Principles of Marketing

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Principles of Marketing

• Spring 2005
• Marketing Creating Satisfied Customers

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About this class

• Course is a ____ of the marketing ____, including
  the marketing _____ and _____ ______ marketing
  _____ with emphasis on ______ ____ _____ and
  ______responsibilities of ______.

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Required materials

• Marketing, Pride/Ferrell, 12 ed. 2003, Houghton
  Mifflin
• Helpful complements
• www.prideferrell.com
• Companion CD
• http//som.csudh.edu/depts/marketing/kcelly

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About Prof. Kirti Sawhney Celly

• Professional Experience

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About Prof. Kirti Sawhney Celly

• Education
• Ph.D.
• University of Southern California, Business,
  Marketing
• M.M.S. (alias MBPA)
• University of Bombay, Business, Finance
• B.A.
• University of Bombay, Economics, Statistics,
  Sociology

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Agenda

• Why Study Marketing?
• What is Marketing?
• Timeless Marketing Blunders
• What is Customer Satisfaction?

• Reading Milestones
• This Week Syllabus, Chapter 1, Appendix A
• Coming Week Chapters 3 4

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Why Study Marketing

• Creating Value
• What is Value?

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What is Marketing?

• The results of brainstorming with previous
  classes
• Brainstorming 60 seconds MAX ideas 20 min 4

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Marketing as landscape

• Marketing is omnipresent
• Marketing is art, theatre
• Transformed retail spaces
• Collectibles
• Archives of advertising and products

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Marketing as philosophy--I
There is only one valid definition of business
purpose--to create a satisfied customer. It is
the customer who determines what the business is.
Because its purpose is to create a customer, any
business enterprise has two--and only these
two--basic functions marketing and innovation.
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Marketing as philosophy--II
Actually, marketing is so basic that it is not
just enough to have a strong salesforce and to
entrust marketing to it. Marketing is not only
much broader than selling it is not a
specialized activity at all. It is the whole
business seen from the point of view of its final
result, that is, from its customers point of
view. Peter Drucker, 1954
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Marketing as functionExchange

• Marketing is a social and managerial process by
  which individuals and groups obtain what they
  need and want through creating and exchanging
  products and value with others
• Creating, promoting, distributing and pricing
  products
• Creating satisfying exchange relationships
• Focused on customers

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Marketing as exchange

• Importance of Customer Relationships increasing
• Relationship marketing
• United Mileage Plus
• Hallmarks Gold Crown Card program Hallmark.com
• Mead Johnsons Enfamil Family Beginnings
• One-to-one marketing
• Amazon.com

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What is exchanged?

• Goods (tangibles)
• Services (intangibles)
• Ideas (intangibles)
• Information

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What is Value

• Consumer perspective
• Benefits/Costs
• Monetary Non-Monetary

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Timeless Marketing Blunders

• Oversubscribing to Conventional Wisdom
• Building Better Mousetraps
• Focusing on Moving Product--Overselling
• Selling Too Much Sizzle, Not Enough Steak

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I. Oversubscribing to Conventional Wisdom...or
The Production Concept

• If you build a cheaper mousetrap, the world will
  beat a path to your doorstep

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I. Oversubscribing to Conventional Wisdom...or
The Production Concept

• Problem with the Production Concept
• Excessive preoccupation with costs
• Liability issues
• Mass markets are giving way to small segments and
  niches

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II. Building Better Mousetraps...or The
Product Concept

• If you make a better mousetrap the world will
• beat a path to your doorstep
• Ralph Waldo Emerson

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II. Building Better Mousetraps...or The
Product Concept

• Problem with the Product Concept
• Focus on features, product quality, performance,
  not
• benefits sought by consumers
• Consumers are looking for a solution to the mouse
  problem

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III. Focusing on Moving Productor The Selling
Concept

• When supply exceeds demand, aggressive selling
  and advertising is necessary.
• E.g, Mass production, End of year sales,
  clearances

Factory Existing Products Selling
Promoting Profits through sales volume
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The Marketing Concept

• Outside-in views beginning with market analysis
  to assess customer needs and wants, defining
  market segments and designing marketing programs
  to meet those needs.

Market Customer needs Integrated
marketing Profits through customer satisfaction
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The Marketing Concept
Customers
Senior managers

Marketing philosophy function systems
Employees
Managerial decisions aimed at creating value for
customers
Customers
Philosophy that an organization should try to
satisfy customers needs through a coordinated
set of activities that also allows it to achieve
its goals
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Societal Marketing Concept

• Marketing Concept AND serve societal well being
• Satisfy customers needs
• Serve consumer best interests
• Meet organizational goals (e.g., profit)
• Serve societys best interest

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Societal Marketing Concept Challenges

• Consumers can (and do) want what is not good for
  them.
• Is this the business of business?
• Is business even qualified to determine what is
  good for society?
• Businesses find it harder be profitable.
• NOTE that the societal marketing concept often
  makes sense because of its long term effects on
  revenues

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Selling Too Much Sizzle, Not Enough Steak

• The consumer is not a fool.
• Marketing MUST create AND manage expectations

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What is Customer Satisfaction?

• Expectation-Disconfirmation Model
• Quotes from managers

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Expectation-Disconfirmation

• Customer Satisfaction is achieved through
  Determining and understanding customers needs
  and expectations
• Providing goods and services which meet or beat
  them

Delivery Exp. Delivery
Confirmation
Disconfirmation
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Quick Review

• You walk in to a specialty shoe store where the
  salesperson virtually attacks you, trying to
  persuade you to buy a pair of expensive tennis
  shoes with many new features from a high-tech
  line of a famous shoe manufacturer. The
  salespersons behavior is an example of the
  selling concept or a sales orientation.
• What are possible explanations for the
  salespersons behavior?
• What would be different if the salesperson was
  marketing oriented?
• How could the salespersons behavior be modified?

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Quick Review

• You are standing in the back of a long line at
  the Taco Bell on campus. With you is a student
  who has just arrived from North Korea. The new
  manager at Taco Bell has recently completed an
  introduction to marketing class from Prof. Celly
  and has designed a survey to measure customer
  satisfaction as you leave the restaurant with
  your food. As she looks at your responses, she
  notices that you state you are highly
  dissatisfied with the service, while the student
  from North Korea says she is highly satisfied.
• Using expectation-disconfirmation theory,
  provide me with a few reasons for these responses.