View
352
Download
2
Category
Tags:
Preview:
Citation preview
MARKETING Marketing: Creating and Capturing Customer Value Prof: Amir Nasry
What Is Marketing?
Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others
PHILIP KOTLER
Simply put:
Marketing is the delivery of customer satisfaction at a profit.
What Is Marketing? The Marketing Process
Understanding the Marketplace and Customer Needs
Customer needs, wants, and demands
Market offerings (P&S)
Value and satisfaction
Exchanges and relationships
Markets
Core Concepts
Needs, Wants And Demands
• NEED : A state of felt deprivation of some basic satisfaction (Food, Clothing, Shelter, Belonging etc. )
• WANTS : Wants are desires for specific satisfiers of the deeper needs. Needs are few and wants are many .
• DEMANDS : are wants backed by ------Ability to buy and Willingness to buy
Understanding the Marketplace and Customer Needs
•States of deprivation
•Physical—food, clothing, warmth, safety
•Social—belonging and affection
•Individual—knowledge and self-expression
Needs
•Form that needs take as they are shaped by culture and individual personality Wants
•Wants backed by buying power Demands
Customer Needs, Wants, and Demands
Products / Offers / Satisfiers / Resources
Anything that can be offered to someone to satisfy a need or want is a product .
Product refers to physical object
Services refer to intangible object
Value and Satisfaction
• Value is the customers’ estimate of the Product’s capacity to satisfy a set of goals
• Value is the ratio between what the customer gets and what he gives (V=B/C)
• Customer gets benefits & assume costs
• WHEN :Customer Expectance=Performance (satisfied)
• Customer Expectance>Performance (dis-satisfied)
• Customer Expectance<Performance (Highly satisfied)
Understanding the Marketplace and Customer Needs
Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want
Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs
Customer Value and Satisfaction Expectations
Customers
• Value and satisfaction
Marketers • Set the right level of
expectations
• Not too high or low
Understanding the Marketplace and Customer Needs
Three Basic Principles Of Marketing
(1) The Customer Value and Value Equation:
V=B/P Where; V=Value
B= Perceived Benefits
P= Price
Value Map
Designing a Customer-Driven Marketing Strategy
Choosing a Value Proposition
The value proposition is the set
of benefits or values a company
promises to deliver to customers
to satisfy their needs
Value Proposition
Value Proposition
Involving all benefits
Favourable points of difference
Resonating focus
Exchange is the act of obtaining a
desired object from someone by offering something in return
Understanding the Marketplace and Customer Needs
Exchange and Transaction
• Exchange is the act of obtaining a desired product by offering something in return .
• Exchange takes place when 5 conditions are satisfied:
(a) Two parties should be there
(b) Each party must have something of value to the other
(c) Each party is capable of communication & delivery
(d) Each party is free to accept or reject the offer
(e) Each party believes that it is appropriate to deal with the other party
Exchange and Transaction
Exchange is a process rather than event. It is a value creating process because it normally leaves both parties better off.
A transaction is a trade of values between two or more parties ( A BARTER TRANSACTION OR A MONETARY TRANSACTION ).
Understanding the Marketplace and Customer Needs
Markets are the set of actual and potential buyers of a product
Strategic Concept of Marketing
• Shifted the focus of Marketing from Product or customer to the CUSTOMER IN THE CONTEXT OF THE BROADER EXTERNAL ENVIRONMENT .
• To succeed, marketers must know the customer in a context including the competition, Govt. Policy& regulation and the broader economic, social and political macro forces that shape the evolution of market.
Strategic Concept of Marketing
Shifted the Marketing Objectives from PROFIT TO STAKEHOLDER BENEFITS.
Stakeholders are individuals or groups who have an interest in the activity of a company . They include-----The employees
and management, Customers, Society, Shareholders, Financiers/ Bankers, Government etc.
Strategic Concept of Marketing
Strategic Marketing Concept is Strategic Management, which integrates marketing with the other management functions. ( Major task is Profit for Stakeholders’ benefits ).
Designing a Customer-Driven Marketing Strategy
Marketing management is the art and science of choosing target markets and building profitable relationships with them
What customers will we serve?
How can we best serve these customers?
Marketing System
Marketing is concerned with the flow of goods and services from the points of production to the points of consumption.
There is a systematic arrangement of these functions of marketing to move the goods and services to the needy persons. This system is essential to the creation of time, place and possession utilities.
Marketing System
• A dynamic marketing system must be willing to undertake the following specific activities: 1. Define market area.
2. Research consumer wants and needs.
3. Develop and redevelop product / service.
4. Select, train, motivate and control human resources.
5. Develop sales approach and advertising support.
Goals Of The Marketing System
1. Maximize Consumption
2. Maximize Consumer Satisfaction
3. Maximize Choice
4. Maximize Life Quality
Three Basic Principles Of Marketing
The essence of marketing can be summarized in three great principles.
first identifies the purpose and task of marketing,
second is the competitive reality of marketing
Third is the principal means for achieving the first two.
Three Basic Principles Of Marketing
Competitive or Differential Advantage :
The total offer must be more attractive than that of the competition in order to create a competitive advantage.
Focus or the Concentration of Attention :
The task of creating Customer Value at a Competitive advantage.
Customer As The Controlling Function
Production Finance
Marketing Personnel
CUSTOMER
Marketing As The Integrative Function
CUSTOMER
Production
HR Finance
Marketing
Three Levels Of Marketing
Responsive Marketing
Anticipative Marketing
Need Shaping Marketing
Responsive Marketing
It is the form of marketing when some company defines an existing clear need and prepare an affordable solution.
(Recognizing that women wanted to spend less time for cooking and cleaning, led to the invention of modern washing machine, microwave oven etc.)
Anticipative Marketing
It is a form of marketing when a company recognize an emergent or latent need, and come out with an affordable solution. Evian, Perrier anticipated growing market for bottled drinking water as the quality of water deteriorated in many places.
Anticipative marketing is more risky than responsive
marketing; companies may come into market too
early or too late, or may even be totally wrong about
thinking that such a market would develop.(eg. Dish
washers in India)
Need Shaped Marketing
The broadest level of marketing occurs when a company introduces product that nobody asked for and often could not even conceive of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman of Sony, who introduced these and many other new products, summarized his marketing philosophy in these words: “ I don’t serve markets. I create them.”
WHAT IS MARKET ?
A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.
WHAT IS MARKETING ?
Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably.
In other words, it is the process of understanding, creating, and delivering profitable value to targeted customers better than the competition.
WHAT IS MARKETING ?
Its aim is to establish, maintain, enhance long term relationship with customers at a profit so that the objectives of the parties involved are met.
In short marketing consists of attracting, developing, and retaining profitable customers.
BUSINESS IS MARKETING
Marketing can not be considered as a separate function , it is the whole business, seen from the point of view of its final results.................that is profit, through customer satisfaction
PETER DRUCKER
A SIMPLE MARKETING SYSTEM
Industry Market
Communication
Information/Feedback
Goods & Services
Money
Designing a Customer-Driven Marketing Strategy
Market segmentation refers to dividing the markets into segments of customers
Target marketing refers to which segments to go after
Selecting Customers to Serve
Designing a Customer-Driven Marketing Strategy
Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it
Selecting Customers to Serve
Designing a Customer-Driven Marketing Strategy
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
Marketing Management Orientations
(1) THE PRODUCTION CONCEPT
Consumers
Company
Produce more & more
Practically sells itself
Consumers will favor those products that are widely available and low in cost.
Therefore increase production and cut down costs.
And build profit through volume.
(2) THE PRODUCT CONCEPT
Consumers
Practically sells itself, if
it gives most quality for
money
Buyers admire well-made products and can appraise
product quality and performance.
Consumers will favor those products that offer the most quality, performance, or innovative features.
Therefore, improve quality, performance and features.
This would lead to increased sales and profits.
(3) SELLING CONCEPT
Consumers have normal tendency to resist.
Consumers
Aggressive selling &
promotion efforts
Making sales becomes primary function
and consumer satisfaction secondary .
Consumers , if left alone , will not buy enough of company’s products.
Therefore, promote sales aggressively.
Build profit through quick turnover.
(4) MARKETING CONCEPT
“ LOVE THE CUSTOMER , NOT THE PRODUCT ”
Consumers
Learn what they
want(MR)
Sell what they want(Satisfy
needs of customers)
The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.
And build profit through customer satisfaction and loyalty.
(5) THE SOCIETAL MARKETING CONCEPT
It is Marketing Concept (+) Society’s well being. Balancing of following three considerations while
setting marketing policies : Customer’s want satisfaction Society’s well being Company’s profits
The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well being.
It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.
Marketing Strategy
Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Marketing concept is the idea
that achieving organizational
goals depends on knowing the
needs and wants of the target
markets and delivering the
desired satisfactions better than
competitors do
Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Societal marketing concept
is the idea that a company
should make good marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long-term
interests, and society’s long-
run interests
Designing a Customer-Driven Marketing Strategy
Ansoff Matrix
The BCG Matrix Product Portfolio Method
Porter model for Competitive Forces
Preparing an Integrated Marketing Plan and Program
The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy. it includes product, price, promotion, and place.
Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.
The Marketing Environment
Microenvironment
Customers : individuals & households -Business Markets; Government Markets; -International Markets;
Competitors
Intermediates: Resellers transportation, warehousing, financing
Suppliers: supply problems that affect the marketing can be supply shortage, or delays, labor strikes , supply costs …etc
Public: comprises of consumers, labor unions, press & media, Govt. officials etc.
Macro environment
Demographic Environment: age, gender, income, religion
Economic Factors: Changes in Income, Changing customer spending patterns, Unemployment, Inflation
Political / Legal Factors: Governmental regulations & rules, Tax regime, Trade policies, Special interests
Technological Factors: forces that create new technologies, creating new products and opportunities, Examples mobiles; laptops, robotic surgery ..etc
Natural Factors: involves the natural resources needed as inputs by marketers and may affect marketing activities; as : Shortage of raw materials, Increased pollution, Energy Sources
Marketing Mix
The Marketing Mix
The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives
7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment
Traditional 4Ps extended to cope with today's changing environment
The Marketing Mix
Product
Product
The firm must come up with a product or service that people will want to buy.
It must fulfil some need
or want.
It must be (or at least seem) unique.
Product Variety
•Quality
•Design
•Brand name
•Packaging
•Services
•Warranties
Product Methods used to improve/differentiate
the product and increase sales or target sales more effectively to gain a competitive advantage e.g.
Extension strategies
Specialised versions
New editions
Improvements – real or otherwise!
Changed packaging
Technology, etc.
Product or service Core Product Actual Product Augmented
Product
CAR Transportation A motor car Finance
Availability
Hotel Accommodation Rooms Room service
Airline Transportation An air plane In flight
Entertainment
A Football Club Entertainment T-shirts – photos
with players
An Insurance Company Safety Insurance policy Online availability
Air Condition Cooling AC Warranty
Price
Price
Pricing Strategy
- International
Comparative
Cost plus
• The price must be one that the customer thinks is good value for money.
• This is not the same as
being cheap!
• Prices have a great psychological effect on customers.
•List Price
•Discounts
•Allowances
•Payment period
•Credit Terms
Price
Maximize short term profit
Maximize current market share
Market skimming
Product quality leadership
Survival
Place
Place
The means by which products and services get from producer to consumer and where they can be accessed by the consumer
The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?)
People
People
People represent the business
The image they present can be important
First contact often human – what is the lasting image they provide to the customer?
Extent of training and knowledge of the product/service concerned
Do staff represent the desired culture of the business?
People
People represent the business
The image they present can be important
First contact often human – what is the lasting image they provide to the customer?
Extent of training and knowledge of the product/service concerned
Mission statement – how relevant?
Do staff represent the desired culture of the business?
Process
Process
How do people consume services?
What processes do they have to go through to acquire the services?
Where do they find the availability of the service? Contact Reminders Registration Subscription Form filling Degree of technology
Physical Environment
Physical Environment
The ambience, mood or physical presentation of the environment
Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets,…..).
Brochures.
Furnishings.
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic headquarters).
Mailboxes and many others . . . . . .
Promotion
Promotion
Strategies to make the consumer aware of the existence of a product or service
NOT just advertising
1.Advertising
2.Sales Promotion
3.Public Relations
4.Personal Selling
5.Direct Marketing
Marketing communication MIX
1.Advertising Popular means of reaching a target audience. Cost effective way to build awareness. To create a good ad, the marketer must create a
message that is distinct, meaningful and credible. There are many advertising 'media' such as
newspapers, magazines and journals, television, cinema, outdoor advertising (such as posters, bus sides).
2. Sales Promotion Short term incentive to encourage customers to make a
purchase. There are many sales promotion types as :
a. Advertising Specialties: A product imprinted with a logo as mugs, T shirts..etc b. Cash Rebates: A partial refund to the buyer c. Discounting : reducing the listed price for a limited period of time d. Coupons e. Samples N.B Advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now
Marketing communication MIX
Marketing communication MIX
3. Public Relations Used to obtain favorable publicity, building good
corporate image and handling unfavorable rumors, stories and events
Influence the public beliefs, feelings and opinions about the company .
Mass promotion tool & cheap There are several types of public relations :
a. Written material as brochures, magazines, articles..etc b. Special Events as presentations, conferences c. Public Service Activities as donating money, volunteers or resources to activities designed to a social cause d. Speeches as giving talks
4. Personal Selling Personal presentation by the firm’s sales force for
the purpose of making sales & building customer relations
The sales message can be customized to meet the needs of the customer.
Involves 2 way personal communication as face-to-face, by telephone, through video or web conference.
Marketing communication MIX
Marketing communication MIX
5. Direct Marketing The Direct marketing is a type of advertising
campaign that seeks to elicit an action (such as an order, a visit to a store or Web site, or a request for further information) from a selected group of consumers in response to a communication from the marketer.
Types of direct marketing: Direct Mail Telemarketing Email Marketing Catalogs Websites
The promotional message should
Grab Attention
Stimulate Interest
Create Desire
Promote Action
The Marketing Analysis
SWOT analysis
It is a marketing analysis tool that involves monitoring the external and internal marketing environment.
Internal environment
Strength is something a firm does well or a characteristic that enhances its competitiveness.
Weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage
External environment
opportunity is a factor that the company may be able to exploit to its advantage.
Threat is current and emerging external factors that may challenge the company’s performance.
SWOT Build on your Strengths
Evaluate your Opportunities
Research your Threats
Recognize your Weakness
Identifying Market Segments and
Targets
Segmenting Consumer Markets
Geographic Segmentation Calls for dividing the market into geographical units such as nations, states, regions, countries, cities or neighborhoods
Demographic Segmentation Divides a market into groups based on variables as age, gender, family size, income, education, occupation, generation and nationality.
Psychographic Segmentation Divides buyers into different groups based on social class, lifestyle, or personality characteristics.
Behavioral Segmentation Divides buyers into groups based on their knowledge, attitudes, uses or responses to a product.
Segmenting International Markets
Companies can segment international markets using one or a combination of several variables, ex. Geographic location, grouping countries by region as Asia, Middle East or Western Europe.
•Geographic segmentation assumes that nations close to one another have common traits and behaviors, example: United States and Canada.
•World markets can be segmented on the basis of economic factors . Ex. Countries might be grouped by population income levels or overall level of economic development
Requirements for Effective Segmentation
Measurable
Accessible
Substantial
Differentiable
Actionable
Market Targeting
Evaluating Market Segments
Segment Size and Growth:
Segment Structural Attractiveness:
Company Objectives and Resources
Selecting Target Market Segments
Target Market Definition: consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Differentiation and Positioning
Differentiation: to be branded, products must be differentiated from competitors‟ ones. (size, shape or physical structure Features Performance quality, Durability, Reliability, Style
Dimensions of service differentiation: Ordering ease, Delivery, Installation, Customer Training, Maintenance and repair
Product Position : the place the product occupies in consumer's minds relative to competing products. A product must have a unique identity.
Toyota Yaris & Honda positioned as Economy Mercedes and Cadillac positioned as Luxury BMW & Porsche positioned as Performance
Marketing Plan
Importance of Marketing Plan
Forces the marketing personnel to look internally in order to fully understand the results of past marketing decisions.
Forces the marketing personnel to look externally in order to fully understand the market in which they operate.
Sets future goals and provides direction for future marketing efforts that everyone within the organization should understand and support.
Marketing plan is a key component in obtaining funding to pursue new initiatives.
Purpose of the Marketing Plan
Offer brief explanation for why this plan was produced
–e.g., introduce new product, enter new markets, continue growth of existing product, yearly review and planning document, etc.
Suggest what may be done with the information contained in the plan
–e.g., set targets to be achieved in the next year, represents a departmental report to be included in larger business or strategic plan, etc.
Marketing Plan Structure
Executive Summary Vision & Mission Statements –Pre defined Situation Analysis SWOT Analysis
Marketing Goals & Objectives Marketing Strategies (Market penetration, Market
development, Product development, Diversification)
Marketing Implementation (marketing activities) Budgeting Evaluation & Control (assessing and correcting
actions)
Marketing Myopia
What is Myopia
• Nearsightedness--not inherited. It can be prevented.
• Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants.
Marketing Myopia Today
Airline Industry
- IndiGo V/s Kingfisher
- Private carriers v/s National Carriers
Marketing Myopia Today
• Technology Industry
▫ More focused on the customer today than in 1960
▫ Apple
▫ E-commerce and E-Business ranked high in customer satisfaction report
“There is no such thing as a growth industry, what we have is growth opportunities.” -Theodore Levitt
Guarantee a Self-Deceiving Cycle
• Believe growth is guaranteed by an expanding population
• Believe there is no competitive substitutes
• Have too much faith in mass production
• Preoccupation with a product: focus on product instead of customer
Assured Growth by Expansion
• Belief that increases in population and affluence ensure growth
• Lack of innovation – A common characteristic
▫ Companies focus on efficiency, not innovation
• Petroleum industry
▫ A prime example of this fallacy
▫ Reinforces Levitt’s caution of myopically defining one’s industry
No Threat of Obsolescence
• The fallacy of believing competitive substitutes don’t exist
• Petroleum industry
▫ A history of obsolete products due to competitive substitutes
Kerosene Lamp
Kerosene Space Heater
Mass Production
• Lower product’s unit costs as output increases
• Focus on production, neglect marketing
• Selling is not marketing
• Focus on company’s needs, not customer’s needs
Henry Ford
Brilliant Marketer Senseless Marketer
• Created a product customer’s needed
• Created a product customer’s could afford
• Created production system to fit market needs
• Refused to make cars in any other color but black
Preoccupation with Product
• Industry declines instead of growing
• Example – Oil Companies
• Survival entails change
Creative Destruction
• When something new eliminates something old
• Must become innovative – reinvent business
• Must change business strategy to survive
Customer Relationships
Model of Consumer Decision Making
Stages in the Consumer Decision-Making Process
Relevant Internal Psychological Processes
External Factors Influencing the Consumer Buying Behavior
Culture
Social Class
Reference Group and Opinion Leader
Family
Building Customer Relationships
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Customer Relationship Management (CRM)
Building Customer Relationships Relationship Building Blocks: Customer Value and Satisfaction
Customer perceived value
• The difference between total customer value and total customer cost
Customer satisfaction
• The extent to which a product’s perceived performance matches a buyer’s expectations
Building Customer Relationships
Customer Relationship Levels and Tools
Basic Relationships
Full Partnerships
Building Customer Relationships
Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers
Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks
The Changing Nature of Customer Relationships
Building Customer Relationships
Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers
Building Customer Relationships
Partners inside the company is every function area interacting with customers
Electronically
Cross-functional teams
Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships
Partner Relationship Management
Building Customer Relationships
Supply chain is a channel that stretches from raw materials to components to final products to final buyers
Supply management
Strategic partners
Strategic alliances
Partner Relationship Management
Capturing Value from Customers
Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage
Creating Customer Loyalty and Retention
Capturing Value from Customers
Share of customer is the portion of the customer’s purchasing that a company gets in its product categories
Growing Share of Customer
Capturing Value from Customers
Customer equity is the total combined customer lifetime values of all of the company’s customers
Capturing Value from Customers
Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized
Different types of customers require different relationship management strategies
Build the right relationship with the right customers
Building Customer Equity
The New Marketing Landscape
Digital age Rapid
globalization
Ethics and social
responsibility
Not-for-profit marketing
Major Developments
So, What Is Marketing? Pulling It All Together
Customer Satisfaction and Customer Retention
Customer satisfaction is the key to customer retention
Fully satisfies customers are more likely to become loyal customers.
Customer satisfaction is a big challenge for marketers.
“It is no longer enough to satisfy customers. You must delight them.”-Philip Kotler
1 in 4 unhappy
Customers
switch
1 in 27 unhappy
customers
complain
5 times easier
and cheaper to
keep a
customer than
to have a new
one
The key question – “what business are
you in?”
Summary of Modern Marketing
Modern marketing is consumer oriented.
It begins and ends with Consumers.
It precedes & succeeds production.
It is competition oriented.
Its strategy is target marketing
The distribution policy under modern marketing is direct marketing and direct selling.
Modern marketing relies on information.
It emphasizes mutuality of benefit.
Business networks.
Emphasis on retaining customers
Marketing on the net.
Shifting from international to borderless world marketing.
Innovation.
Business Process Outsourcing.
Branding shifting values.
Conclusion
“Organizations must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.”
Theodore Levitt
Recommended