Fundamentals of Marketing & Customer Service

By MRJ

References: Business Today Book, 10th Edition by M.Mescon . C.Bovee. J.Thill

What is Marketing?

What is Marketing?

Process of planning & executing the conception, pricing, promotion, & distribution of ideas, goods, & services to create exchanges that satisfy individual & organizational objectives

Core Marketing Concepts

Needs Wants Demands Products Services Values Satisfaction Quality Exchanges Transactions Relationships Markets

Products & Services

Markets

Needs, wants, &demands

Value, Satisfaction , &quality

Exchanges, Transactions,

&relationships

Fundamental Marketing Goal

To direct customer’s basics needs into the desire to purchase specific brands

What is customer Service?

Efforts a company makes to satisfy its customers to help them realize the greatest possible value from the products they are purchasing.

Marketing Applications

Products Services Non-profit Organizations People (People Marketing) Places (Place Marketing) Causes (Cause Related Marketing)

Role of Marketing in Society

Helping People satisfy their Needs & Wants by helping organizations determine what to produce.

Customer Needs

Difference between a person’s actual & idea states; provides the basic motivation to make a purchase

Basic human needs: Food Water Air Shelter Clothing

Customer Wants

Things that are desirable in light of a person’s experiences, culture, & personality

Producers shape Wants by exposing customers to alternatives

How to enhance the appeal of products or services

By adding a utility (power of a good or service to satisfy a human need)

The four utilities

Form utility (consumer value created by converting raw materials and other inputs into finished goods & services)

Time utility (consumer value added by making a product available at convenient time)

Place utility (consumer value added by making a product available in a convenient location)

Possession utility (consumer value added when someone takes ownership of a product)

Technology & evolution of Marketing

Production Era Sales Era Marketing Era

Factory Existing Selling & Profits throughProducts Promoting sale volume

Market Customer integrated profits throughneeds marketing customer satisfaction

The Sales Era

The Marketing Era

Starting Point

Focus Means Ends

Production Era (until 1930s)

Characteristics: Demand for Products Exceed Supply Manufacturers able to sell whatever

produced Seller’s Market (market place

characterized by a shortage of products) Marketing Role to take orders & ship

goods

Sales Era (1930s-1950s)

Characteristics: Supply for Products Exceed Demand Firms spend more on advertising Firms still focused on selling whatever

produced Buyer’s market (marketplace

characterized by an abundance of products)

Marketing Era & Relationship Era

Characteristics: Marketing Concept adopting:

Stressing customers needs & wants Concentrating on specific target markets Seeking long term profitability Coordinating with marketing efforts Maintaining long-term relationships with

customers

Relationship Marketing

Focus on developing & maintaining long-term relationships with customers, suppliers, & distributers for mutual benefit

Internet & Customer relations

Brings the outside world closer Allows businesses to reach out Establish relationships with customers Market to the world Answer customers questions Better understand of customers “who

& what they want”

The Importance Of Understanding Customers

“The aim of marketing is to know & to understand the customer so well that the product or service fits him & sells itself”

Today’s customers

Sophisticated Price sensitive Demanding

Why to satisfy customers?

Acquiring new customer cost up to 5 times as much as keeping existing one

Long-term customers (buy more, take less time, bring new customers, less price sensitive)

Satisfied customers are best advertisement With Superior customer service you can charge

customers as much as 10% more than competitor Dissatisfied customers tell 20 other people about

bad experience

How to measure customers satisfaction?

Analyze customer base: Are you getting new customer? Are you losing good customers? What is your customer retention rate? What are you doing to keep customer

loyalty?

Why are today customers less loyal today?

They have more (choices, styles, options, services, products)

Have more information from (brochures, consumer publications, internet)

Empowered & raised expectations Products start to look the same Time is scarce Needs & buying habits change constantly

Not every customer is worth keeping…

“we’ve gotten a lot smarter about separating the customers we do want from the customers we don’t want” says C. Michael Armstrong

Price, Product Quality, Service quality, Innovation, Image

Customer Perceived Value

Loyalty

Market Share & Profitability

Shareholder Value

Beyond Customer Satisfaction

How to learn about customers

Consumer buying behavior Marketing Research Database Marketing Relationship marketing One-to-one marketing

Consumer Buying Behavior

Definition:Behavior exhibited by consumers as they

consider & purchase various products Consider:

Difference between organizational & consumer markets

Buyers decision process Factors influence buyer decision process

Organizational market

Customers who buy goods or services for resale or for use in conducting their own operations

3 main subgroups: Industrial/Commercial Market (buy to produce) Reseller Market (wholesalers/retailers) Government Market (federal, states, local

agencies)

Organizational market (cont.)

Buy raw materials Buy highly technical products Complex products Buy consumer products Larger Quantities Complex buying process

Consumer Market

Individuals of households that buy goods or services for personal use

Purchase smaller quantities than organizations

Simple buying process (identify problem, look for solution, gather information, select alternatives, buy, reassure purchase)

Consumer Decision Process

Need Recognition

Information search

Evaluation of alternatives

Purchase Post purchase

evaluation

Cognitive Dissonance

Anxiety following a purchase that prompts buyers to seek reassurance about the purchase, commonly known as buyer’s remorse

Used to enforce sales by:

Guarantees, phone calls, hotlines, follow-up letters

Factors influence buyer’s decision process

Culture (values, attitudes, beliefs) Social Class (upper, middle, lower) different

in (activities, goals, shopping places) Reference groups (Family, friends, co-

workers, sport enthusiasts, music lovers, computer buffs)

Self-Image “you are what you buy” Situational factors (having coupon, being in

hurry, celebrating holiday, be in bad mod)

Marketing research

Definition: The collection & analysis of information for making marketing decisions

When to conduct Marketing Research

Set product goals Develop new products Plan future marketing programs Monitor a program effectiveness Keep eye on competition Track industry trends Measure customer satisfaction

Marketing Research Tools

Used for probing customers wants & needs Tools:

Personal observations Customer surveys Questionnaires Experiments Telephone or personal interviews Studies of small groups of population Focused interviews of 6 to 10 people (focus

groups) Virtual reality

Limitations of marketing research

ToolDesignLimitations

Surveys

Administered in artificial settings

Not accurately represent marketplace

Measures the level of service currently provided

Doesn’t identify ways beyond current states

If not carefully worded & administered

misleading

-Poor indicator of future buying

behavior

Suggest what people might prefer or dislike

Not good predictor of what will excite consumers in the future

-Not a substitute for good

judgment

-Source of expensive mistakes

Database marketing

Process of building, maintaining & using customer databases for the purpose of contacting customers & transacting business

How? Recording & analyzing (customer interactions,

preferences, & buying behavior) Gathering data about customers transactions, requests, &

preferences Determine target customers Customize marketing offers for the best response

Customer relationship management software

Used to: Interact with customers Remember customer preferences & priorities Capture insights about customers in great detail Calculate customers profitability & future potential Build sophisticated but easily accessible customer

profiles Share data throughout the organization

Relationship marketing

Focus on conducting two-way communication between company & customer

Used for building long-term relationships

One-to-one marketing

Individualizing firm’s marketing efforts for a single customer to accommodate specific customer’s need

Key Steps: Identifying your customers Differentiating among them Interacting with them Customize your product or service to fit each

individual customer needs