1 1 Learning Objectives: After this session, you should be able to:
1. Define marketing and outline the steps in the marketing
process
2. Explain the importance of understanding customers and the
marketplace, and identify the five core marketplace concepts
3. Identify the key elements of a customer-driven marketing
strategy and discuss the marketing management orientations that guide marketing strategy
4. Discuss customer relationship management, and identify
strategies for creating value for customers and capturing value
from customers in return
What Do You Know About….
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What is Marketing? Marketing defined:
Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return.
(By satisfying customers’ needs profitably)
What is Marketing? Marketing is all around you…
The fruit seller has to:
• Understand her market, • Distribute her fruits at the right place • Sell them at the right price • Be alert of who else are selling fruits or possible substitutes.
She has to make sure that she offers
superior customer value.
What is Marketing?
The Marketing Process
A Simple Model of the Marketing Process
In the final step, companies reap the rewards of capturing value from consumers in the form of sales, profits, and long-term customer equity.
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Core Concepts
Customer Needs, Wants and Demands
• States of deprivation • Physical—food, clothing, warmth, safety Needs • Social—belonging and affection • Individual—knowledge and self-expression
•Form that needs take as they are shaped by
Wants culture and individual personality
Demands •Wants backed by buying power
Maslow’s Hierarchy Of Needs
Core Concepts
Market Offerings—Products, Services, and Experiences
Market offerings are some combination of products,
services, information, or experiences offered to a market to satisfy a need or want.
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Core Concepts
Customer Value & Satisfaction
Creating the balance between customer expectations and the marketers ability to deliver on value
Customers • Value and satisfaction
Marketers • Set the right level of expectations • Not too high or low
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Core Concepts
Marketing and Exchange
Exchange is the act of
obtaining a desired object from someone by offering something in return
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Core Concepts
Market
The set of all actual and
potential buyers of a product or service
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Core Concepts
Elements of modern marketing system
The different parties who are involved in the marketing
process
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Designing a Customer-Driven Marketing Strategy
Marketing Management
Marketing management is defined as the art and science of choosing target markets and building profitable relationships with them.
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Designing a Customer-Driven Marketing Strategy
Marketing Management
Two key questions to determine how to design a winning
marketing strategy:
1.What customers will we serve? (What’s our target market)
2.How can we best serve these customers? (What’s our value proposition)
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Designing a Customer-Driven Marketing Strategy
Target Market
The company must decide whom
it will serve by: • Divide the market into segments of customers (segmentation) • Selecting which segments to serve (targeting) The Mandarin Oriental Hotel goes after the affluent professionals and business market.
Over time five alternative concepts have developed under
which organizations design and carry out their marketing strategies.
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Designing a Customer-Driven Marketing Strategy
Production Concept
Consumers will favor products that are available and
affordable.
Management should focus on improving production and
distribution efficiency.
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Designing a Customer-Driven Marketing Strategy
Product Concept
Consumers will favor products that offer the most in quality,
performance, and innovative features
Organization should therefore devote its energy to making
continuous product improvements.
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Designing a Customer-Driven Marketing Strategy
The problem with the Product Concept
Product quality and improvement are important parts of
most marketing strategies. However, focusing only on the company’s products can also lead to marketing myopia.
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What is this company well known
for?
What is their situation now?
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What went wrong?
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Marketing myopia
• The mistake of paying more attention to the specific
products a company offers than to the benefits and experiences derived from these products.
• Companies must seek to avoid the marketing myopia
trap!
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Designing a Customer-Driven Marketing Strategy
Selling Concept
Consumers will not buy enough products
unless the company undertakes a large scale selling and promotion effort from the company
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Designing a Customer-Driven Marketing Strategy
Marketing Concept
• Under the marketing concept, customer focus and value
are the paths to sales and profits. • The job is not to find the right customers for your product but to find the right products for your customers. • Customer-driven marketing is about understanding customer needs and creating products and services that meet existing and latent needs. • And delivering the desired satisfactions better than competitors do
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Designing a Customer-Driven Marketing Strategy
Marketing Concept
Example of the marketing concept being applied: KFC
adapts its menu to suit Vietnamese tastes.
In terms of website In terms of menu In terms of location
and language Source: http://www.kfcvietnam.com.vn/
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Designing a Customer-Driven Marketing Strategy
The selling and the marketing concepts contrasted
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Designing a Customer-Driven Marketing Strategy
Societal Marketing Concept
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.
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Designing a Customer-Driven Marketing Strategy
Three considerations underlying the
societal marketing concept
Companies should balance three considerations in setting their marketing strategies: company profits, consumer wants, and society’s interests.
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Clicker question
1. ANZ has announced a donation of US$87,000 to support
communities in Indonesia, Philippines, Vietnam, Cambodia, and Laos which have been impacted by Typhoon Ketsana. The statement above illustrates that ANZ applies the__________.
a) Production concept b) Product concept c) Selling concept d) Marketing concept e) Societal marketing concept
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Clicker question 2. AIG, an international insurance company uses personal selling to approach its target market. A salesperson could gain up to 50% commission for selling a 30-year life insurance contract. Customers who sign the contract also have a chance to win a villa in a lucky draw. What marketing concept is AIG practicing?
a) Production concept b) Product concept c) Selling concept d) Marketing concept e) Societal marketing concept
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Building Customer Relationships
Customer Relationship Management (CRM)
• The overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
• Managing customer “touch points”
in order to maximize customer loyalty.
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Building Customer Relationships
Customer Perceived Value
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Capturing Value from Customers
Creating Customer Loyalty and Retention
• The aim of CRM is to create not just customer satisfaction,
but customer delight.
• Companies are realizing that losing a customer means
losing more than a single sale. It means losing customer lifetime value.
• Customer lifetime value is the value of the entire
stream of purchases that the customer would make over a lifetime of patronage.
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Capturing Value from Customers
Share of customer
Share of customer is the portion of the customer’s
purchasing that a company gets in its product categories
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Capturing Value from Customers
Customer Equity
Customer equity is the total combined customer lifetime
values of all of the company’s customers
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Clicker question
3. Ngoc Anh has just bought a Cosmopolitan magazine and read it
for the first time. She found that the magazine has good contents and many interesting issues beyond her expectation. The magazine has achieved _________.
a) Societal marketing concept
b) Product development c) Relationship d) Brand equity e) Customer satisfaction
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Clicker question
4. For months Linh has wanted to buy an iPhone6. Now that she has finally saved enough money from her part-time job she has the buying power to purchase the phone she has dreamed about. Linh’s want now has become a ________.
a) Need b) Necessity c) Demand d) Satisfier e) None of the above
