Principles Of Marketing - The Marketing Process PDF

THE MARKETING PROCESS Chapter 02 Principles of Marketing Prepared by: Robert V. Espiritu Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return.  The Marketing Framewor...

THE MARKETING PROCESS Chapter 02 Principles of Marketing Prepared by: Robert V. Espiritu Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return.  The Marketing Framework Understand Design a Construct and Build Capture value the customer- integrated profitable from marketplace driven marketing relationships customers to and customer marketing program that and create create profits needs and strategy delivers customer and customer wants superior delight equity. value UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS STAGE 1 Needs, Wants, and Demands Needs are states of deprivation Physical - food, clothing, warmth, safety Social - belonging and affection Individual - knowledge and self-expression Needs, Wants, and Demands Wants are the form that needs take as they are shaped by culture and individual personality. Demands are wants backed by buying power. Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Market Offerings Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs. Exchanges and Relationships ◦ Exchange is the act of obtaining a desired object from someone by offering something in return. ◦ Marketing consist of actions to build and maintain desirable relationships.  Markets are the set of Markets actual and potential buyers of a product.  Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system who are affected by major environmental forces Markets Demographic Economic Physical / Environmental Technological Political–legal Socio-cultural  DESIGNING A CUSTOMER DRIVEN MARKETING STRATEGY STAGE 2 Marketing Management 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? Selecting Customers to Serve Market segmentation: Dividing the markets into segments of customers. Target marketing: Which segments to go after. De-marketing Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it.  VALUE PROPOSITION is the set of benefits or values a company promises to deliver to customers to satisfy their needs.  VALUE PROPOSITION Value Proposition Marketing Management Orientations Production Product Selling concept concept concept Marketing Societal concept concept Marketing Management Orientations ◦ Production concept is ◦ Product concept is the idea the idea that consumers that consumers will favor products that offer the most will favor products that are quality, performance, and available or highly features for which the affordable. organization should therefore devote its energy to making continuous improvements. Marketing Management Orientations ◦ Selling concept is the ◦ Marketing concept is the idea that consumers will idea that achieving not buy enough of the organizational goals firm’s products unless it depends on knowing the undertakes a large scale needs and wants of the selling and promotion target markets and effort delivering the desired satisfactions better than competitors.  MARKETING MANAGEMENT ORIENTATIONS Marketing Management Orientations ◦ Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long- run interests  PREPARING AN INTEGRATED PLAN AND PROGRAM STAGE 3 The Marketing Mix ◦ Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers. The 4P’s of the Marketing Mix Marketing Mix The set of tactical marketing tools— product, price, place, and promotion— that the firm blends to produce the response it wants in the target market.  The 4P’s of the Marketing Mix Product means the goods- Price is the amount of money and-services combination the customers must pay to obtain company offers to the target the product. market. Place includes company Promotion means activities activities that make the that communicate the merits product available to target of the product and persuade consumers. target customers to buy it. BUILDING CUSTOMER RELATIONSHIPS STAGE 4  ◦ Customer relationship management Building Customer is the overall process of building and maintaining profitable customer Relationships relationships by delivering superior value and satisfaction. Customer Relationship Management ◦ Customer perceived value is the difference between total customer value and total customer cost of a market offering relative to those of competing offers. Customer Relationship Management ◦ Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations. Customer relationship levels and tools. Basic relationship Full relationships Frequency marketing programs Club marketing programs The Changing Nature of Customer Relationships Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers Relating for the long term uses customer relationship management to retain current customers and build profitable, long-term relationships Relating directly uses direct marketing tools (telephone, mail order, kiosks, Internet) to make direct connections with customers CAPTURING VALUE FROM CUSTOMERS STAGE 5  Customer lifetime value is the value Creating Customer of the entire stream of purchases that the customer would make over a Loyalty and Retention lifetime of patronage. Share of Customer ◦ Share of customer is the portion of the customer’s purchasing that a company gets in its product categories Building Customer Equity ◦ Customer equity is the total combined customer lifetime values of all of the company’s customers.  Building Customer Equity ❑Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized. ❑Different types of customers require different relationship management strategies. ❑Build the right relationship with the right customers. Capturing Value From Customers Butterflies – good fit between True Friends - good fit between company’s offerings and customer company’s offerings and customer needs; high profit potential needs; highest profit potential High Profitability Strangers – little fit between a Barnacles – limited fit between Low company’s offerings and company’s offerings and customer Profitability customer’s need; lowest profit needs; low profit potential potential Short-term customers Long-term customers