Marketing Lesson 2: Principles of Marketing

Marketing Lesson 2 Chapter 1: Marketing: Creating Customer Value and Engagement  Creating and capturing customer value Topic outline What is marketing? Understand the marketplace and customer needs Designing a customer-driven marketing s...

Marketing Lesson 2 Chapter 1: Marketing: Creating Customer Value and Engagement  Creating and capturing customer value Topic outline What is marketing? Understand the marketplace and customer needs Designing a customer-driven marketing strategy Preparing an integrated marketing plan and program Building customer relationships Capturing value from customers The changing marketing landscape Copyright © 2021 Pearson Education Ltd.  What is marketing?  Marketing is engaging customers and managing profitable customer relationships  Marketing is delighting a consumer, customer to achieve a profit or other pre-established goal. Copyright © 2021 Pearson Education Ltd.  What is marketing?  Marketing is the process by which companies engage customers, build strong relationships and create customer value and capture value from customers in return. Copyright © 2021 Pearson Education Ltd. What Is Marketing? Marketing is all around you, in good old traditional forms and in a host of new forms, from websites and mobile apps to online videos and social media. Copyright © 2021 Pearson Education Ltd.  What is immediately associated with Marketing?  Think about your favourite brand? What does it do for you? What is the emotional connection? What value does it give you? Copyright © 2021 Pearson Education Ltd. Think about your favourite brand? Think about it for 2 minutes 3 words it means to you Copyright © 2021 Pearson Education Ltd. Figure 1.1 The Marketing Process: Creating and Capturing Customer Value Copyright © 2021 Pearson Education Ltd.  Creating and capturing customer value Topic outline What is marketing? Understand the marketplace and customer needs Designing a customer-driven marketing strategy Preparing an integrated marketing plan and program Building customer relationships Capturing value from customers The changing marketing landscape Copyright © 2021 Pearson Education Ltd. Understanding the Marketplace and Customer Needs (1 of 5) Needs are states of felt deprivation. Wants are the form human needs take as they are shaped by culture and individual personality. Demands are human wants that are backed by buying power. Staying close to customers: Airbnb’s CEO Brian Chesky and co-founder Joe Gebbia Copyright © 2021 Pearson Education Ltd. Customer needs, wants and demands States of deprivation Needs Physical—food, clothing, warmth and safety Social—belonging and affection Individual—knowledge and self-expression Wants Form that needs take as they are shaped by culture and individual personality Demands Wants backed by buying power Copyright © 2021 Pearson Education Ltd.  Copyright © 2021 Pearson Education Ltd. Source: https://www.labfluentconsulting.com/new-blog/abraham-maslows-hierarchy-of-needs  Difference between wants and demands The main difference between wants and demands is that wants are the desires and preferences of consumers, while demands are wants that are backed by the ability and willingness to make a purchase.  Difference between wants and demands Example: Need: Food (basic physical need) Want: Spaghetti (shaped by individual culture & personality) Demand: organic pasta (consumer values health and sustainability + is willing to pay a premium for it. Understanding the Marketplace and Customer Needs (2 of 5) Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing myopia—paying more attention to the specific products than to the benefits and experiences produced Copyright © 2021 Pearson Education Ltd.  Exercise Can you give a good example of a brand, product (service) offering a total experience? How? – First individually (5’) – Then in pairs (5’) – Feedback Copyright © 2021 Pearson Education Ltd. Mahali Mzuri: An Immersive Experience at the World’s Number-One Hotel Marketing experiences: When it comes to delivering unforgettable experiences, few travel and hospitality businesses can match Kenya’s Mahali Mzuri safari camp, recently named by Travel + Leisure magazine as the “#1 hotel in the world.” Adam Slama Copyright © 2021 Pearson Education Ltd. Understanding the Marketplace and Customer Needs (2 of 5) Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing myopia—paying more attention to the specific products than to the benefits and experiences produced Copyright © 2021 Pearson Education Ltd. Slide 1.42 13/10/14 42 Inleiding Kotler etinal., Marketing Principles of AJ1415 Marketing,-6IthDermaux edition © Pearson Education Limited 2013 Understanding the Marketplace and Customer Needs (3 of 5) Customers form expectations about the value and satisfaction of market offerings. – Satisfied customers buy again – Dissatisfied customers switch to competitors Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing actions try to create, maintain, and grow desirable exchange relationships. Copyright © 2021 Pearson Education Ltd. Understanding the Marketplace and Customer Needs (4 of 5) A market is the set of actual and potential buyers. Consumers market when they: search for products interact with companies to obtain information make purchases Copyright © 2021 Pearson Education Ltd. Understanding the Marketplace and Customer Needs (5 of 5) Figure 1.2 A Modern Marketing System Copyright © 2021 Pearson Education Ltd. Figure 1.1 The Marketing Process: Creating and Capturing Customer Value Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (1 of 6) Marketing management is the art and science of choosing target markets and building profitable relationships with them. What customers will we serve (target market)? How can we best serve these customers (value proposition)? Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (2 of 6) A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Value propositions: Sonos positions its Sonos One with Amazon Alexa as “The smart speaker for music lovers.” It gives you all the advantages of Alexa but with high-quality Sonos sound. Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (3 of 6) Production concept Product concept Selling concept Marketing concept Societal Marketing concept Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (4 of 6) Figure 1.3 Selling and Marketing Concepts Contrasted Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (5 of 6) Societal marketing: The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Figure 1.4 Three Considerations Underlying the Societal Marketing Concept Copyright © 2021 Pearson Education Ltd. Triple Bottom Line – J. Elkington https://www.researchgate.net/figure/The-interconnection-of-the-elements-of-the-Triple-Bottom-Line-concept_fig1_329185478 Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Patagonia’s billionaire owner gives away company to fight climate crisis | US news |Copyright The Guardian © 2021 Pearson Education Ltd. https://www.youtube.com/watch?v=9Lwvpu57IDU Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd.  Kate Raworth https://doughnuteconomics.org/tools/20 Copyright © 2021 Pearson Education Ltd. Strong statements about sustainability Who do you believe as a consumer ? Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Woke-washing is a term used to define practices in business that provide the appearance of social consciousness without any of the substance. A woke-washed business could theoretically promote the opposite of racial equality within its walls while championing causes of social justice to the outside world. https://www.forbes.com/ Copyright © 2021 Pearson Education Ltd. Example from 5+ year ago Example from 5+ year ago  Time For Some Teamwork Find 1 brand that you believe has a sincere Societal Marketing approach or 1 brand that you think is engaging in greenwashing or woke-washing Deliverable = 1 minute verbal explanation of your thoughts Timing = 15 minutes including the break No Right or wrong answer Copyright © 2021 Pearson Education Ltd. Designing a Customer Value-Driven Marketing Strategy (6 of 6) The marketing mix is comprised of a set of tools known a the four Ps: product price promotion place Integrated marketing program—a comprehensive plan that communicates and delivers intended value Copyright © 2021 Pearson Education Ltd. Source: https://blog.oxfordcollegeofmarketing.com/2020/10/08/understanding-the-7ps-of-the-marketing-mix/ Copyright © 2021 Pearson Education Ltd. Source: https://blog.oxfordcollegeofmarketing.com/2020/10/08/understanding-the-7ps-of-the-marketing-mix/ Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (1 of 9) Customer relationship management—the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (2 of 9) Relationship Building Blocks Customer-perceived value – The difference between total customer perceived benefits and customer cost Customer satisfaction – The extent to which perceived performance matches a buyer’s expectations Perceived value: Some owners consider a Patek Philippe watch a real bargain, even at prices ranging from $20,000 to $1,000,000 or more. “You never actually own a Patek Philippe. You merely look after it for the next generation.” Courtesy of Patek Philippe Geneva Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (3 of 9) Customer-Engagement Marketing Fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community. Engaging customers: Rather than using intrusive, hard-sell product pitches, Innocent Drinks interacts with customers in humorous ways, inspiring conversations and fostering relationships. Martin Lee/Alamy Stock Photo Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (4 of 9) Consumer-Generated Marketing Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences. Customer-generated content: Heinz invited people across five continents The Kraft Heinz Company to “draw ketchup.” Most drew Heinz. Many of the sketchers and their sketches—both sophisticated and amateurish— were featured in an online video and on digital billboards. Copyright © 2021 Pearson Education Ltd. Very old commercial Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (5 of 9) Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Relationship marketing tools: The American Airlines AAdvantage program promotes customer loyalty through numerous membership benefits. At the same time, it allows American to profit from multiple revenue streams. Ian Dagnall/Alamy Stock Photo Copyright © 2021 Pearson Education Ltd. Managing Customer Relationships and Capturing Customer Value (6 of 9) Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Customer lifetime value: To keep customers coming back, Stew Leonard’s has created the “Disneyland of dairy stores.” Rule #1—The customer is always right. Rule #2—If the customer is ever wrong, reread Rule #1. Copyright © 2021 Pearson Education Ltd. The Changing Marketing Landscape (1 of 5) Digital Age Changing Economic Environment Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing Copyright © 2021 Pearson Education Ltd. The Changing Marketing Landscape (2 of 5) We live in the age of Internet of Things, where everything is connected to everything else. Digital and social media marketing involves using digital marketing tools such as websites, social media, mobile ads and apps, online videos, email, and blogs that engage consumers anywhere, at any time, via their digital devices. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. https://www.google.com/url?sa=i&url=https%3A%2F%2Fstudiousguy.com%2Fexamples-internet-of-things Copyright © 2021 Pearson Education Ltd. Internet of Things Copyright © 2021 Pearson Education Ltd. Internet of Things Copyright © 2021 Pearson Education Ltd. Internet of Things Copyright © 2021 Pearson Education Ltd. Internet of Things Copyright © 2021 Pearson Education Ltd. The Changing Marketing Landscape (3 of 5) Social media provide exciting opportunities to extend customer engagement and get people talking about a brand. Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience. Big Data and AI: Brands can use big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. The Changing Marketing Landscape (4 of 5) Not-for-profit marketing is growing, as sound marketing can help organizations attract membership, funds, and support. Copyright © 2021 Pearson Education Ltd. The Changing Marketing Landscape (5 of 5) Rapid Globalization: Managers around the world are taking both local and global views of the company’s: – Industry – Competitors – Opportunities Sustainable Marketing: Corporate ethics and social responsibility have become important for every business. Copyright © 2021 Pearson Education Ltd. So, What Is Marketing? Pulling It All Together Figure 1.6 An Expanded Model of the Marketing Process Copyright © 2021 Pearson Education Ltd.