Why Companies Need Marketing?

Marketing Concept Development

September, 2008

What Is Marketing?
Simple Definition: Marketing is managing profitable customer relationships.
Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction.
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Marketing in Action

Products Can Be Ideas

Products do not have to be physical objects. Here the product is an idea -- protecting animals. Products can also be people, organizations, places, or information.

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Marketing Defined
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.
OLD View of Marketing: Making a Sale Telling & Selling
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NEW View New View of Marketing: of Marketing: Satisfying Satisfying Customer Needs customer needs
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Marketing Management

Marketing Orientations

Production concept Selling concept Product concept Marketing concept

Societal marketing concept

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Production Concept
The company should focus on the modes of production and should deliver good quality products at reasonable price

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Marketing and Sales Concepts Contrasted

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Selling Concept

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Marketing Myopia
Marketing myopia occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. They focus on the wants and lose sight of the needs.
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Product Concept

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Societal marketing concept

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The Societal Marketing Concept

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Demarketing
Demarketing is often used to discourage undesirable behaviors. Is this ad effective? Visit the Office of National Drug Control Policy ad gallery.

mediacampaign.org
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Customer-Driven Marketing
Twenty years ago, how many consumers would have thought to ask for laptops, wireless headsets, cell phones, MP3 players, PDAs, and digital cameras? Marketers must often understand customer needs even better than customers themselves do; customers often cant articulate what they really need.
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Marketing Management
The art and science of choosing target markets and building profitable relationships with them.
Requires that consumers and the marketplace be fully understood

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Marketing Management
Designing a winning marketing strategy requires answers to the following questions: 1. What customers will we serve?
What is our target market?

2. How can we best serve these customers?

What is our value proposition?
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A Simple Model of the Marketing Process

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Segmentation & Target Marketing

Market Segmentation:
Divide the market into segments of customers

Target Marketing:
Select the segment to cultivate

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The Marketing Plan

Transforms the marketing strategy into action Includes the marketing mix and 4 Ps of marketing:
Product Price Place (Distribution) Promotion
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Customer Relationship Management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Acquiring customers Keeping customers Growing customers

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The Marketing Process

A simple model of the marketing process:
Understand the marketplace and customer needs and wants. Design a customer-driven marketing strategy. Construct a marketing program that delivers superior value. Build profitable relationships and create customer delight. Capture value from customers to create profits and customer quality.
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Customer Perceived Value

Customers evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.

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Customer Satisfaction
Dependent on the products perceived performance relative to a buyers expectations.
Customer satisfaction often leads to consumer loyalty. Some firms seek to DELIGHT customers by exceeding expectations.

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Customer Relationships
Loyalty and retention programs build relationships and may feature:
Financial Benefits EX: Frequency marketing programs Social Benefits EX: Club marketing programs Structural Ties

Focus is on relating directly to profitable customers, for the longterm.

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Partner Relationship Marketing

Marketing partners help create customer value and assist in building customer relationships. Partners inside the firm:
All employees customer focused Teams coordinate efforts toward customers

Partners outside the firm:

Supply chain management Strategic alliances
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Customer Loyalty & Retention

Customer Lifetime Value
The entire stream of purchases that the customer would make over a lifetime of patronage.
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Share of Customer
The share a company gets of the customers purchasing in their product categories.

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Customer Equity
The combined discounted customer lifetime values of all the companys current and potential customers.
Classify customers by loyalty and potential profitability Manage accordingly

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The New Digital Age

Technology impacts the ways firms bring value to their customers. Greater connectivity means greater access to information, faster travel and communication. The Internet allows anytime, anywhere connections between firms and customers.
Click-and-mortar companies Click-only companies Business-to-business e-commerce

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New Marketing Landscape

Rapid Globalization Ethics and Social Responsibility Not-for-Profit Marketing New World of Marketing Relationships

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