Unit 1 Defining Marketing And The Marketing Process To Post

1. “Marketing”:
What does it mean?
Principles of Marketing – Spring 2008
Dr. Hila Riemer
Unit 1

2. Agenda
Introduce ourselves
What is “marketing?
Course matters

3. Foundations of Marketing
What We Will Cover
What is Marketing?
The Marketplace and Customer Needs
Marketing Management
Marketing Management Philosophies
Building Customer Relationships

4. ?What is Marketing

5. Founded ~1965 –with a unique concept of drip irrigation- a revolutionary irrigation
practice.
Today:
•Sales of more than 350 million dollars a year,
•32 subsidiaries
•Operating in more then 110 countries
•12 manufacturing facilities worldwide,
•The largest low-volume irrigation company in the world.

Netafim's continuously-expanding lineup of innovative products are used in every
type of agricultural venture - from high tech corporate farms to traditional family
owned farms in developing countries.
Today, Netafim is a well-known global leader in the field of innovative irrigation-based
solutions and water technologies that solve problems and raise productivity, while
protecting the environment and saving water.

6. Creating Value
•Netafim sells the knowledge
and advanced solutions – in
irrigation.
•Netafim engages customers via
knowledge and service.
•Netafim’s 40 years of worldwide
experience in irrigation and
agro- solutions allows our
agronomists to provide
answers to any challenge in a
wide variety of local growing
conditions.
•Success has been achieved by
creating lasting customer
relationships.
Netafim – What is its secret?Netafim – What is its secret?
Case StudyCase Study
Capturing Value
•Netafim is the largest low-volume
irrigation company in the world.
•More the 350 Million US dollars a
year in more then 110 countries.
•Netafim's continuously-expanding
lineup of innovative products are
used in every type of agricultural
venture - from high tech corporate
farms to traditional family owned
farms in developing countries.
•Today, Netafim is a well-known
global leader in the field of
innovative irrigation-based
solutions and water technologies
that solve problems and raise
productivity, while protecting the
environment and saving water.

7. ?What Is Marketing
Simple Definition:
Marketing is managing profitable
customer relationships.
Goals:
3.Attract new customers by promising
superior value.
4.Keep and grow current customers by
delivering satisfaction.

8. 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”
New View
of Marketing:
Satisfying
customer needs
NEW View
of Marketing:
Satisfying
Customer Needs

9. “…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.
Ideally, marketing should result in a
customer who is ready to buy. All that
should be needed then is to make the
product of service available…”
Peter Drucker
)Marketing Defined )cont’d

10. A Simple Model of the Marketing
Process
Understand the
marketplace and
customer needs
and wants
Capture value from
customers to create
profits and customer
equity
Create value for customers and
build customer relationships
Capture value from
customers in return
Design a customer-
driven marketing
strategy
Build profitable
relationships and create
customer delight
Construct a
marketing program
that delivers superior
value

11. The Marketplace and
Customer Needs

12. What Motivates a Consumer to
?Take Action
Needs
Wants
Demands

13. Needs, Wants, & Demands
Need:
State of felt deprivation including
physical, social, and individual needs.
Physical needs:
Food, clothing, shelter, safety
(e.g., I am thirsty.)
Social needs:
Belonging, affection
Individual needs:
Learning, knowledge, self-expression

14. Needs, Wants, & Demands
Wants:
Form that a human need takes, as
shaped by culture and individual
personality.
(e.g., I want a Coke.)
Wants + Buying Power = Demand

15. .…Let’s apply
Consumers usually choose from a
tremendous variety of products and
services to satisfy a given need or want.
Consider your need for nourishment.
How does that need translate into different
wants?
What marketing offers are available to satisfy
your needs that also appeal to your wants?
How might other consumers in different market
segments meet the same need for nourishment?

16. Need / Want Fulfillment
Needs and wants are fulfilled through
a Marketing Offer:
Some combination of products, services,
information, or experiences offered to a
market to satisfy a need
or want.

17. Need / Want Satisfiers
Products:
Persons
Places
Organizations
Information
Ideas
Services
Activity or
benefit offered
for sale that is
essentially
intangible and
does not result
in ownership.

18. 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.
Marketing in Action

19. Need / Want Satisfiers
Products:
Persons
Places
Organizations
Information
Ideas
Services
Activity or
benefit offered
for sale that is
essentially
intangible and
does not result
in ownership.
 Brand Experiences:
“. . . dazzle their senses, touch their hearts, stimulate
their minds.”

20.  Brand Experiences:
“. . . dazzle their senses, touch their hearts, stimulate
their minds.”

21.  Brand Experiences:
“. . . dazzle their
senses, touch their
hearts, stimulate
their minds.”

22. Let’s Talk!
Does the ad shown at right
promote consumer
experiences? Explain.
Offer a different example of
a current advertising
campaign that promotes a
“consumer experience.”
Do you believe the campaign
is effective? Why or why not?

23. 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.”

24. Marketing in Action
Focused on selling prerecorded CDs, the record
industry missed early opportunities to partner with
music downloading services and manufacturers of
digital MP3 type recording devices.
Marketing Myopia in the Recording Industry

25. How Do Consumers Obtain
?Products and Services
Exchanges: act of obtaining a desired object
from someone by offering something in
return
Transactions: trade of values between two
parties (usually involve money and a
response)
Relationships: building long-term
interactions with consumers, dealers,
distributors, and suppliers

26. ?What is a Market
The set of actual and potential buyers
of a product.
These people share a need or want
that can be satisfied through exchange
relationships.

27. Modern Marketing Systems
Main elements in a modern marketing
system include:
Suppliers
Company (marketer)
Competitors
Marketing intermediaries
Final users

28. Elements of a Modern
Marketing System

29. To summarize what we have
…discussed so far
Why is understanding customer wants
so critical for marketers?
How are the concepts of value and
satisfaction related to each other?
What is the difference between
transactions and relationships?

30. Marketing Management

31. Marketing Management
The process of planning and executing
the conception, pricing, promotion,
and distribution of goods, services,
and ideas to create exchanges with
target groups that satisfy customer
and organization objectives.

32. Marketing Management
The art and science of choosing target
markets and building profitable
relationships with them.
Questions to ask
What customers will we serve?
What is our target market?
How can we best serve these customers?
What is our value proposition?

33. Segmentation & Target Marketing
Market Segmentation:
Divide the market into segments of
customers
Target Marketing:
Select the segment to cultivate

34. Pair up with another
student and discuss the ad
shown at right.
Are you part of the target
market for this product?
List the personal traits,
variables, or factors that
characterize members of
this market segment.
Let’s Talk!

35. Let’s discuss
Why is target market selection
important for a customer-driven
marketing strategy? How might
target market selection impact
customer satisfaction?

36. Marketing Management
The task of influencing the level,
timing, and composition of demand in
a way that will help the organization
achieve its objectives.
Demand Management
Finding and increasing demand, also
changing or reducing demand, as in
demarketing.

37. The basic Marketing Tasks
CountermarketingDestroy demandUnwholesome demand
DemarketingReduce demandOverfull marketing
Maintenance marketingMaintain demandFull demand
SynchoromarketingSynchronize demandIrregular demand
RemarketingRevitalize demandFaltering demand
Developmental
marketing
Develop demandLatent demand
Stimulational marketingCreate demandNo demand
Conversional marketingDisabuse demandNegative demand
Formal NameMarketing TaskDemand state

38. Marketing in Action
Demarketing is often
used to discourage
undesirable behaviors.
Is this ad effective?
Visit the Office of
National Drug Control
Policy ad gallery.
mediacampaign.org
Demarketing

39. Marketing Management
Orientations

40. Marketing Management
Philosophies
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept

41. Marketing Management
Philosophies
Production Concept
Consumers favor products that are available
and highly affordable.
Focus on improving production and
distribution efficiency
Product Concept
Consumers favor products that offer the most
quality, performance, and innovative
features.
Focus on making continuous product
improvements

42. Question
What is a limitation (or drawback) of
having a product orientation?
Marketing Myopia
Paying more attention to the specific
products than to the benefits and
experiences produced by the products
Focus more on the “wants” and lose
sight of the “needs”

43. Marketing Management
)Philosophies )cont’d
Selling Concept
Consumers will buy products only if the company
promotes or sells these product.
Focus on promotions and advertising
Marketing Concept
Knowing the needs and wants of target markets
and delivering the desired satisfaction better
than competitors
Customer-centered “sense and respond”
philosophy
Finding the right products for your customers
(not vice versa)

44. Marketing and Sales Concepts
Contrasted

45. 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 can’t articulate what they
really need.
Marketing in Action

46. Marketing Management
)Philosophies )cont’d
Societal Marketing Concept
Delivering value to customers in a way
that maintains or improves both the
consumer’s and the society’s well-being

47. A Simple Model of the Marketing
Process
Understand the
marketplace and
customer needs
and wants
Capture value from
customers to create
profits and customer
equity
Create value for customers and
build customer relationships
Capture value from
customers in return
Design a customer-
driven marketing
strategy
Build profitable
relationships and create
customer delight
Construct a
marketing program
that delivers superior
value

48. The Marketing Plan
Transforms the marketing strategy
into action
Includes the marketing mix and 4 P’s
of marketing…

49. C
The Marketing Mix - The Four Ps

50. C
ProductPlace
PricePromotion
The Marketing Mix - The Four Ps

51. C
ProductPlace
PricePromotion
The Marketing Mix - The Four Ps
• Total Product
Concept
• Branding
• Packaging
• Warranties
• Product-line
assortment
• New product
development

52. C
ProductPlace
PricePromotion
The Marketing Mix - The Four Ps
• Pricing objectives
• Pricing Policies
• Price Flexibility
• Levels over PLC
• Discounts and allowances
• Geographic terms
• Legal factors
• Markup chain in channels
• Costs
• Demand (price sensitivity)
• Competition/Substitutes
• Price of other products in line

53. C
ProductPlace
PricePromotion
The Marketing Mix - The Four Ps
Two Perspectives:

• Distribution
Channels
• Logistics

54. C
ProductPlace
PricePromotion
The Marketing Mix - The Four Ps
Strategy decisions
to blend:

• Personal Selling
• Advertising
• Publicity
• Sales Promotion

55. Target
Consumers
Product
Place Price
Promotion
Marketin
g

Imp
lemen
ta
tion
M
a
r
ke
ti
n
g
Plann
i
n
g
Marketing
C
o
nt
r
o
l
Marketing
A
n
alysis
Competitors
Marketing
Intermediaries
PublicsSuppliers
Demographic-
Economic
Environment
Technological-
Natural
Environment
Political-
Legal
Environment
Social-
Cultural
Environment
The Marketing Process

56. A Simple Model of the Marketing
Process
Understand the
marketplace and
customer needs
and wants
Capture value from
customers to create
profits and customer
equity
Create value for customers and
build customer relationships
Capture value from
customers in return
Design a customer-
driven marketing
strategy
Build profitable
relationships and create
customer delight
Construct a
marketing program
that delivers superior
value

57. Customer Relationship
)Management )CRM
The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction
Customer Perceived Value
Customer’s evaluation of the difference between
all the benefits and all the costs of a marketing
offer relative to those of competing offers
Customer Satisfaction
Extent to which a product’s perceived
performance matches a buyer’s expectations
Actual performance > expectations  satisfied

58. A Simple Model of the Marketing
Process
Understand the
marketplace and
customer needs
and wants
Capture value from
customers to create
profits and customer
equity
Create value for customers and
build customer relationships
Capture value from
customers in return
Design a customer-
driven marketing
strategy
Build profitable
relationships and create
customer delight
Construct a
marketing program
that delivers superior
value

59. Customer Loyalty and
Profitability
Customer Lifetime Value )CLV)
The value of the entire stream of
purchases that the customer would make
over a lifetime of patronage
Share of Customer
The share of a company gets of the
customer’s purchasing in their product
categories
Customer Equity
The total combined customer lifetime
values of all of the company’s customers

60. Customer Relationship Groups
Projected loyalty
High
Profitability
Low
Long-term
customers
Short-term
customers
Good fit between
company’s offerings and
customer’s needs; high
profit potential
Limited fit between
company’s offerings and
customer’s needs; low
profit potential
Little fit between company’s
offerings and customer’s
needs; lowest profit
potential
Good fit between
company’s offerings and
customer’s needs; highest
profit potential
Strangers
Butterflies True Friends
Barnacles

61. Marketing in Action
To keep customers coming back, Stew Leonard’s has
created the “Disneyland of dairy stores.”
Focus on Customer Lifetime Value

62. Let’s apply
Companies measuring customer lifetime value
determine the potential profit from the stream of
purchases a customer makes throughout a lifetime of
patronage.
When banks began tracking the profitability of
individual customers, some found that a subset of
their customers actually cost them money, rather
than generating profits.
Should banks “fire” their unprofitable customers?
What are the consequences of such an action?
How might considering the lifetime value of a customer
impact a bank’s perspective on these customers?
How might eliminating unprofitable customers affect a
bank’s customer equity both positively and negatively?

63. So, What is Marketing?
.…Pulling it all together

64. A Simple Model of the
Marketing Process

65. A Simple Model of the Marketing
Process
Understand the
marketplace and
customer needs
and wants
Capture value from
customers to create
profits and customer
equity
Create value for customers and
build customer relationships
Capture value from
customers in return
Design a customer-
driven marketing
strategy
Build profitable
relationships and create
customer delight
Construct a
marketing program
that delivers superior
value

66. Expanded Model of the Marketing Process

67. New Marketing Landscape
Rapid Globalization
Ethics and Social Responsibility
Not-for-Profit Marketing
New World of Marketing Relationships

68. 1.Define marketing and the marketing process.
3.Explain the importance of understanding customers and
identify the core marketplace concepts.
5.Identify the elements of a customer-driven marketing
strategy and discuss the marketing management
orientations.
7.Discuss customer relationship management and
creating value for and capturing value from customers.
9.Describe the major trends and forces changing the
marketing landscape.
Rest Stop: Reviewing the
Concepts