
• Requires that consumers and the marketplace be
  fully understood

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Marketing Management

• Designing a winning marketing strategy requires
  answers to the following questions

1. What customers will we serve? What is our
target market? 2. How can we best serve these
customers? What is our value proposition?
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Segmentation Target Marketing

• Market Segmentation
• Divide the market into segments of customers
• Target Marketing
• Select the segment to cultivate

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Lets Talk!
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Marketing Management Philosophies

• Production Concept
• Product Concept
• Selling Concept
• Marketing Concept
• Societal Marketing Concept

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Figure 1-3Marketing and Sales Concepts Contrasted
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Customer-Driven Marketing
Marketing in Action

• Twenty years ago, how many consumers would have
  thought to ask for laptops, wireless headsets,
  cell phones, MP3 players, PDAs, and digital
  cameras?
• Marketers must often understand customer needs
  even better than customers themselves do
  customers often cant articulate what they really
  need.

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The Marketing Plan

• Transforms the marketing strategy into action
• Includes the marketing mix and 4 Ps of
  marketing
• Product
• Price
• Place (Distribution)
• Promotion

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Customer Relationship Management

• The overall process of building and maintaining
  profitable customer relationships by delivering
  superior customer value and satisfaction.
• Acquiring customers
• Keeping customers
• Growing customers

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Discussion
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Customer Relationships

• Loyalty and retention programs build
  relationships and may feature
• Financial Benefits
• EX Frequency marketing programs
• Social Benefits
• EX Club marketing programs
• Structural Ties
• Focus is on relating directly to profitable
  customers, for the longterm.

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Customer Loyalty Retention

• Customer Lifetime Value
• The entire stream of purchases that the customer
  would make over a lifetime of patronage.

• Share of Customer
• The share a company gets of the customers
  purchasing in their product categories.

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Discussion
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Figure 1-5Customer Relationship Groups
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Rest Stop Reviewing the Concepts

• Define marketing and the marketing process.
• Explain the importance of understanding customers
  and identify the five core marketplace concepts.
• Identify the elements of a customer-driven
  marketing strategy and discuss the marketing
  management orientations.
• Discuss customer relationship management and
  creating value for and capturing value from
  customers.