FOM LECTURE 1 - CORE CONCEPTS OF MAREKTING .ppt

Marketing: Managing Profitable Customer Relationships  Objectives Be able to define marketing and discuss its core concepts. Be able to define marketing management and compare the five marketing management orientations. 1-2  Objectives Understa...

Marketing: Managing Profitable Customer Relationships  Objectives Be able to define marketing and discuss its core concepts. Be able to define marketing management and compare the five marketing management orientations. 1-2  Objectives Understand customer relationship management and strategies. Provide exposure to marketing mix variables and some marketing functions 1-3 Core Marketing Concepts 1-4  CORE MARKETING CONCEPTS NEED WANTS A state of felt The form that a human deprivation need takes as shaped Eg. Physical needs – by culture and clothing, food, safety individual personality Social needs – OR a desire directed belonging, affection to specific objects that Individual needs – might satisfy a need knowledge, self Eg. Hilfiger shirt, KFC, expression Massage Service, Maslows Hierarchy of Oxford University needs Education etc. 1-5  CORE MARKETING CONCEPTS DEMAND Human wants backed by ability and willingness to pay (buying power) I.e ( I have the money and I am willing to spend it on this item) 1-6  CORE MARKETING CONCEPTS MARKETING MARKETING OFFERS OFFERS Some combination More broadly it of products, include: services, Places, persons, information or organisations, ideas experiences and information offered to a market Also referred to as to satisfy a need or non traditional want marketing 1-7 What Can Be Marketed? Goods Services Places Ideas Events Persons Properties Organizations Information Experiences What is being marketed in this ad? 1-8  CORE MARKETING CONCEPTS PRODUCTS Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a need or want SERVICES Activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Eg. Air travel, hotel, theatre 1-9  CORE MARKETING CONCEPTS CUSTOMER CUSTOMER VALUE SATISFACTION The difference The extent to between the which a products benefit (utility) the perceived customer gains performance from owning and matches a buyers using a product expectation and the cost of Satisfied/Dis- obtaining the satisfied/Delighted product 1 - 10  CORE MARKETING CONCEPTS EXCHANGE RELATIONSHIP The act of obtaining Actions taken to a desired object from build and maintain someone by offering desirable exchange something in return relationships with TRANSACTION valued customers involving a A trade of values product, service, between two parties idea or other object Marketing’s unit of Marketing Networks measurement 1 - 11  CORE MARKETING CONCEPTS MARKETS A set of actual and potential buyers who share a particular need or want that can be satisfied through an exchange or relationship 1 - 12 What is Marketing? Marketing is managing profitable customer relationships  Attracting new customers  Retaining and growing current customers “Marketing” is NOT synonymous with “sales” or “advertising” 1 - 13  What is Marketing? Kotler’s social definition: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” 1 - 14 Marketing Management Marketing management is “the art and science of choosing target markets and building profitable relationships with them.”  Creating, delivering and communicating superior customer value is key. 1 - 15 Marketing Management Customer Management:  Marketers select customers that can be served well and profitably. Demand Management:  Marketers must deal with different demand states, ranging from no demand to too much demand. 1 - 16 Marketing Management Production Management Product Concept Orientations Concept Selling Marketing Concept Concept Societal Marketing Concept 1 - 17 MARKETING ORIENTATIONS PRODUCTION PRODUCT Consumers will Consumers will favour products that favour products that offer the most quality, are widely available performance and and affordable innovative features Management should Management should focus on improving focus on making production and superior products and distribution efficiency continuous improvements 1 - 18 MARKETING ORIENTATIONS SELLING MARKETING Consumers will Achieving not buy enough organisational goals depends on of an organi- determining the sation’s needs and wants of products unless target markets and the organisation delivering the aggressively desired satisfactions promotes/sells more efficiently than competitors do these products 1 - 19 MARKETING ORIENTATIONS SOCIETAL MARKETING CONCEPT Achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more efficiently than competitors in a way that maintains or improves the customer’s and society’s well-being 1 - 20 Considerations Underlying the Societal Marketing Concept 1 - 21  CRM Customer relationship management (also called CRM) is defined as: “the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.” 1 - 22  CRM It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied. Marketers must be concerned with the lifetime value of the customer. 1 - 23  CRM Customer value and Key Concepts satisfaction  Perceptions are key  Created by meeting/ Attracting, exceeding expectations Loyalty and retention retaining and  Many benefits of loyalty growing  Increases as satisfaction levels increase customers  Delighting consumers should be the goal Growing customer share  Cross-selling 1 - 24  CRM Key Concepts Customer equity  Total combined Building customer lifetime relationships values of all and customer customers  Measures firm’s equity performance, but in a manner that looks to the future 1 - 25  CRM Customer relationship Key Concepts levels and tools  Customer loyalty and Building retention programs relationships  Adding financial benefits and customer  Adding social benefits equity  Adding structural ties 1 - 26  MARKETING MIX A set of controllable tactical marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market This is also referred to as the 4Ps Or from the customers standpoint, the 4Cs Customer solution, cost, convenience, communication 1 - 27  MARKETING MIX PRODUCT/CUSTOMER SOLUTION – the goods-and-services combination the company offers to the target market Variety Sizes Quality Design Features Brand name Packaging Services Returns Warranties 1 - 28  MARKETING MIX PRICE/COST – the amount of money the customers have to pay to obtain the product List price Discounts Allowances Payment period Credit terms 1 - 29  MARKETING MIX PLACE/CONVENIENCE – includes company activities to make the product available to target customers Channels Coverage Assortments Locations Logistics – warehouse, inventory, transportation 1 - 30  MARKETING MIX PROMOTION/COMMUNICATION – activities that communicate the merits of the product and persuade target customers to buy it These activities include:  Advertising  Personal selling  Sales promotion  Public relations  Direct marketing 1 - 31  MARKETING FUNCTIONS Marketing Planning Advertising and sales Marketing research promotion Marketing Sales and distribution information/ Product/Service intelligence analysis development Environmental Marketing HR Analysis development Marketing Procurement administration and Negotiations & Stake- support holder relationship Pricing management 1 - 32  WHAT’S NEXT! TUTORIAL: Review concepts – prepare tutorial week 1 questions, case application LECTURE: MARKETING ENVIRONMENT 1 - 33