Principles Of Marketing PDF

PRINCIPLES OF MARKETING MKT1034 /MKT1014/ MKT2224 WEEK 1 – LECTURE 1 These teaching materials are protected under the Copyright Act 1987. Duplication, in any form, including digitally, is prohibited by law...

PRINCIPLES OF MARKETING MKT1034 /MKT1014/ MKT2224 WEEK 1 – LECTURE 1 These teaching materials are protected under the Copyright Act 1987. Duplication, in any form, including digitally, is prohibited by law and a punishable offence. ©2021 Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Principles of Marketing Eighteenth Edition Chapter 1 Marketing: Creating Customer Value and Engagement Copyright © 2021, 2018, 2016 Pearson Education, Inc. Learning Objectives 1.1 Define marketing and outline the steps in the marketing process. 1.2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. 1.3 Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 1.4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 1.5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2021, 2018, 2016 Pearson Education, Inc. First Stop: Amazon Amazon does much more than just sell goods online. It engages customers and creates satisfying customer experiences. “The thing that drives everything is creating genuine value for customers,” says Amazon founder Jeff Bezos. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 1 Define marketing and outline the steps in the marketing process. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc.  What is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Copyright © 2021, 2018, 2016 Pearson Education, Inc. What is Marketing? Copyright © 2021, 2018, 2016 Pearson Education, Inc.  8 Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Figure 1.1 The Marketing Process: Creating and Capturing Customer Value Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Understanding the Marketplace and Customer Needs 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. Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Understanding the Marketplace and Customer Needs 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. Customers form expectations about the value and satisfaction of market offerings. Satisfied customers buy again Dissatisfied customers switch to competitors Copyright © 2021, 2018, 2016 Pearson Education, Inc. Understanding the Marketplace and Customer Needs A market is set of actual and potential buyers. Consumers market when they: search for products interact with companies to obtain information make purchases Copyright © 2021, 2018, 2016 Pearson Education, Inc. Understanding the Marketplace and Customer Needs Figure 1.2 A Modern Marketing System Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 1 Which of the following is NOT an accurate description of modern marketing? A) Marketing is the creation of value for customers. B) Marketing involves managing profitable customer relationships. C) Marketing emphasizes selling and advertising exclusively. D) Marketing involves satisfying customers' needs. E) Marketing is building value-laden exchange relationships with customers. A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 2 When backed by buying power, wants become ________. A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 3 A ________ is some combination of products, services, information, or experiences provided to consumers to satisfy a need or want. A) market offering B) value proposition C) brand positioning D) market segment E) market mix A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 4 Which of the following terms refers to sellers being preoccupied with their own products and losing sight of underlying consumer needs? A) vendor lock-in B) social loafing C) value proposition D) marketing myopia E) conspicuous consumption A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 5 A(n) ________ is the set of actual and potential buyers of a product or service. A) market B) control group C) subsidiary D) focus group E) audience A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 3 Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Designing a Customer Value-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 (target market)? How can we best serve these customers (value proposition)? Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing a Customer Value-Driven Marketing Strategy A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Brand’s value proposition Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing a Customer Value-Driven Marketing Strategy Production concept Product concept Selling concept Marketing concept Societal Marketing concept Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Marketing Management Orientations Production Orientation Products that are available and highly affordable Product Orientation Products that offer the most quality, performance, and features Selling Orientation Firm undertakes a large-scale selling and promotion effort Marketing Orientation Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors Societal Marketing Orientation Overall well-being Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing a Customer Value-Driven Marketing Strategy Figure 1.3 Selling and Marketing Concepts Contrasted Copyright © 2021, 2018, 2016 Pearson Education, Inc. Designing a Customer Value-Driven Marketing Strategy 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, 2018, 2016 Pearson Education, Inc. Designing a Customer Value-Driven Marketing Strategy 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, 2018, 2016 Pearson Education, Inc. Question 1 The art and science of choosing target markets and building profitable relationships with them is called ________. A) marketing management B) positioning C) marketing mix D) market offering E) differentiation A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 2 Which of the following marketing management orientations focuses primarily on improving efficiencies along the supply chain? A) production concept B) product concept C) selling concept D) marketing concept E) societal marketing concept A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 3 Which of the following marketing management concepts is most likely to lead to marketing myopia? A) customer-driven marketing concept B) customer-driving marketing concept C) societal marketing concept D) marketing concept E) product concept A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 4 Which of the following refers to a set of benefits that a company promises to deliver to customers to satisfy their needs? A) customer lock-in B) a cartel C) marketing mix D) value proposition E) market segmentation A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. End of Chapter 1 Part – 1 ✓1.1 Define marketing and outline the steps in the marketing process. ✓1.2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. ✓1.3 Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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, 2018, 2016 Pearson Education, Inc. 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 Customer satisfaction: Customer service champion L.L.Bean was founded on a philosophy of complete customer satisfaction. “If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund.” Copyright © 2021, 2018, 2016 Pearson Education, Inc.  48 Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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, Bark interacts with customers in humorous ways about their favorite mutual topic—“the weird dogs we live with and the funny things they do.” Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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. Consumer-generated marketing: “Charmingly low-budget” fanmade Tesla ads drew millions of online views and sparked interactions among dedicated Tesla fans. Copyright © 2021, 2018, 2016 Pearson Education, Inc. https://www.youtube.com/watch?v=hqtk5RU2- _Q&ab_channel=WOAMiniBricks Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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. Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  59 Copyright © 2021, 2018, 2016 Pearson Education, Inc. https://www.youtube.com/watch?v=Ibtwp52lpCU&ab_channel=MILOMalaysia Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing Customer Relationships and Capturing Customer Value (7 of 9) Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing Customer Relationships and Capturing Customer Value (8 of 9) Customer equity is the total combined customer lifetime values of all of the company’s customers. Managing customer equity: To increase customer equity, Cadillac is making the classic car cool again among younger buyers. For example, says GM, “Cadillac will lead the company to an all-electric future.” Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Managing Customer Relationships and Capturing Customer Value (9 of 9) Figure 1.5 Customer Relationship Groups Copyright © 2021, 2018, 2016 Pearson Education, Inc. Customer Relationship Groups Strangers show low potential profitability and little projected loyalty. Butterflies are potentially profitable but not loyal. True friends are both profitable and loyal. Barnacles are highly loyal but not very profitable. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  Learning Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. The Changing Marketing Landscape (1 of 5) Changing Economic Environment Digital Age Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing Copyright © 2021, 2018, 2016 Pearson Education, Inc. Changing Economic Environment - The pandemic has caused economic downturn. - Reduced overall consumer spending - Recession Our Vision: To be a World Class University Copyright © 2021, 2018, 2016 Pearson Education, Inc. The Changing Marketing Landscape (2 of 5) Digital Age 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, 2018, 2016 Pearson Education, Inc. 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, 2018, 2016 Pearson Education, Inc. 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, 2018, 2016 Pearson Education, Inc. Not-for-profit Marketing 74 Copyright © 2021, 2018, 2016 Pearson Education, Inc. 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, 2018, 2016 Pearson Education, Inc. Copyright © 2021, 2018, 2016 Pearson Education, Inc.  77 Copyright © 2021, 2018, 2016 Pearson Education, Inc. So, What Is Marketing? Pulling It All Together Figure 1.6 An Expanded Model of the Marketing Process Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 1 Which of the following statements is true about creating customer loyalty and retention? A) Losing a customer means losing the entire stream of purchases that the customer would make over a lifetime of patronage. B) Customer delight creates a rational preference and not an emotional relationship with the brand. C) The aim of customer relationship management is to focus solely on customer delight. D) Losing a customer hardly makes a difference to a company's sales. E) The aim of customer relationship management is to focus solely on customer satisfaction. A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 2 FedEx offers its customers fast and reliable package delivery. When FedEx customers weigh these benefits against the monetary cost of using FedEx along with other costs of using the service, they are acting upon ________. A) brand loyalty B) customer equity C) customer-perceived value D) customer lifetime value E) a societal marketing campaign A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. Question 3 The portion of the customer's purchasing that a company gets in its product categories is known as ________. A) customer-perceived value B) share of customer C) customer insight D) consumption function E) induced consumption A C E B D Copyright © 2021, 2018, 2016 Pearson Education, Inc. End of Chapter 1 Part – 2 ✓1.4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. ✓1.5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2021, 2018, 2016 Pearson Education, Inc. Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2021, 2018, 2016 Pearson Education, Inc.