Principles of Marketing
“Marketing is managing profitable
customer relationship”
The twofold goal of marketing is:
• Attract new customers by promising superior value
• Keep and grow current customers by delivering satisfaction
Sound Marketing is critical to the success of every
organization
For-Profit Firm
ACI
SQUARE
BATA
AARONG
AGORA
Banglalink
Not-for-Profit Firm
College
Hospital
Museums
Religious Organizations
Marketing Defined
Selling and Advertising
Only the tip of the marketing iceberg.
Old sense
New sense
Making a sale”telling and selling”
Satisfying customer
needs
Broadly defined
“Marketing is a social and managerial process by
which individuals and organizations obtain what
they need and want through creating and
exchanging value with others.”
Narrower business context
“ Marketing involves building profitable, valueladen exchange relationships with customers”
Marketing
“Marketing as the process by which companies
create value for customers and building strong
customer relationship in order to capture value
from customer in return”
The Marketing Process
Create value for customers and building
strong customer relationships
Understanding
the market
place and
customer
needs and
wants
Design a
customerdriven
marketing
strategy
Construct an
integrated
marketing
program that
delivers
superior value
Capture value from customer in return
A simple Model of the Marketing Process
Build profitable
relationships
and create
customer
delight
Capture value
from customers
to create profits
and customer
equity
Understanding the market place and customer needs and wants
• Customer Needs, Wants, and Demands
• Marketing Offerings- Products, Services, and
Experiences
• Customer Value and Satisfaction
• Exchanges and Relationships
• Markets
Customer Needs, Wants, and Demands
Needs: Human needs are state of felt deprivation
Individual
need – for
knowledge and
self-expression
Social needs – for belonging
and affection
Physical need- for food,
clothing, warmth, and safety
Maslow’s Hierarchy of Need
Want
American
Food
Demand
Are the form human needs take as they
are shaped by culture and personality
Bangladeshi
Food
When backed by buying power wants
become demand.
Market Offerings – Products, Services, and Experiences
Some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.
Services
Persons
Place
Organizations
Information
Ideas
Marketing
Myopia
The mistake of paying more attention to the
specific products a company offers than to the
benefits and experiences produced by these
products
Drill machine
A qurter-inch hole
Smart marketers look beyond the attributes of the product and
services they sell.
Hewtett-Packard
Personal Computer
A collection
of wires and
electrical
components
Back-up Brain/
our life/
Autobiography
Customer Value and Satisfaction
Expectations
Too low
Too high
Marketers must be careful to set
the right level of expectations.
May satisfy those who buy but fail to
attract enough buyers
Buyer will be disappointed
Exchange and Relationships
Exchange
The act of obtaining a desired object from
someone by offering something in return
Marketing consists of actions taken to build and maintain
desirable exchange relationships with target audience.
Marketers want to build strong relationships by
consistently delivering superior customer value
Market
Suppliers
A set of all actual and potential buyers of
a product or service.
company
competitors
Marketing
Intermediaries
Major environmental forces
A Modern Marketing System
Consumers
Design a customer-driven marketing strategy
Marketing Management : as the science and arts of choosing
target markets and building profitable relationships with them.
The marketing manager’s aim is to find, attract, keep, and grow target
customers by creating, delivering, and communicating superior value.
Two important question:
1. What customers will we serve?
2. What’s our value proposition?
Selecting customers to serve
Market segmentation : Dividing the market into segments of customers.
Target marketing : Selecting which segments it will go after
Choose a value proposition
A company’s value proposition is the set of benefits or values it
promises to deliver to customers to satisfy their needs.
BMW promises “ the ultimate driving machine”
GrameenPhone – “ Stay connected”
Why should I buy your brand rather than a competitor’s ?
Marketing Management Orientations/
Marketing philosophy/ Marketing Concepts
1. The production Concept
2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept
The production Concept
The production Concept holds that consumers will favor products that
are available and highly affordable.
Management Focus i) Production Efficiency
ii) Distribution Efficiency
Useful philosophy in some situation:
1. When, Demand> Supply (Such as- WASA, DESA)
2. Product’s cost is too high
Although useful in some situation the Production Concept can
lead to making myopia
The product Concept
The idea that consumers will favor products that offer the most
quality, performance, and features and that the organizations should
therefore devote its energy to making continuous product
improvements
Management focus: making on continuous product improvements.
Marketing
myopia
Kodak – Photographic Film rather than a way
to capture and share memories.
The Selling Concept
The idea that consumers will not buy enough of the firm’s product
unless it undertake a large-scale selling and promotion effort.
Management focus: creating sales transaction
Marketing
myopia
The Marketing Concept
The marketing management philosophy that holds that achieving
organizational goals depends on knowing the needs and want of target
markets and delivering the desires satisfactions better than competitors
do.
Starting
Point
Focus
Means
Ends
Factory
Existing
product
Selling and
promoting
Profit through
sales volume
The Marketing Market
Concept
Customer
Need
Integrated
Marketing
The Selling
Concept
Profit through
customer
satisfaction
The societal Marketing Concept
The idea that a company’s marketing decisions should consider
consumer’s requirements, consumer’s long-run interest
The considerations underlying the Societal Marketing Concept
Society
(Human welfare)
Societal
Marketing
Concept
Consumers
(Want satisfaction)
Company
(Profit)
Preparing an Integrated Marketing Plan and Program
Actually deliver the intended value to target customers
Marketing Mix
Four Ps
Product
To deliver its value proposition, the firm must first
create a need-satisfying market offerings
Price
It must decide how much it will charge for the offering.
Place
How it will make the offering available to target
consumers.
Promotion It must communicate with target customers about
the offering and persuade them of its merits
Building Customer Relationship
Customer Relationship Management
The overall process building and maintaining profitable customer
relationships by delivering superior customer value and satisfaction
Relationship Building Block:
Customer
value
Customer
Satisfaction
Customer value and satisfaction
The customer’s evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to those
of competing offers.
The extent to which a product’s perceived performance
matches a buyer’s expectations.
Customer Relation Level and Tools
Many Low-Margin Customers
Few Customers and high margin
Basic Relationships
Create full partnership
The Changing Nature of Customer Relationships
Relating with More Carefully Selected Customers
Relating with Deeply and Interactively
Consumer-generated Marketing
Partner Relationship Management
Partner Inside the Company
Marketing Partner Outside the firm
Capturing Value from Customers
By creating superior customer value, the firm creates highly
satisfied customers who stay loyal and buy more. This, in return
means greater long-run returns for the firm.
Creating Customer Loyalty and Retention
Good customer relationship
Losing a customer
customer delight
losing a single sale
It means losing the entire stream of purchases that the
customer would make over a lifetime of patronage.
Customer lifetime value
The value of the entire stream of purchases that the
customer would make over a lifetime of patronage.
A customer spends about Tk.100 a week, shops 50 weeks a
year, and remains in the area for about 10 years
Tk100.00 x 50 x 10 = Tk.50,000
Growing Share of Customer
Share of Customer
The portion of the customer’s purchasing that a
company gets in its product categories
Bank
Share of wallet
Restaurants
Share of stomach
Car
Share of garage
Airlines
Share of travel
Building Customer Equity
Customer Equity :The total combined customer lifetime values
of all of the company’s customers
Building the Right Relationships with the Right Customers
Butterflies
True Friends :
Good fit between
Good fit between
High
company’s offerings and company’s offerings and
Profitability
customer’s needs ;high customer’s needs ;highest
profit potentials
profit potentials
Strangers
Barnacles
Little fit between
Limited fit between
Low
company’s offerings and company’s offerings and
Profitability
customer’s needs ;
customer’s needs ;low
lowest profit potentials
profit potentials
Short-term
Long-term
The Changing Marketing Landscape
The Digital Age Computer, Communication, Information and
Other digital technologies
The digital age has provided marketers with exciting new ways
to learn about and track customers and to create products and
services tailored to individual customer needs
Digital technology has also brought a new wave of
communication, advertising , and relationship building tools –
ranging from online advertising, video, sharing tools, cell
phones and video games to widgets and online social network
Internet : A vast public web of computer networks that connects
users of all types all around the world to each other and to an
amazingly large information repository.
Rapid Globalization
Global + Local = Glocal
The Call for More Ethics and Social Responsibility
1. Consumerism
2. Environmentalism
The Growth of Not-for-Profit Marketing
Discussion?