Marketing Fundamentals

Course Structure

• The course covers syllabus introduction to marketing, company & marketing strategy, the green marketing environment, consumer market & sustainable consumer behavior, customer-driven marketing strategy like market segmentation, targeting, differentiation, and positioning.
• Midterm exams will be conducted.
• The course also includes product, service and brand strategy, pricing strategy, marketing channels, communicating customer value through integrated marketing, direct & online marketing and sustainable marketing

Learning Outcomes

• Understand marketing fundamentals, environmental impact, core concepts like segmentation, targeting and the 4 P's.
• Understand social responsibility + ethics and ability to work collaboratively.

Assessment

• Quiz 1 is 10% of the grade and is a short test on material.
• There is an individual written assignment that is also 10% and is on CSR and ethics.
• The midterm exam is 25% and includes multiple choice, true/false and short essay questions.
• A group report is 20% of the grade, where students are project assigned involving marketing, and requires a presentation at the semester's end.
• A presentation on the marketing plan is 5% and consists of individual marks.
• The final exam is 30% and includes multiple choice, true/false, short esssays etc

Common Marketing Misconceptions

• Marketing is more than just selling.
• Marketing careers aren't limited to sales.
• Achieving marketing goals does not require door knocking.

Marketing Myths

• Advertising and marketing are the same.
• Selling is marketing.
• Sales personnel aren't really a part of marketing.
• First-mover advantage guarantees market leadership.

Marketing Defined

• Marketing is the process of creating, distributing, promoting, and pricing offerings to facilitate satisfying exchange relationships in a dynamic environment.
• Marketing includes more activities than commonly perceived.

Importance of Marketing

• It's the only revenue-producing activity for a firm.
• Marketing costs can represent 50% of corporate costs but are now seen as an investment.
• Studying marketing makes one a better-informed customer, consumers are exposed to 3000+ commercial messages daily.

Marketing Definitions

• AMA: It is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals
• Peter Drucker: Goal is to make selling superfluous by understanding the customer so well that the product/service fits needs and sells itself.
• CIM: It is the management process responsible for identifying, anticipating & satisfying customer requirements profitably.
• Marketing: a social & managerial process where in individuals and groups obtain what they need and want

Marketing Definition

• Companies create value for customers and build strong relationships to capture value in return.
• Marketing manages profitable customer relationships.
• The dual marketing goal attracts new customers with superior value; delivering satisfaction.

Marketing Defined (Continued)

• The marketing process starts with the customer.
• The process has to define what satisfies existing and potential customer needs.
• Types of customers: individual consumers, households/families, businesses, governments, and other organizations.

Marketing Management

• Marketing management is the art and science of targeting markets and building profitable relationships.
• There are five marketing steps.

5-Step Marketing Process

• Understand the marketplace and customer needs/wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program that delivers superior value.
• Build profitable relationships for customer delight.
• Capture value from customers in return.

Step 1: Understand the Market Place and Customer Needs

• Need - is a basic human requirement or deprivation.
• Want - a specific object that satisfies a need like wanting a Big Mac when one needs food.
• Demands - wants backed by an ability to pay.
• Value includes functional and emotional benefits versus monetary, temporal, energy and psychic costs.
• Market place- the set of actual and potential buyers of a product or service

Step 2: Designing a Customer Driven Marketing Strategy

• It involves selecting customers to serve.
• It means choosing a value proposition.
• The step includes Marketing Management Orientation

Evolution of Marketing

• Marketing evolved through production, product, selling, marketing and societal marketing concepts.

Production Orientation

• Assumes that consumers will buy if product is available and affordable.
• The focus is on efficiency, works when demand exceeds supply.
• Scientific Management was started by Fredric Taylor.
• Ford Model T an example.

Product Orientation

• It assumes consumers favor the highest quality product, but risks focusing too much on the product, not on customer needs.
• It trusts engineers to develop exceptional products, e.g., a better mouse trap.
• An example is Kodak films

Selling Orientation

• Aims to persuade customers to buy a product.
• This is internally focused on selling what can be produced and not creating new things that can sell to the consumer.
• One example is selling insurance policies

Marketing Concept

• Emerged in the mid-1950s, challenging earlier concepts.
• "Sense and respond" philosophy, providing what the customer wants.
• Focus is on effectively creating, delivering, and communicating superior customer value to target markets.

Marketing Concept: Key Elements

• Marketing orientation determines customer needs/wants and delivers products to satisfy them.
• External focus on customer needs.
• Focus on customer need begins with the basic question: What business are we in?
• Aim is customer satisfaction

Recent Marketing Refinements

• Quality is now defined by customers; TQM (Total Quality Management) is implemented.
• Focus to build personal, long-term bonds with customers.
• Lexus achieves 90% loyalty vs 50% average with superior customer satisfaction and service.

Recent Refinements

• Mass customization provides affordable, tailored products through advances in I.T.
• Value Creation - is a balance of what we get versus what we give up; which can involve more than money, and is unique to each individual.
• Internal marketing precedes external efforts, ensuring a customer-oriented company.

Societal Marketing Concept

• Extends marketing to consider social responsibility and ethical concerns.
• Companies must balance profits, customer needs, satisfaction, and social responsibility.
• Long-term customer satisfaction needs to be involved.
• Examples include B.P., Ben & Jerry's philanthropy and The Body Shop that sells bio-degradable bags

Organization Task

• To determine the needs, wants, and the interest of the target market and 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.
• Businesses balance company profits, consumer satisfaction, and public interest.

3 -Integrated Marketing

• The marketing program delivers intended customer value through the 4 P's.

The 4 P's of Marketing Mix

• Product: Variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns.
• Price: List price, discounts, allowances, payment period, credit items.
• Place: Channels, coverage, locations, inventory, transport.
• Promotion: Sales promotion, advertising, public relations, direct marketing.

Building Customer Relationships

• Customer relationships are a business's lifeblood
• Organizational achievement (Profitability) comes from acquiring/retaining/extending customer relationships.
• CRM is building/maintaining profitable relationships by delivering superior customer value and satisfaction.
• Customer satisfaction means when products meet of exceed buyer expectations.
• Includes customer/consumer managed relationships

Customer Satisfaction and Loyalty

• Unhappy Customers: 96% never complain.
• Negative Word of Mouth: Each unhappy customer tells 15-30 others, compared to 6 by happy customers.
• Complaint Handling: 95% of customers with efficiently handled complaints become more brand loyal.
• Cost of Acquisition: Recruiting a new customer is ten times more expensive than keeping an existing one.

Relationship Marketing

• Creates long-term, mutually beneficial arrangements through value enhancement and improved exchanges.
• Aims to generate deeper trust, increased confidence, better understanding and solid relationships through cooperation and mutal dependency

Capturing Value

• Customer lifetime value is purchases that the customer would make over a lifetime.
• Customer equity is the total combined customer lifetime value of all of the company's customers.

Customer Relationship Management (CRM)

• Uses data to develop/sustain desirable customer relationships.
• Retain their customer base, and increase long-term profitability through customer loyalty/repeat purchases.

Modern Marketing

• It consume Buyers' dollars.
• It is Used in non-profits/important for business.
• Fuels Economies/Enhances awareness
• Connects through tech and Promotes welfare
• Exciting career prospects.

Marketing Context

• During Economic recession
• In the era of globalization
• Growth of non profit sectors

Next Lecture

• The following lecture is on Company and Marketing Strategy to build customer relationships.