Principles of Marketing. ppt, chapter 1

Marketing chapter 1

1. Principles of Marketing Kotler and Armstrong Chapter 1: Marketing Creating Customer Value and Engagement Insert Textbook Cover Image Copyright © 2016 Pearson Education, Inc. 1- 1

2. Objective 1: Define marketing and outline the steps in the marketing process. Objective 2: Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Learning Objectives Marketing: Creating Customer Value and Engagement 1- 2 Copyright © 2016 Pearson Education, Inc.

3. Objective 3: Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Learning Objectives Marketing: Creating Customer Value and Engagement 1- 3 Copyright © 2016 Pearson Education, Inc.

4. Learn ing Objectives Marketing: Creating Customer Value and Engagement Objective 4: Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Objective 5: Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2016 Pearson Education, Inc. 1- 4

5. TRADITIONAL CONCEPT OF MARKETING According to the traditional concept, marketing means selling goods and services that have been produced. Thus, all those activities which are concerned with persuasion and sale of goods and services, are called marketing. This concept of marketing emphasizes on promotion and sale of goods and services and little attention is paid to consumer satisfaction. This concept has the following implications: The main focus of this concept is on product, i.e., we have a product, and it has to be sold. So, we have to persuade the consumers to buy our product. All efforts of the marketing people are concentrated on selling the product. They adopt all means like personal selling and sales promotion to boost the sales. The ultimate goal of all marketing activity is to earn profit through maximization of sales

6. Marketing: Creating Customer Value and Engagement Learning Objective 1 Define marketing and outline the steps in the marketing process. What Is Marketing? Copyright © 2016 Pearson Education, Inc. 1- 6

7. TRADITIONAL CONCEPT OF MARKETING According to the traditional concept, marketing means selling goods and services that have been produced. Thus, all those activities which are concerned with persuasion and sale of goods and services, are called marketing. This concept of marketing emphasizes on promotion and sale of goods and services and little attention is paid to consumer satisfaction. This concept has the following implications: The main focus of this concept is on product, i.e., we have a product, and it has to be sold. So, we have to persuade the consumers to buy our product. All efforts of the marketing people are concentrated on selling the product. They adopt all means like personal selling and sales promotion to boost the sales. The ultimate goal of all marketing activity is to earn profit through maximization of sales

8. MODERN CONCEPT OF MARKETING The modern concept of marketing considers the consumers’ wants and needs as the guiding spirit and focuses on the delivery of such goods and services that can satisfy those needs most effectively. Thus, marketing starts with identifying consumer needs, then plan the production of goods and services accordingly to provide him the maximum satisfaction. In other words, the products and services are planned according to the needs of the customers rather than according to the availability of materials and machinery. Not only that, all activities (manufacturing, research and development, quality control, distribution, selling etc.) are directed to satisfy the consumers. Peter Drucker, a leading management theorist, says that “the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.

9. DIFFERENCE BETWEEN SELLING AND MARKETING The old sense of making a sale is telling and selling, but in new sense it is satisfying customer needs. Selling occurs only after a product is produced. By contrast, marketing starts long before a company has a product.

10. What is marketing? Many people think of marketing as only selling and advertising. We are bombarded every day with TV commercials However, selling and advertising are only the tip of the marketing iceberg. Today, marketing must be understood not in the old sense of making a sale—“telling and selling”—but in the new sense of satisfying customer needs. If the marketer engages consumers effectively, understands their needs, develops products that provide superior customer value, and prices, distributes, and promotes them well, these products will sell easily Peter Drucker, a leading management theorist, says that “the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Marketing Defined

11. Marketing, more than any other business function, deals with customers. Although we will soon explore more-detailed definitions of marketing, perhaps the simplest definition is this one: Marketing is engaging customers and managing profitable customer relationships. The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering value and satisfaction. Marketing Defined

12. What Is Marketing? Marketing Defined Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Copyright © 2016 Pearson Education, Inc. 1- 13

13. What Is Marketing? The Marketing Process Copyright © 2016 Pearson Education, Inc . 1- 14

14. Marketing: Creating Customer Value and Engagement Learning Objective 1 Define marketing and outline the steps in the marketing process. What Is Marketing? - creating value for customers - capturing value from customers Copyright © 2016 Pearson Education, Inc. 1- 15

15. Marketing: Creating Customer Value and Engagement Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Understanding the Marketplace and Customer Needs Copyright © 2016 Pearson Education, Inc. 1- 16

16. Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Copyright © 2016 Pearson Education, Inc. 1- 18

17. Understanding the Marketplace and Customer Needs 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. Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs. Copyright © 2016 Pearson Education, Inc . 1- 19

18. Understanding the Marketplace and Customer Needs Customer Value and Satisfaction 1-13 Copyright © 2016 Pearson Education, Inc.

19. Understanding the Marketplace and Customer Needs Exchanges and Relationships Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing actions try to create, maintain, and grow desirable exchange relationships . Copyright © 2016 Pearson Education, Inc. 1- 21

20. Understanding the Marketplace and Customer Needs Markets Copyright © 2016 Pearson Education, Inc . 1- 22

21. Marketing: Creating Customer Value and Engagement Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Customer Needs, Wants, and Demands Market Offerings – Products, Services, and Experiences Customer Value and Satisfaction Exchanges and Relationships Markets Copyright © 2016 Pearson Education, Inc. 1- 23

22. Marketing: Creating Customer Value and Engagement Learning Objective 3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Designing a Customer Value-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program Copyright © 2016 Pearson Education, Inc. 1- 24

23. Designing a Customer Value-Driven Marketing Strategy Selecting Customers to Serve 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? Copyright © 2016 Pearson Education, Inc . 1-18

24. Designing a Customer Value-Driven Marketing Strategy Selecting Customers to Serve Market segmentation refers to dividing the markets into segments of customers. Target marketing refers to which segments to go after. Copyright © 2016 Pearson Education, Inc. 1-19

25. Designing a Customer Value-Driven Marketing Strategy Choosing a Value Proposition A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Twitter, Inc. Copyright © 2016 Pearson Education, Inc. 1- 27 The customer-driven marketing strategy outlines which customers the company will serve (the target market) and how it will serve them (the value proposition). Now, the company develops marketing plans and programs—a marketing mix—that will actually deliver the intended customer value.

26. Positioning Now that the target market /s have been finalized a positioning platform needs to be created. Positioning starts with a product a piece of merchandise a service, a company an institution or even person. Positioning is not what is done to the product but what is done to the mind of the prospect. That is, you position the product in the mind of the prospect The concept of positioning needs to be looked at from the perspective of the environment that it operates in. It is how your product is perceived in the marketplace relative to the competitor . In retail the environments are constantly changing thus the context of the positioning is bound to change. The overall strategy of the firm largely affects the positioning strategy adopted by the retailer. The four main areas that affect the retail positioning strategy Thus, product positioning is the way a product occupies a place in the minds of the customers relative to competing products.

27. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Copyright © 2016 Pearson Education, Inc. 1- 29

28. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Production concept: Consumers will favor products that are available and highly affordable. Copyright © 2016 Pearson Education, Inc. 1- 30

29. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Product concept: Consumers favor products that offer the most quality, performance, and features. The focus is on continuous product improvements. Copyright © 2016 Pearson Education, Inc. 1- 31

30. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Selling concept: Consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort. Copyright © 2016 Pearson Education, Inc. 1- 32

31. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Marketing concept: Know the needs and wants of the target markets and deliver the desired satisfactions better than competitors. Copyright © 2016 Pearson Education, Inc. 1- 33

32. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Societal marketing: The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Copyright © 2016 Pearson Education, Inc. 1- 34

33. Designing a Customer Value-Driven Marketing Strategy Marketing Management Orientations Copyright © 2016 Pearson Education, Inc. 1- 35

34. The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy. This set includes product, price, promotion, and place. An integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers. Copyright © 2016 Pearson Education, Inc. 1- 37

35. Marketing: Creating Customer Value and Engagement Learning Objective 3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Designing a Customer Value-Driven Marketing Strategy - Selecting Customers - Choosing a Value Proposition - Marketing Management Orientations Preparing an Integrated Marketing Plan and Program Copyright © 2016 Pearson Education, Inc. 1- 38

36. Marketing: Creating Customer Value and Engagement Learn ing Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Building Customer Relationships Capturing Value from Customers Copyright © 2016 Pearson Education, Inc. 1- 39

37. Building Customer Relationships Customer Relationship Management Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Copyright © 2016 Pearson Education, Inc. 1- 40

38. Building Customer Relationships Customer Relationship Management Relationship Building Blocks Copyright © 2016 Pearson Education, Inc. 1- 41

39. Building Customer Relationships Customer Relationship Management Customer Relationship Levels and Tools Copyright © 2016 Pearson Education, Inc. 1- 42

40. Building Customer Relationships Engaging Customers Customer-Engagement and Today’s Digital and Social Media Customer-Engagement Marketing makes the brand a meaningful part of consumers’ conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community. Copyright © 2016 Pearson Education, Inc. 1- 43

41. Building Customer Relationships Engaging Customers Customer Engagement and Today’s Digital and Social Media Customer engagement and the social media: “Share It Up” social media campaign Hertz System, Inc . Copyright © 2016 Pearson Education, Inc. 1- 44

42. Building Customer Relationships Engaging Customers Consumer-Generated Marketing Brand exchanges created by consumers themselves—both invited and uninvited—by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. Copyright © 2016 Pearson Education, Inc. 1- 45

43. Building Customer Relationships Engaging Customers Engaging customers: Life is good starts with a deeply felt, engagement-worthy sense of purpose: spreading the power of optimism. The Life is good Company Copyright © 2016 Pearson Education, Inc. 1- 46

44. Building Customer Relationships Partner Relationship Management Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. 1- 47 Copyright © 2016 Pearson Education, Inc.

45. Capturing Value from Customers Creating Customer Loyalty and Retention Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. 1- 48 Keeping customers loyal makes good economic sense. Loyal customers spend more and stay around longer. Research also shows that it’s five times cheaper to keep an old customer than acquire a new one. Conversely, customer defections can be costly. Losing a customer means losing more than a single sale. It means losing the entire stream of purchases that the customer would make over a lifetime of patronage.

46. Capturing Value from Customers Growing Share of Customer Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. Copyright © 2016 Pearson Education, Inc. 1- 49 To increase share of customer, firms can offer greater variety to current customers or they can create programs to cross-sell and up-sell to market more products and services to existing customers.

47. Capturing Value from Customers Building Customer Equity Customer equity is the total combined customer lifetime values of all of the company’s customers. Copyright © 2016 Pearson Education, Inc . 1- 50

48. Capturing Value from Customers Building Customer Equity Building the Right Relationships with the Right Customers FIGURE 1.5 Customer Relationship Groups Copyright © 2016 Pearson Education, Inc. 1- 51

49. Marketing: Creating Customer Value and Engagement Learn ing Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Building Customer Relationships - Customer Relationship Management - Engaging Customers - Partner Relationship Management Copyright © 2016 Pearson Education, Inc. 1- 52

50. Marketing: Creating Customer Value and Engagement Learn ing Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Capturing Value from Customers - Creating Customer Value Loyalty & Retention - Growing Share of Customer - Building Customer Equity Copyright © 2016 Pearson Education, Inc. 1- 53

51. Marketing: Creating Customer Value and Engagement Learn ing Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. The Changing Marketing Landscape Copyright © 2016 Pearson Education, Inc. 1- 54

52. The Changing Marketing Landscape The Digital Age: Online, Mobile, and Social Media Marketing Digital and social media marketing involves using digital marketing tools such as web sites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices. Copyright © 2016 Pearson Education, Inc. 1- 55

53. The Changing Marketing Landscape The Digital Age: Online, Mobile, and Social Media Marketing Copyright © 2016 Pearson Education, Inc. 1- 56

54. The Changing Marketing Landscape Not-for-profit marketing growth Rapid globalization Sustainable marketing Copyright © 2016 Pearson Education, Inc. 1- 57

55. Marketing: Creating Customer Value and Engagement Learn ing Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. The Changing Marketing Landscape - The Digital Age - Not-for-Profit - Rapid Globalization - Sustainable Marketing Copyright © 2016 Pearson Education, Inc. 1- 58

56. So, What Is Marketing? Pulling It All Together Copyright © 2016 Pearson Education, Inc. 1- 59

57. Principles of Marketing PowerPoint Copyright Page Copyright © 2016 Pearson Education, Inc. 1-52