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Lecture 2

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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.

Marketers aim at building strong relationships by consistently


delivering superior customer value.

Apple Watch – Dear Apple

Ch 1 - Copyright © 2011 Pearson Education


12
Understanding the Marketplace and
Customer Needs

A market is the set of actual and potential buyers of a


product.

Ch 1 - Copyright © 2011 Pearson Education


13
Designing a Customer-Driven
Marketing Strategy
Marketing Management

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?

Ch 1 -14 Copyright © 2011 Pearson Education


Designing a Customer-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.

Ch 1 -15 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Demarketing is marketing to reduce demand temporarily or
permanently; the aim is not to destroy demand but to reduce
or shift it.

Ch 1 -16 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

The value proposition is the set of benefits or values a


company promises to deliver to customers to satisfy their
needs.

Ch 1 -17 Copyright © 2011 Pearson Education


Which
Customer
segment ?

18
Which customer segment?

19
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal


concept concept concept concept concept

Ch 1 -20 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production concept is the idea that consumers will favor


products that are available and highly affordable.

Ch 1 -21 Copyright © 2011 Pearson Education


Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Product concept is the idea


that consumers will favor
products that offer the most
quality, performance, and
features. An organization
should therefore devote its
energy to making continuous
product improvements.

Ch 1 -22 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

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.

Ch 1 -23 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Marketing concept is the idea that achieving organizational


goals depends on knowing the needs and wants of the target
markets and delivering the desired satisfactions better than
competitors do.

Ch 1 -24 Copyright © 2011 Pearson Education


Difference between Three concepts
Designing a Customer-Driven
Marketing Strategy
The Selling and Marketing Concepts Contrasted

Ch 1 -26 Copyright © 2011 Pearson Education


Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

The societal marketing concept is the idea that a


company’s marketing decisions should consider consumers’
wants, the company’s requirements, consumers’ long-term
interests, and society’s long-term interests.

Ch 1 -27 Copyright © 2011 Pearson Education


Designing a Customer-Driven Marketing
Strategy

Ch 1 -28 Copyright © 2011 Pearson Education


Preparing an Integrated Marketing
Plan and Program

The marketing mix is the set of


tools (four Ps) the firm uses to
implement its marketing strategy.
It includes product, price,
promotion, and place.

Ch 1 -29 Copyright © 2011 Pearson Education


7 Ps Marketing Mix
Booms & Bitner, 1981

FUNCTIONALITY, APPEARANCE,
QUALITY, PACKAGING, BRAND,
Product
WARRANTY,
SERVICE/SUPPORT
Product

INTERACTION BETWEEN AN Physical Price LIST PRICE, DISCOUNTS,


EMPLOYEE AND CUSTOMERS evidence ALLOWANCES,
Physical (E.G. BROCHURES, COMPANY
evidence
Price
STATIONERY, BUSINESS CARDS, FINANCING, LEASING
REPORTS, COMPANY WEBSITE, ETC.) 7 PS OPTIONS
MARKET
ING

Process MIX Place CHANNEL MEMBERS, CHANNEL


MOTIVATION, MARKET
ACTIVITIES, PROCEDURES,
Process Place COVERAGE, LOCATIONS,
PROTOCOLS LOGISTICS, SERVICE LEVELS

People Promotion
CUSTOMER CONTACT ADVERTISING, PERSONAL
EMPLOYEES, CUSTOMERS, SELLING, PUBLIC
People Promotion
PERSONNEL AND RELATIONS, MESSAGE,
MANAGEMENT MEDIA, BUDGET

30
Preparing an Integrated Marketing
Plan and Program

Integrated marketing program


is a comprehensive plan that
communicates and delivers the
intended value to chosen
customers.

CRM Case
Study

Ch 1 -31 Copyright © 2011 Pearson Education

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