principle of marketing

Marketing and Management Syllabus

• Principle of marketing• Strategic marketing planning• The MBO system• Product promotion• Market segmentation• Positioning and product life cycle• Branding and Pricing• Purchasing• Organizational structure• Personal management• Inventory Management

Principles of Marketing

What is Marketing?

- A set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholder.

- It is the art and science of choosing target markets and building profitable relationships with them.

Meaning?

• Processes – traditionally refers to 4Ps, now include after sales supports, customer services.

• Creating and Delivering value – address customer needs and wants, and create high customer satisfaction.

• In business, do it in a way that is mutually beneficial in the long run (so focus on long-term profits instead of short-term profits).

Many things can be marketed

• Goods

• Services

• Experience

• Properties

• Information

•Places•Events•Persons•Organizations•Ideas

Importance of customer satisfaction

• It is important to consistently deliver product and service that create values for customers.

• Brand equity and customer loyalty are built in this way.

• This can be explained in terms of theory of uncertainty.

• Examples. My Spa experience at Holt Renfrew, Auto repair shop.

Scope of Marketing

Marketing means adopting a customer customer focusfocus for the organization; keeping the customer’s needs in mind all the time. It may not always mean making an immediate sale.

What is Marketing?

It’s All About Satisfaction

• The ultimate goal is customer satisfaction, which 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 applied to virtually all aspects of a company’s operation that has the potential to influence customer satisfaction

• Marketing principles apply in all organizations

…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

• Value may be created by marketers in many different ways: value is not only about price

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.• …..

What is Marketing?

The Marketing Mix

• The conventional view of the marketing mix consisted of four components: product, price, distribution and promotion.

• Generally acknowledged that this is too narrow today; now includes service, processes, technology.

• Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

The Focus of Marketing

• Marketing involves the exchange of things of value with various target groups.

• Much of marketing’s focus today is on the creation of value for customers; those who are best at creating value earn customer loyalty.

• Ultimately, successful marketers develop a close relationship with customers and others. This is a long-term strategy that guarantees the future success of the company.

Drivers of Customer Satisfaction

• Many aspects of the firm’s value proposition 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

Marketers and Markets

• Marketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B.

• The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers.

• It is essential that marketers have a detailed understanding of consumers, their needs and wants.

• Much happens before and after the sale to affect customer satisfaction

Evolution of Marketing Thinking

• Marketing has evolved through five stages:– in the product-focus stage, emphasis is on producing

more and better products– at the sales-orientation stage, focus shift to selling,

moving product from warehouse to customer– at the customer-interest stage, emphasis shifts to the

customer and the satisfaction of needs– the customer-service stage places emphasis on

customer service as well as good products– the customer-relationship stage sees a much longer-

term focus on building relationships with customers

Figure 1-6:Marketing Thinking Drives the Value Proposition

Customer-Relationship Thinking

• The customer-relationship view of marketing requires some new thinking:

• It is very much a long-term strategy• Requires that management take the

customer’s view• The value proposition must be defined very

broadly• Different measures of success are needed

The New View of Marketing

• The marketing emphasis today is on keeping existing customers as well as getting new ones

• Four principles guide marketing:– retention: keeping them coming back– referrals: encourage them to recommend us– relationships: build an emotional connection– recovery: solve problems as they arise

The Modern Marketing Concept

• All planning and operations are designed to create long-term customer satisfaction: “everyone in the firm is involved in marketing”

• All of the marketing activities of the organization should be consistently designed and delivered, and should be coordinated across departments

• All of the organization’s planning and operations are customer-oriented, meeting customer needs and achieving profitability

• All activities are focused on the long-term and designed to create an emotional connection with customers

Marketing challenges

• Technological advances, rapid globalization and continuing social and economic shifts are causing marketplace changes.

• Major marketing developments can be grouped under the theme of connecting via technology ( advance in computers, telecommunications, video conference etc. are major forces.)

The Purpose of a Business Is to Create and Retain the Right Customer

The Four PsThe Four Ps

MarketingMix

Product

Price Promotion

Place(Distribution)

The Promotional Mix

Advertising Sales promotion Packaging Personal selling Public relations

Defining Marketing

Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and value with others.

Core Marketing Concepts

Needs, wants, and demands

Products

Value, satisfaction, and quality

Exchange, transactions,

and relationships

Markets

Need, Wants, Demands

• Need. A human need is a state of felt deprivation. Examples include the need for food, clothing, warmth and safety.

• Wants. Wants are how people communicate their needs. A hungry person may want a hamburger, noodles, or cheese and bread.

• Demands. When backed by buying power, wants become demands.

Product

A product is anything that can be offered to satisfy a need or a want.

Value, Satisfaction, and Quality

• Customer value is the difference between the benefits that the customer gains from owning and/or using a product and the costs of obtaining the product.

• Customer satisfaction depends on a product’s perceived performance in delivering value relative to a buyer’s expectations.

• Quality begins with customer needs and ends with customer satisfaction.

Satisfaction and Customer Behavior

63

30

8

65

25

10

0

10

20

30

40

50

60

70

1 2 31 = Very Satisfied, 7=Very Dissatisfied

* Even though 3 is still a "positive" score on the above 7 point scale, few

customers giving that rating will return

Per

cen

t

Definitely Recommend

Definitely Return

Why Satisfaction May Not Lead To Customer Loyalty

• Some customers never return to an area – but they can still recommend

• Some customers shop for the best price - differentiate your product

• Some customers like to have different purchase experiences – like to stay or dine at different places

Why Managers Should Be Concerned About Customer Loyalty

• Customer loyalty leads to increased profit

• Customer loyalty leads to increased

partnership

• Lower marketing and sales costs

Exchange, Transactions, and Relationships

• Exchange is the act of obtaining a desired object from someone by offering something in return.

• A transaction is marketing’s unit of measurement and consists of a trade of values between two parties.

• Relationship marketing builds relationships with valued customers, distributors, dealers, and suppliers by promising and consistently delivering high-quality products, good service, and fair prices.

Markets

A market is a set of actual and potential buyers who might transact with a seller.

A market is a set of actual and potential buyers who might transact with a seller.

Marketing and Sales Concepts Contrasted

FactoryExistingProducts

Sellingand

Promoting

ProfitsthroughVolume

The Selling ConceptThe Selling Concept

StartingPoint Focus Means Ends

MarketCustomer

NeedsIntegratedMarketing

Profitsthrough

Satisfaction

The Marketing ConceptThe Marketing Concept

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

•Consumers favor products that are available and highly affordable.•Improve production and distribution.

•Consumers favor products that offer the most quality, performance, and innovative features.

•Consumers will buy products only if the company promotes/ sells these products.

•Focuses on needs/ wants of target markets & delivering satisfaction better than competitors.

•Focuses on needs/ wants of target markets & delivering superior value.

Marketing Management Philosophies

Marketing’s Future

• “It (marketing) encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customer’s point of view.”

• Peter Drucker

• Marketing has become the job of everyone.