marketing for the 21st century

INTRODUCTION

DEFINING MARKETNG FOR THE 21ST CENTURY

http://www.umt.edu.pk

THE WORLD OF MARKETING

• IMPORTANCE OF MARKETING• THE SCOPE OF MARKETING• COMPONY ORIENTATION TOWARDS

THE MARKET PLACE• FUNDAMENTAL MARKETING

CONCEPTS, TRENDS AND TASKS

IMPORTANCE OF MARKETING IN YOUR LIFE

• Marketing is a large part of your daily life. Consumers are exposed to 3,000 commercial messages a day.

• Studying marketing will make you a better-informed customer.

• Marketing probably relates -- directly or indirectly -- to your career aspirations.

Defining MarketingAn organizational function and a set of processes for

creating ,communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

• Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. (KOTLER)

• Marketing is about managing profitable customer relationships– Attracting new customers– Retaining and growing current customers

• The process of building profitable customer relationships by creating value for customers and capturing value in return

– An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Marketing Management

• Marketing management is the art and science of choosing target markets and building profitable relationships with them.– This definition must include answers to two

questions:• What customers will we serve?• How can we serve these customers best?

What Can Be Marketed?

From serious goods and services to fun things– Goods and services mirror changes in popular

culture – Marketing messages may communicate myths

of a culture Product: any good, service, or idea

– Consumer goods/services– Business-to-business goods/services– Not-for-profit marketing– Idea, place, and people marketing

Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Communication

Information

Manufacturermarkets

Services,Services,moneymoney

Governmentmarkets

Services,Services,moneymoney

ServicesServicesServices,Services,

moneymoney

TaxesTaxes

Taxes,Taxes,goodsgoods

MoneyMoney MoneyMoney

Consumermarkets

IntermediarymarketsGoods, servicesGoods, services Goods, servicesGoods, services

ResourcesResources ResourcesResourcesResourcemarketsMoneyMoney MoneyMoney

Structure of Flows

Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-

Customers Custom

Evolving Views of Marketing’s Role

a. Marketing as anequal function

FinanceProduction

Marketing Humanresources

b. Marketing as a moreimportant function

Finance

Humanresources

Marketing

Production

c. Marketing as themajor function

Marketing

Finance

resources

Production

d. The customer as thecontrolling factor

Customer

resource

FinanceProduction

Marketing

e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

resources Finance

DIFFERENCES BETWEEN MARKETING AND SELLING.

• Marketing is the process of determining customer wants and then developing a product to satisfy that need and still yield a satisfactory profit. It is externally focused.

• Selling is producing a product and then trying to persuade customers to purchase it -- in effect, trying to alter consumer demand. It is internally focused.

QUALITY IN MARKETING

• Quality has three dimensions– Meeting and striving to exceed

customers’ requirements.– The absence of variation.– Total organizational commitment.

• The best indicator of quality is customer satisfaction.

Core Concepts of Marketing

Product or Offering Value and Satisfaction

Needs, Wants, and Demands

Exchange and Transactions Relationships and Networks

Target Markets & Segmentation

Marketing Channels Supply Chain Competition

Marketing Environment

Understanding the Marketplace

• Needs, wants, and demands• Marketing offers: including

products, services and experiences

• Value and satisfaction • Exchange, transactions and

relationships• Markets

• Need– State of felt deprivation– Example: Need food

• Wants– The form of needs as shaped

by culture and the individual– Example: Want a chicken

karahe

• Demands– Wants which are backed by

buying power

Core Concepts

Marketing Is about Meeting Needs

• Meeting the needs of diverse stakeholders– Buyers, sellers, investors, community

residents, citizens.• Marketing concept

– Identifying consumer needs and providing products that satisfy those needs

• The modern marketplace – a mall, a mail-order catalog, a TV shopping

network, an eBay auction, or an e-commerce Web site

Core Concepts• Marketing offer

– Combination of products, services, information or experiences that satisfy a need or want

– Offer may include services, activities, people, places, information or ideas

• Value– Customers form expectations

regarding valueValue proposition includes the

whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself– The ratio of costs to benefits

• Satisfaction– A satisfied customer will buy

again and tell others about their good experience

Core Concepts

Value and Satisfaction• Perceived Value

– The customer’s evaluation of the difference between benefits and costs.

– Customers often do not judge values and costs accurately or objectively.

Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itselfCustomer Satisfaction– Product’s perceived performance relative to customer’s

expectations.

• Exchange– The act of obtaining a

desired object from someone by offering something in return

– One exchange is not the goal, relationships with several exchanges are the goal

– Relationships are built through delivering value and satisfaction

Core Concepts

• Market– Set of actual and potential

buyers of a product– Marketers seek buyers that

are profitable

Core Concepts

The Evolution of Marketing

• Production concept• Product concept

• Selling concept • Marketing concept

• Societal marketing conceptSocial marketing concept: satisfy customers’ needs and also benefit society Sustainability: meeting present needs and ensuring that future generations can meet their needs

Marketing Orientations

Some industries and organizations remain at the production-orientation stage.

PRODUCTION ORIENTATION

PRODUCTION ORIENTATION SALES ORIENTATION

Other industries and organizations have progressed only to the sales-orientation stage.

Many industries and organizations have progressed to the marketing-orientation stage.

PRODUCTION ORIENTATION

SALESORIENTATION

MARKETING ORIENTATION

Late 1800s Early 1930s Mid-1950s 1900s

Production Concept

Product Concept

Selling Concept

Marketing Concept

Consumers prefer products that are widely available and inexpensive

Consumers favor products that offer the most quality, performance,

or innovative features

Consumers will buy products only ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

Company Orientations Towards the Marketplace

Market Integratedmarketing

Profits throughcustomer

satisfactionCustomer

(b) The marketing concept

Factory Existingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a) The selling concept

Customer Delivered Value

Marketing as an Organizational Philosophy

MarketingPhilosophy

SellingPhilosophy

ProductionPhilosophy

InternalFocus

ExternalFocus

The Four PsThe Four Ps

MarketingMix

Product

Price Promotion

The Four Cs

CustomerSolution

CustomerCost

Communication

Conven-ience

MARKETING MIX

1. PRODUCT: A good, service, idea to satisfy the consumer’s need.

2. PRICE: What is exchanged for the product.3. PROMOTION: Means of communication

between the seller and buyer.4. PLACEMENT: Means of getting the product to

the consumer.5. POSITIOINING: Developing a marketing

strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition.

The Marketing Plan

• Transforms the marketing strategy into action.

• Includes the marketing mix and the 4P’s of marketing– Product– Price– Place– Promotion

Building Customer Relationships• CRM – Customer relationship

management • Delighting the Customer• The overall process of building and

maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.

Capturing Value from Customers

• Customer Loyalty and Retention

• Share of Customer• Customer Equity

• Customer delight leads to emotional relationships and loyalty

• Customer Lifetime Value shows true worth of a customer

Key ConceptsKey Concepts

• Share of customer’s purchase in a product category.

• Achieved through offering greater variety, cross-sell and up-sell strategies.

• Share of customer’s purchase in a product category.

• Achieved through offering greater variety, cross-sell and up-sell strategies.

• The combined customer lifetime values of all current and potential customers.

• Measures a firm’s performance, but in a manner that looks to the future.

• Choosing the “best” customers is key

Contemporary Marketing Framework

Marketing

Global

Relationship

Productivity

Customer Value

Ethics

Entrepreneurship

Technology

Transaction Versus Relationship Marketing

Long-Term Focus

“We” Oriented

Short-Term Focus

“Me” Oriented

Focus on Results

Emphasize Persuading

A Contest

Manipulation

Conflict

Transaction Marketing Relationship Marketing

Focus on Profits

Emphasize Helping

A Service

Cooperation

Go to the website of University Of Management and Technology,

Lahore Pakistan

www.umt.edu.pk

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