1 Principles of Marketing Managing Profitable Customer Relationship

What Is Marketing? Marketing Defined Marketing is the process of satisfying a realized/unrealized need while taking care of organizational profitability and societal concern. Marketing consists of activities designed to facilitate exchanges intended to satisfy human or organizational needs or wants

Marketing : The process by which companies can create value for customers and build strong customer relationships in order to capture value from customers in return.

The marketing process Under stand the market place and customer needs and wants Design a customer – driven marketing strategy Construct a marketing program that deliver superior value Build profitable relationships and create customer delight Capture value from customer to create profits and customer quality

n Exchange : The act of obtaining a desired object from someone by offering something in return .

Conditions for marketing exchange n n Two or more people or organizations must be involved, and each must have need and want to be satisfied. The parties to the exchange must be involved voluntarily. Each party must have something value able to exchange, and each must believe that it will benefit from the exchange. Parties must communicate each other and provide awareness and information without these there is no exchange.

Understanding the Marketplace and Customer Needs and Wants • • • Needs can be viewed in a strict physiological sense —food, clothing, safety shelter Wants with every thing else defined as want, wants are the form that needs take as they are shaped by culture and individual personality Demands human wants that are backed by buying power

Understanding the Marketplace and Customer Needs Market offerings are some combination of products, good, services, idea information, or experiences offered to a market to satisfy a need or want. Markets is a physical place where buyers and sellers gathered to buy and sell goods Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system

Key consumer markets n n n Consumer markets Business markets Global markets Nonprofits and government markets Market place , market space and meta market

Key consumer markets n n Consumer markets Companies selling mass consumer goods and services such as soft drinks air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image. Business markets Companies selling business goods and services often face well trained and well informed professional buyers who are skilled in evaluating competitive offering. Business buyers buy goods in order to make or resell a product to others at a profits

n n Global markets companies selling goods and services in the global market place , they must decide which countries to enter, how to enter each country as exporter, licence, joint venture, partners etc. how to adapt their product and service feature, how to adapt their communication to fit different culture. Nonprofits and government markets companies selling their goods to non profit organizations such as

n n churches, universities, charitable organizations or government agencies need to price carefully because these organizations have limited purchasing power Market place , market space and meta market Market place: Market place is physical as when you shop in the store. Market space: market space is digital as when you shop on the internet.

n Metamarket: it is describe as cluster of complementary products and services that are closely related in the minds of the consumers but are spread across a diverse set of industries.

n Marketing management : The art and science of choosing target markets and building profitable relationships with them

company orientation toward the market place Marketing Management Orientations The competing concepts under which organization have conducted the marketing activities include. • • • Production concept Product concept Selling concept Marketing concept Holistic concept Societal concept

Designing a Customer-Driven Marketing Strategy Production concept is the oldest concept in business. It holds that consumer will prefer products that are widely available and inexpensive. Managers of production oriented business concentrate on achieving high production efficiency , low costs and mass distribution.

Designing a Customer-Driven Marketing Strategy Product concept : Holds that consumer will favor products that offer the most quality, performance, and innovative features for which the organization should therefore devote its energy to making continuous improvements over time

Designing a Customer-Driven Marketing Strategy Selling concept: is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort. The selling concept is practiced most aggressively with unsought goods , goods that customers do not think of buying such as insurance

Marketing concept holds that the key to achieving organizational goals consist of the company being more effective than competitors in creating , delivering and communicating superior customer value to its chosen target markets

n Holistic marketing concept is based on the development , design and implementation of the marketing programs processes, and activities that organizes their breath and interdependencies. Four components of holistic marketing n Relationship marketing n Integrated marketing n Internal marketing n Social responsibility marketing

n n n Relationship marketing Customer s Channels Partners Internal marketing Marketing development Senior management Other departments

Integrated marketing n Communication n Product &services n Channels Social responsible marketing n Ethics n Environment n Legal n community

Societal marketing concept calls upon marketers to build social and ethical consideration into their marketing practices. societal marketing concept consider consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests

Preparing an Integrated Plan and Program Marketing Mix The marketing mix is the set of tools (Seven Ps) the firm uses to implement its marketing strategy • Product People • Price Physical evidence • Promotion process • Place

• • Product: To deliver on its value proposition the firm must first create a need satisfying marketing offer (product) Product variety , Quality, Design , features, Brand name Packaging , Sizes, warranties, returns. Price: it must decide how much it will charge for the offer (price) List price , Discount , Allowances , payments period, Credit terms Promotion: Sales promotion , advertising, sales force, public relation, direct marketing Place : how it will make the offer available to target consumer channels, coverage, location inventory, transport

n n People: It involves all employees regular and permanent and contractors. Physical evidence: physical environment giving evidence for particular look , cultural evidence. Process: It involve manufacturing and delivering products to the customers

How business and marketing are changing n n n n n Changing technology Globalization Deregulation Privatization Customer empowerment Customization Competition Industry convergence Retail transformation disintermediation

n n Changing technology : The digital revolution has created an information age. The information age promises to lead to more accurate levels of production, more targeted communication and more relevant pricing. More over much of today's business is carried on over electronic networks such as intranet, extranets, and the internet. Globalization: Technological advances in transportation, shipping and communication have made it easier for companies to market in other countries and easier for consumer to buy products and services from marketers in other countries

n n Deregulation Many countries have deregulated industries to create greater competition and growth opportunities. For example in united states long distance telephone companies can now compete in local markets and local phone companies can now offer long distance. Privatization: Many countries have converted public companies to private owner ship and management to increase their efficiency.

n n n Customer empowerment: Customers increasingly expect higher quality and service and some customization. they are more and more time starving and want more convenience. Customization: The company is able to produce individually differentiated goods whether ordered in person , on the phone , or online. By. going online companies essentially enable consumers to design their own goods.

n n n Competition: Brand manufacturers are facing intense competion from domestic and foreign brands , which in resulting in rising promotion costs and shrinking profit margins Industry convergence: Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries Retail transformation: small retailers are succumb to the growing power of giant retailers and category killers. store base retailers are facing growing competition from catalog houses, direct mail firms news paper, magazine , and T. V direct to customer ads, home shopping.

n Disintermediation: The amazing success of early online dot. com such as AOL, OLX, amazon, yahoo, e. Bay and dozens of others who created disintermediation in the delivery of products and services.

Building customer relationship n Customer relationship management (CRM): The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Building Customer Relationships Customer Relationship Management (CRM) Customer perceived value is the difference between total customer value and total customer cost Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations 1 -27

Building Customer Relationships The Changing Nature of Customer Relationships Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers Relating for the long term uses customer relationship management to retain current customers and build profitable, long-term relationships Relating directly uses direct marketing tools (telephone, mail order, Internet) to make direct connections with customers 1 -29

Building Customer Relationships Partner Relationship Management Partner relationship management refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers 1 -30

Building Customer Relationships Partner Relationship Management Partners inside the company is every function related to interacting with customers • Electronically • Cross-functional teams Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships 1 -31

Building Customer Relationships Partner Relationship Management Supply chain is a channel that stretches from raw materials to components to final products to final buyers • Supply management • Strategic partners • Strategic alliances 1 -32