concept and process of marketing_session 01

Ranga GamageMBA (University of Colombo) BSc (University of Moratuwa)

PMP (PMI)

Managerial Diploma in Human Resource Management

Marketing Module Session 01

Concept and Process of Marketing

History of markets & marketing• Marketing existed as soon as goods started to be exchanged. This is

known as bartering. • Bartering is the starting point of Marketing.• The next stage was to avoid the need to exchange goods, by inventing

money.• Growth of markets received a big boost during the industrial

revolution in the 18th and 19th centuries.

Marketing Orientation

• Demand was high• Production oriented • How to produce enough?• Supply factor• Demand for NEEDS

• Supply was high• Marketing oriented• How to increase demand?• Demand factor• Demand for WANTS


History of markets & marketing


Tide knows fabrics best

Chartered Institute of Marketing“Marketing is the management process which identifies, anticipates

and supplies customer requirements efficiently and profitability.”

American Marketing Association“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.”


Definitions

According to Philip Kotler,“Marketing is a social & managerial process by which individuals and groups obtain

what they need and want through creating and exchanging values with others”


Definitions

• NEED : A state of felt deprivation of some basic satisfaction ( Food, Clothing, Shelter, Belonging etc. )

• WANTS : Wants are desires for specific satisfiers of the deeper needs. Needs are few and wants are many.

• DEMAND : are wants backed by Ability to buy, Willingness to buy and Ready to buy.


Needs, Wants and Demand

• Anything that can be offered to the market to satisfy a need or want is a product .• Product refers to physical object • Services refer to intangible object

• Value is the customers’ estimate of the Product’s capacity to satisfy a set of goals

• Value is the ratio between what the customer gets and what he gives (V=B/C)

• WHEN :

• Customer Expectation=Performance (satisfied)

• Customer Expectation>Performance (dis-satisfied)

• Customer Expectation<Performance (Highly satisfied)


Products and Services / Value and Satisfaction

The Marketing concept is the attitude that business decisions should be based on WHAT CONSUMER WANTS.

Marketing Myopia:

• Paying more attention to the specific products a company offers than to the benefits and experiences produced by these products

• Will be in trouble if new product comes along that serves customer needs better and less expensive

Group Activity: Think of two companies, one which has taken in account the marketing concept and one which has not. Give reasons for your selection.


The Marketing Concept


A Modern Marketing System

• “With out customer, you don’t have a business” • Satisfying customer needs at profit• A service offered by companies that focuses on the internal and

external needs of a business's customers. • Consumer orientation establishes and monitors standards of

customer satisfaction and strives to meet the customer's needs and expectations related to the product or service sold by the business.


Customer orientation

• Always be compared with competitor• Constantly reassesses the strengths and weaknesses relative to

competitors• A performance evaluation may include production efficiency, pricing,

delivery times, customer satisfaction, innovation, employee retention and market share


Competitor Orientation

• The set of benefits or values promises to deliver to consumers to satisfy their needs• Value proposition differentiate one brand from another• BMW – the ultimate driving machine• Nokia – connecting people, anyone, anywhere


Value Proposition


Difference between selling & marketing concept

• Product • Place• Price• Promotion• People • Process • Physical evidence


Marketing Mix

• Marketing Management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving Organizational objectives.


Marketing Management ????

• The only true measure of competitive advantage is long term profitability. • Competitive advantage depend on the management of both costs and revenues.• Creating value for customers both incurs costs and generates revenues.• Customer value = perceived benefits – perceived sacrifice

Customer Focus

Competitive advantage and marketing orientation

What is competitive advantage???

• Cost Leadership

• Differentiation

• Perceived benefits fall into four categories• Product benefits – Product’s physical features• Service benefits – Customer service• Image benefits – Consumption of product enhance their personal image• Relational benefits – value relationship with the supplier (convenience,

reliability, helpfulness, trust)

• The customer’s perceived costs• Monetary, time, and energy costs• Psychological costs – risk associated with buying decision

Customer Focus

Competitive advantage and marketing orientation

• Customer care is the provision of service to customers before, during and after a purchase. Accordingly it may vary by product, service, industry and individual customer

• Company needs to address issues of customer care, because of:• Legal constraints• Industry codes of conduct• Keeping existing customer happy is cheaper than acquiring

new ones• The value chain – after sales services

Customer Focus

Customer care

• Relationship marketing is the process of creating, building up and managing long-term relationships with customers, distributors and suppliers. • Connection between seller and buyer are of two types• Transaction – Sale is end of process• Relationship – Sale is not end of process

Customer Focus

Relationship Marketing

Customer Focus

HND Level 5 Unit 04

Relationship Marketing

Projected Loyalty

• Cost of lost customer• Existing customers are profitable because:• They do not have to be acquired • They buy broader range of products• They cost less to serve as they know company's way of

doing business• They become less sensitive to price over time• They can recommend by word of mouth

Customer Focus

Importance of relationship

• Basic Marketing – The salesperson sells to the final customers. This is also known as direct sales.• Reactive Marketing – The sales person sells the product and

encourages the customer to call for any comments or enquiries.• Accountable Marketing – The sales person calls the customers to

ensure whether the product is working as per satisfaction and if there is any problem in the product. Furthermore he also asks the customer for any suggestions / feedback to improve the service / product. Thus he is taking responsibility for the sale.

Customer Focus

Five different levels of customer relationships

• Proactive marketing – The company works continuously with its large customers to help improve performance. This is especially seen in financial companies wherein the movement in the financial market induces the company to make changes regularly. However at the same time, these financial companies have to take care of their customers as well. Thus they take regular feedback from their large customers thereby developing their products accordingly.• Partnership Marketing – The company works continuously with its large

customers to improve its performance. An example would include General Electric which has stationed Engineers to its third party service centers to improve overall performance. Thus even in partnerships GE is ensuring optimal relationship development with the parent brand.

Customer Focus

Five different levels of customer relationships

THANK YOU

concept and process of marketing_session 01

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