chapter one marketing

1. Principle of
marketing
Chapter one
Marketing and
customer value
Lucture: mr
khadar
Mohamed
abdulle

2. Chapter Outline
1.1 Marketing and the Marketing Process
1.2 The Marketing Mix and the 4Ps of Marketing
1.3 Factors Comprising and Affecting the
Marketing Environment
1.4 Evolution of the Marketing Concept
1.5 Determining Consumer Needs and Wants
1.6 Customer Relationship Management (CRM)
1.7 Ethical Marketing

3. 1.1 Marketing and the Marketing Process
When you ask a group of people, “What’s
marketing?” most people will answer “advertising”
or “selling.” It’s true that both of these functions are
part of marketing, but marketing is also so much
more. The American Marketing Association (AMA)
defines marketing as “the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large.”

4. 1.1 Marketing and the Marketing Process
• At its most basic level, marketing is made up of every
process involved in moving a product or service from
the organization to the consumer. It includes discerning
the needs of customers, developing products or services
to meet those needs.
• Marketing can also be defined as the set of activities
involved in:
1. identifying customer needs.
2. anticipating customer needs
3. Satisfying customer needs
4. profitability

5. How Marketing Benefits the Organization, Its
Interested Parties, and Society
Interested parties are those persons or entities that
have an interest in the success or failure of a
company. these people and groups referred to as
“stakeholders”
two types of parties: external and internal.
• Employees
• Shareholders
• Managers
• Owners
Internal
parties

6. External parties
• Customers
• Suppliers
• Government
• Creditors
• Society
External
parties

7. External parties
•Marketing’s primary benefit to society is that it
drives the consumer economy. Marketing leads to
increased sales and revenue for a business which
enables them to expand operations, create more
internal jobs and external jobs for partners like
suppliers. Marketing also contributes tax revenue to
local, state, and federal governments, ultimately
leading to overall economic growth.

8. Steps in the Marketing Process
1. Understand the marketplace and your customers.
2. Develop customer-driven marketing strategy.
3. Deliver high customer value.
4. Grow profitable costumer relations.
5. capture value from costumer.
customer value is the ratio between the perceived benefits
and costs incurred by the customer in acquiring your products
or services.

9. 1.2 The Marketing Mix and the 4Ps of
Marketing
The marketing mix is commonly referred to as the tactics a company
can use to promote its products or services in the market in order to
influence consumers to buy. The marketing mix is also known as the
4Ps: product, price, place, and promotion.
1. The product is the good or service that the company provides.
2. The price is what the consumer pays in exchange for the product.
3. The place is where the product is purchased.
4. Promotion is comprised of advertising, sales, and other
communication efforts the company utilizes to attract the customer

10. 1.3 Factors Comprising and Affecting the
Marketing Environment
marketing environment is comprised of both the external and
internal factors and forces that influence an organization’s
decision regarding its marketing activities.
Organizations don’t operate in a vacuum. They’re not self-
contained, self-sufficient machines; rather, they are complex
systems that require interaction of both their internal and
external environments in order to survive and prosper. In this
section, we’re going to explore the internal and external
factors that drive an organization’s marketing activities.

11. The Components of the Marketing
Environment
•5m framework
•Organizational culture
Internal
•Micro environment
•Macro environment
External

12. Internal environments
• The five elements (sometimes known as the organization’s
assets) include minds, minutes, machinery, materials, and
money.
1. Minds (Staffing): This might well be considered the most
important factor because it’s people who make sure the rest
of the 5Ms are utilized in a productive manner to achieve the
goals of the organization.
2. Minutes (Time): Time is another valuable asset. We’ve all
heard the saying that time is money, and this is true within
the marketing arena.

13. Internal environments
3. Machinery (Equipment): Machinery consists of the
equipment and/or physical assets used to process materials
into finished or semi -finished products.
4. Materials (Production): Materials consist of the inputs
needed to produce goods and services.
5. Money (Finance): Perhaps second only to staffing, money
is a very critical resource because it’s used to acquire and/or
hire other resources.

14. Internal environments
• Organizational culture is comprised of the shared values,
attitudes, expectations, norms, and practices that guide the
actions of all within the company. Think about organizational
culture as “the way we do things around here,” and the
culture can help or hinder an organization.

15. External environments
Micro
environments
Suppliers
Competitors
Customer
General
public
Market
intermediar
y

16. External environments
• Obviously, marketers can’t ignore what’s going on in the
external environment. One of the tools used by companies to
assess the environment in which they are operating is a
PESTLE analysis. PESTLE is an acronym for political, economic,
social, technological, legal, and environmental factors.
• These macro environment factors can be used to understand
current external influences so that marketers can more easily
identify what might change in the future, mitigate the
identified risks, and take advantage of competitive
opportunities .

17. External environments
1. Political
factors
new tax
Trade tariffs
Fiscal policy
2. Economic
factors
Inflation rates
Interest rate
Foreign
exchange rate
3. Social
factors
Demographic
Cultural
trends
Population
analytics
4.Technological
factors
Innovation in
technology
Research and
development
5. Legal
factors
Consumer
laws
Labor laws
Safety
standard
6.Environmen
tal factors
Climate
Geographical
location
Stakeholders
and customer
values

18. External environments
• Economic Factors. Economic factors play a huge role in
terms of a company’s prospects in a market. For example,
economic factors affect pricing and can even influence the
supply/demand curve for a product or service. For example,
high inflation causes consumers to have less spending
power.
• Social Factors. Social factors take in a wide swath of
elements, such as cultural norms and expectations, health
consciousness, population growth/decline, the age
distribution of a population.

19. External environments
• Legal Factors. These factors include changes to legislation
impacting employment, industry regulation, licenses and
permits, and intellectual property.
• Environmental Factors. environmental factors refer to
variables affecting the physical environment, like climate
change, pollution, the scarcity of raw materials.

20. External environments
• Political Factors. These factors include environmental and
trade restrictions, political stability, and business policy such
things as lower housing costs and tax rates and fewer
regulations, making it easier for companies to operate in
world.

21. 1.4 Evolution of the Marketing Concept
Production
concept
Product
concept
Selling concept
Marketing
concept
Societal
marketing
concept

22. Production concept
The production concept assumed that consumers were mostly
interested in product availability and price, not necessarily
product features. As a result, companies concentrated on high
production, low costs, and mass distribution.
The Product Concept
from the 1920s until the 1950s, the product concept dominated.
With product availability a thing of the past, consumers began to
favor products that offered quality, performance, and/or
innovative features. As a result, companies concentrated on
making superior products and improving them over time

23. Selling concept
• Marketing evolved from simply producing products that
customers wanted to trying to persuade customers to buy
through advertising and personal selling. The basic premise
of the sales concept was that consumers and businesses
need to be “coaxed” into buying, and the aim of companies
was to sell what they made rather than make what
consumers wanted.

24. The Marketing Concept
• The marketing concept was built on the premise that an
organization will achieve its goals when it satisfies.
the needs and wants of the consumer. As a result, firms began
to focus on customer needs before developing products,
rather than developing products and then trying to “sell” them
to consumers. The marketing concept was also the start of
relationship marketing— fostering long-term relationships with
customers in order to ensure repeat sales and achieve stable
relationships

25. Societal marketing concept
• The societal marketing concept is simple. Companies make good
marketing decisions by considering not only consumers’ wants
and needs but additionally the balance between those wants and
needs and the company’s capabilities and society’s long-term
interests. The concept emphasizes the social responsibilities that
companies bear. This means meeting consumers’ and businesses’
current needs being aware of the environmental impact of
marketing decisions(Corporate Social Responsibility (CSR)

26. 1.5 Determining Consumer Needs and Wants
• You may be asking yourself at this point, “Does marketing
satisfy needs, or does it create needs?” Some people feel
that marketing creates needs and pressures consumers into
buying unneeded products or services. However, marketing
does not create needs; rather, it opens consumers’ eyes to
their wants, and it’s up to marketers to understand those
wants in order to guide consumers on the path to purchasing
their products or services.

27. The Value Proposition
•value proposition identifies the quantifiable
benefits that customers can expect when they
choose to purchase your company’s product or
service. A value proposition is, in effect, a promise
from the company to the customer, and motivate
customers to purchase your company’s products or
services.

28. The Exchange Process
Seller
Payment
Product
/service
Buyer

29. • buyer a person or institution that purchases goods or
services.
• consumer the final user of a purchased product or service.
• customer a person who purchases a product or service.
• seller the individual or organization that supplies the need-
satisfying product, service, or experience.
• wholesalers companies that purchase large quantities of
products from producers and then sell to smaller businesses,
such as retail stores.
• retailers companies that purchase large quantities of goods
from producers and then sell smaller quantities to end
customers for personal use or consumption

30. 1.6 Customer Relationship Management
(CRM)
• In the final analysis, companies want to accomplish two
things: improve customer service relationships and improve
customer retention. It is typically easier and less expensive to
retain a loyal customer than acquire a new one.
• Leveraging Customer Data. With a business can gather data
on your existing customers For example, you can keep track of
important dates such as customer birthdays or purchase
anniversaries, and CRM software can send automatic emails
to them with coupons or other incentives.

31. 1.6 Customer Relationship Management
(CRM)
•Enhanced Customer Communications. CRM software
can be programmed to automatically send thank you notes
to customers.
• ascertaining Customer Needs. Fostering customer loyalty
begins with understanding what your customers want and
need. An effective CRM program can track customers’
purchase history, habits and preferences, and even web and
email interaction.

32. 1.6 Customer Relationship
Management (CRM)
• customer loyalty. an ongoing positive relationship between
a customer and a business.
• customer retention. the ability of a company to turn
customers into repeat buyers and prevent them from
switching to a competitor.
• ethical marketing. process that emphasizes trustworthy,
transparent, social, and culturally sensitive marketing policies

33. 1.7 Ethical Marketing
• ethical marketing involves companies not only trying to
market their products and services but considering how
society will benefit from the introduction of those offerings.
It’s not so much a practice as it is a philosophy that tries to
promote fairness, honesty, and a sense of responsibility in all
of the marketing done by the company.
1. Ensure transparency.
2. Respect data privacy.
3. prioritize the concerns of the consumer