Principals of Marketing PDF

# Principals of Marketing ## INTERNATIONAL HIGHER INSTITUTE ### Marketing: Creating and Capturing Customer Value Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return. Marketing is a comprehensive p...

# Principals of Marketing ## INTERNATIONAL HIGHER INSTITUTE ### Marketing: Creating and Capturing Customer Value Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return. Marketing is a comprehensive process that aims to discover the needs and desires of customers, then develop products or services that meet those needs, and then present them in a way that attracts customers and motivates them to buy. Thus, marketing is a way to achieve an organization's goals, whether those goals are making profits or building a strong relationship with customers. ### Marketing Defined Marketing products is a comprehensive process to discover customer needs, develop services, and attract customers. ### Main Marketing Objectives - **Understanding Customers:** Knowing who your customers are, what their needs are, and what value they are looking for. - **Brand Building:** Create a positive mental image of your products or services in the minds of customers. - **Increase Sales:** Achieve the highest possible level of sales by attracting new customers and retaining existing ones. - **Profitability:** Achieve a good return on investment on the money invested in marketing. - **Stay Competitive:** Outperform competitors by delivering more value to customers. ### Elements of the Marketing Process - **Market Study:** Understanding the business environment, analyzing competitors, and identifying opportunities. - **Product Development:** Designing products or services that meet customer needs and outperform competitors. - **Price Determination:** Setting an appropriate price for the product or service so that it attracts customers and makes profits. - **Promotion:** Using various marketing channels to communicate with customers and convince them to buy the product. - **Distribution:** Provide the product to customers in the right place and time. ### Understanding the Marketplace and Customer Needs Customers have needs, wants, and demands. Understanding them is key to delivering value. #### Needs - **Physical:** food, clothing, warmth, 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 ### Market Offerings: Products, Services, and Experiences Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy its needs or wants. ### Customer Value and Satisfaction Customer value and satisfaction are the core of strong customer relationships. * **Customers** * Value and satisfaction * **Marketers** * Set the right level of expectations * Not too high or low ### Exchanges and Relationships Exchange is obtaining a desired object by offering something in return. Relationships build loyalty. * **Marketers** aim to build strong relationships by consistently delivering superior customer value. * **A market is the set of actual and potential buyers of a product.** ### 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 Management Process Marketing management is a comprehensive process that aims to plan, organize, implement, and monitor all activities related to the delivery of a product or service to the target market. It includes a set of tools and techniques aimed at understanding the needs and desires of customers, building strong relationships with them, and achieving the organization's goals by increasing sales and making profits. ### Elements of the Marketing Management Process - **Marketing Research:** Collection and analysis of data related to customers, market, and competitors. - **Product Development:** Designing products or services that meet customer needs and outperform competitors. - **Price Determination:** Setting an appropriate price for the product or service so that it attracts customers and makes profits. - **Promotion:** Using various marketing channels to communicate with customers and convince them to buy the product. - **Distribution:** Provide the product to customers in the right place and time. - **Customer Relations:** Building strong customer relationships through excellent customer service and listening to their opinions. ### Importance of Marketing Management - **Growth:** Marketing management helps companies grow and expand in the market. - **Survival:** It helps companies stay competitive and overcome challenges. - **Profitability:** Contributes to higher profits for the company. - **Customer Satisfaction:** Helps build strong relationships with customers and increase their loyalty. ### Selecting Customers to Serve Market segmentation and targeting help select the right customers to serve. - **Market segmentation** refers to dividing the markets into segments of customers. - **Target marketing** refers to which segments to go after. - **Demarketing** is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it. ### Choosing a Value Proposition * **Value Proposition:** The heart of any successful marketing * **The value proposition** is the set of benefits or values a company promises to deliver to customers to satisfy their needs. * **A value proposition** is a clear and statement that explains the specific benefits that a product or service offers to its customers, and how that product or service differs from its competitors. In other words, it is the compelling reason that drives the customer to choose your product or service over others. ### Marketing Management Orientations - **Production Orientation (concept)**: is the idea that consumers will favor products that are available and highly affordable. * **Focus:** On producing as much product as possible, assuming that consumers will accept anything produced. * **Limitations:** This approach may not work in competitive markets where consumers are interested in product quality and meeting their needs. - **Product Orientation (concept)**: * **Product concept** is the idea that consumers will favor products that offer the most quality, performance, and features. An organization should therefore devote its energy to making continuous product improvements. * **Focus:** on the quality of the product and its technical features, assuming that consumers will choose the best quality product. * **Limitations:** This approach may ignore the real needs and desires of consumers. - **Selling orientation (concept)** is the idea that consumers will not buy enough of the firm's products unless it undertakes a large scale selling and promotion effort. * **Focus:** on the use of extensive sales methods to convince consumers to buy products. * **Limitations:** It may lead to long-term customer dissatisfaction, and is not focused on building long-term relationships. - **Marketing orientation (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. * **Focus:** On understanding the needs and desires of consumers and meeting these needs by developing products and services that meet these needs. * **Limitations:** This approach requires continuous marketing research and adaptation of strategies to changing consumer needs. ### Marketing Mix The marketing mix is one of the most important models used in understanding and planning the marketing process. This model includes four basic elements that must come together to ensure the success of any product or service in the market. * **The marketing mix (4 Ps)**: **Product**, **Price**, **Place**, **Promotion**. * **Expanding to 7 Ps for services.** ### Product * **Tangible product:** characteristics, design, quality, and unique features. * **Brand:** The identity of the product, its logo, and its personality in the mind of the consumer. * **Packaging :** The packaging design that attracts attention and protects the product. * **Additional services:** warranties, maintenance, and after-sales services. ### Price * **Cost:** Production and distribution costs. * **Perceived customer value:** The value that the customer sees in the product compared to competitors' products. * **Pricing strategies:** cost-based pricing, competitive pricing, psychological pricing. * **Offers and discounts:** incentives that encourage purchases. ### Place * **Distribution channels:** The ways in which the product reaches the consumer (retail, internet, direct selling). * **Geographical coverage:** The areas where the product is distributed. * **Logistics:** Managing the flow of products from the factory to the consumer. ### Promotion * **Advertising:** Using various media to promote the product. * **Public Relations:** Building a positive image of the company and the product. * **Direct marketing:** direct communication with customers (email, text messages). * **Online marketing:** the use of social media, search engines, and others. * **Personal sales:** direct communication with customers to convince them to buy. ### Expand the marketing mix (7Ps): In some cases, the marketing mix is expanded to include three additional elements, especially in the case of services: * **People:** The company's employees who deal with customers. * **Process:** The procedures and systems through which the service is provided. * **Physical Evidence:** Any tangible object related to the service (business cards, building, promotional materials). ### Building Customer Relationships CRM (Customer Relationship Management) focuses on building and maintaining strong relationships. * **Customer relationship management (CRM) is a strategic approach aimed at building strong and sustainable relationships with customers, whether they are current or future customers.** This approach goes beyond simply selling products or services, it focuses on understanding customer needs and expectations and delivering an excellent customer experience. ### CRM Importance * **Increase loyalty:** Help build customer loyalty, leading to increased frequency of purchases and reduced costs associated with attracting new customers. * **Improve customer satisfaction:** By understanding customer needs and meeting their expectations, businesses can significantly improve customer satisfaction. * **Increase sales:** Helps increase sales through casual(upselling) and cross-selling, as well as through existing customer recommendations. * **Improve efficiency:** Helps streamline processes and improve the efficiency of your sales and customer service team. * **Make better decisions:** Availability of data and analytics needed to make better marketing decisions. ### Components of CRM System * **Comprehensive database:** Store all information related to customers, such as purchase history, product preferences, and contact history. * **Task automation:** Simplify routine tasks such as tracking leads, sending marketing emails, and recording calls. * **Data Analysis:** Use analytics tools to derive valuable insights from customer data. * **Communication tools:** Facilitate communication with customers through various channels, such as email, phone, and live chat. * **Customer Service:** Providing tools to support customers and solve their problems effectively. ### Benefits of CRM * **Deeper customer understanding:** Helps understand customer behaviors and preferences. * **Improved customer experience:** Enables businesses to deliver a personalized customer experience. * **Increase efficiency:** Reduces the time and effort required to manage customer relationships. * **Increase revenue:** Contributes to increasing sales and improving profits. ### How to choose the right CRM system: * **Identify needs:** Identify the features the company needs in the CRM system. * **Budget:** Determine the budget available for the system. * **Company size:** Choose a system commensurate with the size of the company and the number of customers. * **Ease of use:** Choose a system that is easy to use and suitable for the company's employees.