Marketing Concepts PDF

What Is Marketing? • Marketing is engaging customers and managing profitable customer relationships. • Goals of Marketing • Attract new customers by promising superior value • Keep and grow current customers by delivering satisfaction Copyright © 2017 Pearson Education, Ltd. 1-6 Forms of Mark...

What Is Marketing? • Marketing is engaging customers and managing profitable customer relationships. • Goals of Marketing • Attract new customers by promising superior value • Keep and grow current customers by delivering satisfaction Copyright © 2017 Pearson Education, Ltd. 1-6 Forms of Marketing Traditional • Making a sale • Abundance of products in the nearby shopping centers • Television, magazine, and direct-mail ads Contemporary • Satisfying customer needs • Imaginative Web sites and mobile phone apps, blogs, online videos, and social media • Reach customers directly, personally, and interactively Copyright © 2017 Pearson Education, Ltd. 1-7 Figure 1.1 - The Marketing Process: Creating and Capturing Customer Value Copyright © 2017 Pearson Education, Ltd. 1-8 Learning Objective 1-1 Summary • Marketing creates value for customers • understand marketplace and customers • design a customer value-driven marketing strategy • construct a marketing program • engage customers, build relationships • Captures value from customers Copyright © 2017 Pearson Education, Ltd. 1-9 Understanding the Marketplace and Customer Needs • Five core customer and marketplace concepts: • • • • • Needs, wants, and demands Market offerings Value and satisfaction Exchanges and relationships Markets Copyright © 2017 Pearson Education, Ltd. 1-11 Customer Needs, Wants, and Demands Needs • States of felt deprivation • Physical needs - Food, clothing, warmth, and safety • Social needs - Belonging and affection ‫اﻟﺣﻧﺎن‬ • Individual needs - Knowledge and self-expression Wants • Form taken by human needs when shaped by culture and individual personality Demands • Human wants that are backed ‫ ﺗدﻋﻣﮭﺎ‬by buying power Copyright © 2017 Pearson Education, Ltd. 1-12 Market Offerings • Products, services, information or experiences • Offered to satisfy a need or want • Marketing myopia - paying more attention to the specific products than to the benefits and experiences produced Copyright © 2017 Pearson Education, Ltd. 1-14 Customer Value and Satisfaction • Customers form expectations about the value and satisfaction of market offerings. • Satisfied customers buy again • Dissatisfied customers switch to competitors • Setting the right level of expectations • Low expectations may fail to attract buyers • High expectations may disappoint buyers Copyright © 2017 Pearson Education, Ltd. 1-15 Exchanges and Relationships • Exchange is the act of obtaining a desired object by offering something in return. • Marketing consists of creating, maintaining, and growing desirable exchange relationships. • Strong relationships are built by consistently delivering superior customer value. Copyright © 2017 Pearson Education, Ltd. 1-16 Markets • All actual and potential buyers of a product • Sellers and Consumers market • Customer-managed relationships Copyright © 2017 Pearson Education, Ltd. 1-17 Figure 1.2 - A Modern Marketing System Copyright © 2017 Pearson Education, Ltd. 1-18 Other marketplace concepts • Value proposition: a set of benefits that they promise to consumers to satisfy their needs. The value proposition is fulfilled through a market offering, which delivers customer value and satisfaction, resulting in long-term exchange relationships with customers. Copyright © 2017 Pearson Education, Ltd. 1-20 Designing a Customer Value-Driven Marketing Strategy • Marketing management: Choosing target markets and building profitable relationships • Designing a winning marketing strategy • Target market? • Value proposition? Copyright © 2017 Pearson Education, Ltd. 1-22 Designing a Customer Value-Driven Marketing Strategy • Market segmentation refers to dividing the markets into segments of customers. • Target marketing refers to which segments to go after. Copyright © 2017 Pearson Education, Ltd. 1-23 Designing a Customer Value-Driven Marketing Strategy Choosing a value proposition - the company must decide how it will differentiate and position itself in the marketplace. Copyright © 2017 Pearson Education, Ltd. 1-24 Designing a Customer Value-Driven Marketing Strategy • Marketing management orientations • Production concept • Product concept • Selling concept • Marketing concept • Societal marketing concept ‫ﻣﺻﺎﻟﺢ اﻟﻣﺳﺗﮭﻠﻛﯾن‬ ‫ﻋﻠﻰ اﻟﻣدى اﻟطوﯾل وﻣﺻﺎﻟﺢ اﻟﻣﺟﺗﻣﻊ ﻋﻠﻰ اﻟﻣدى اﻟطوﯾل‬ Copyright © 2017 Pearson Education, Ltd. 1-25 Figure 1.3 - The Selling and Marketing Concepts Contrasted Copyright © 2017 Pearson Education, Ltd. 1-26 Figure 1.4 - Three Considerations Underlying the Societal Marketing Concept Copyright © 2017 Pearson Education, Ltd. 1-27 Marketing Mix • Four Ps of Marketing • Product • Price • Place • Promotion • Marketing mix tools should be blended into a comprehensive integrated marketing program. Copyright © 2017 Pearson Education, Ltd. 1-28 Marketing Mix • The major marketing mix tools are product, price, place, and promotion. To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place). Finally, it must communicate with target customers about the offering and persuade them of its merits (promotion). Copyright © 2017 Pearson Education, Ltd. 1-29 Customer Relationship Management • Delivering superior customer value and satisfaction to build and maintain profitable customer relationships • Customer-perceived value: Customer’s evaluation of a marketing offer relative to those of competing offers • Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s expectations Copyright © 2017 Pearson Education, Ltd. 1-32 Customer Relationship Levels and Tools Levels Tools • Basic relationships • Low-margin customers • Full partnerships • High-margin customers • Frequency marketing programs • Loyalty rewards programs • Club marketing programs Copyright © 2017 Pearson Education, Ltd. 1-33 Customer-Engagement Marketing • Customer-engagement marketing makes the brand a meaningful part of consumers’ conversations and lives. • Greater consumer empowerment means that companies must practice marketing by attraction. • Marketers must find ways to enter consumers’ conversations with engaging and relevant brand messages. Copyright © 2017 Pearson Education, Ltd. 1-34 Consumer-Generated Marketing • Brand exchanges created by consumers • Consumers play an increasing role in shaping their own brand experiences and those of other consumers. • Uninvited and Invited • Consumer-to-consumer exchanges : exchanges in blogs, video-sharing sites, social media, and other digital forums. • Consumers invited by companies • New product and service ideas • Active role in shaping ads Copyright © 2017 Pearson Education, Ltd. 1-35 Partner Relationship Management • Working closely with partners both inside and outside the company to jointly bring more value to customers • Partners inside the firm—cross-functional teams • Partners outside the firm—suppliers, channel partners Copyright © 2017 Pearson Education, Ltd. 1-36 Creating Customer Loyalty and Retention • Keeping customers loyal makes good economic sense. • Customer lifetime value is the value of the entire stream of purchases a customer makes over a lifetime of patronage. • Customer defections can be costly • Can lose that customer’s lifetime value • May cause other customers to defect Copyright © 2017 Pearson Education, Ltd. 1-37 Share of Customer • Portion of the customer’s purchasing in their product categories • Share of Customer is increased by: • Good customer relationship management • Offering greater variety to current customers • Creating programs to cross-sell and up-sell to existing customers Copyright © 2017 Pearson Education, Ltd. 1-38 cross-sell and up-sell Cross-selling is encouraging the purchase of anything in conjunction with the primary product. So in this example, if the primary product you were buying was a burger, and your server asked if you wanted French fries as well, that would be cross-selling you a complementary product alongside your original purchase. Upselling is suggesting a product that will upgrade the primary purchase -and make it more expensive. Upselling is encouraging the purchase of anything that would make the primary purchase more expensive. Cross-selling is encouraging the purchase of anything in conjunction with the primary product. Think of it as the difference between a complementary product and an upgrade: Where cross-selling suggests another purchase alongside the primary product, upselling encourages customers to make an additional purchase to use with the primary product Copyright © 2017 Pearson Education, Ltd. 1-39 Customer Equity • Total combined customer lifetime values of all of the company’s customers • Measures the future value of the company’s customer base • Increases when the loyalty of the firm’s profitable customers increases • Better measure of a firm’s performance than current sales or market share Copyright © 2017 Pearson Education, Ltd. 1-40 Figure 1.5 - Customer Relationship Groups Copyright © 2017 Pearson Education, Ltd. 1-42 The Changing Marketing Landscape • • • • • Digital Age Changing Economic Environment Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing Copyright © 2017 Pearson Education, Ltd. 1-45 The Digital Age: Online, Mobile, and Social Media Marketing • Digital and social media marketing: Engaging consumers via their digital devices using digital marketing tools • Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience • Blending the new digital approaches with traditional marketing creates a smoothly integrated marketing strategy and mix. Copyright © 2017 Pearson Education, Ltd. 1-46 Changing Economic Environment • The Great Recession undermined consumer confidence. ‫ﻗوض ﺛﻘﺔ اﻟﻌﻣﯾل‬ • Post-recession era ‫ﺣﻘبﺔ ﻣﺎ ﺑﻌﺪ اﻟﺮ�ﻮد‬ • Consumers have become more frugal.‫اﻗﺗﺻﺎدﯾﯾن‬ • New consumer spending values emphasize simpler living. • Marketers are focusing on value, practicality and durability in their product offerings. Copyright © 2017 Pearson Education, Ltd. 1-47 Growth of Not-for-Profit Marketing Sound marketing can help not-forprofits attract membership, funds, and support. Copyright © 2017 Pearson Education, Ltd. 1-48 Rapid Globalization and Sustainable Marketing • Managers around the world are taking both local and global views of the company’s: • Industry • Competitors • Opportunities • Corporate ethics and social responsibility have become important for every business. Copyright © 2017 Pearson Education, Ltd. 1-49 Figure 1.6 - An Expanded Model of the Marketing Process Copyright © 2017 Pearson Education, Ltd. 1-51