Chapter 1 introduction

1. Session 1

2. After this session, Students will be able to
learn
• What is Marketing
• Understanding the marketplace
• Why Marketing
• Some fundamental concepts of marketing
• Scope of Marketing
• What are the different domains of
Marketing
• The transition of Marketing in 21st Century
Session Objectives

3. Consumers’ Problems
Needs
Needs are the states of felt deprivation e.g. thirst
(water), Hunger (food) etc
Wants
Wants are the alternatives to satisfy the needs
Preferences
The criterion of priority for one product on the
other
Demand
Wants backed by buying power, or willingness to
buy and ability to buy

4. Value
The ability of a product
to satisfy a need
effectively for which it is
developed
 Customers form
expectations regarding
value
 Marketers must deliver
value to consumers
Customer
perceived value:
The difference between
total customer value
and total customer cost
Customer Life
Time Value:
The value of the
customers entire stream
of purchases over a
lifetime of support
Share of
customer: The
portion of the
customer’s purchasing
that a company gets in
its product categories
Customer Equity:
The total combined
customer lifetime
values of all of the
company’s customers

5. Sharing Value with Customers
Customer relationship
management (CRM)
The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer values and satisfaction.
Customer Satisfaction
The extent to which a
product’s perceived
performance
matches a buyer’s expectation.
Customer Dissatisfaction
The extent to which a
product’s perceived
performance recedes a
buyer’s expectation
Customer Delight
The extent to which a
product’s perceived
performance exceeds a
buyer’s expectation

6. Value Delivery Process
Exchange
Process by which one or more
parties give something of value
to each other to satisfy
perceived needs
Transaction
A physical/actual trade of values
between two or more parties
• Monetary Trade
• Barter Trade
Transfer
A one way trade in which one
party gives something to another
and takes nothing in exchange
e.g. gifts, charities

7. What Marketing is

8. Producer
/Seller
Communication
Product/Service
Money
Feedback
Consumer
Marketing
The process of developing and maintaining profitable
customer relationship.

9. a. Customer Needs, Wants, and Demands
b. Market Offerings (Products and Services)
c. Value and Satisfaction
d. Exchanges and Relationships
e. Markets
1. Understanding the Marketplace and
Customer Needs

10. • Market offerings are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want
• Marketing myopia is focusing only on existing
wants and losing sight of underlying consumer
needs
• Short sightedness by business firms causing
management to define their business too
narrowly)
b. Market Offerings (products and services)

11. a. Customer Needs, Wants and Demands
Customer Needs, Wants, and Demands
• Need
●
State of felt deprivation
• Wants
●
The form human needs
take as shaped by culture
and individual personality.
• Demands
●
Wants which are backed by
buying power

12. Product
A market offering (tangible or intangible) that can be
offered in a market for attention, acquisition, use, or
consumption that might satisfy a need or a want valuably.
Produce
Experience
Idea
Property
Intellectual
Property
Services
Any benefit or activity that one party can offer to
another, that is essentially intangible and do not occur
in transfer of ownership
Product Support Services
A market offering that is the combination of both Product as well as Services

13. c. Value and Satisfaction

14. Exchange is the act of obtaining a desired
object from someone by offering something in
return
d. Exchanges and Relationships

15. Markets are the set of actual and
potential buyers of a product
e. Markets

16. 2. Designing a Customer-Driven Marketing
Strategy

17. 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?

18. How to Design Winning Marketing
Strategy
Market segmentation refers to dividing the markets into
segments of customers
Target marketing refers to which segments to go after
Demarketing is marketing to reduce demand temporarily
or permanently; the aim is not to destroy demand but to
reduce or shift it.

19. Marketing Management
Orientations

20. Production Concept is the idea that consumers will
favor products that are available or highly affordable
Product Concept is the idea that consumers will favor
products that offer the most quality, performance, and
features. Organization should therefore devote its energy to
making continuous product improvements.
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
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
Societal : concept is the idea that a company should make good
marketing decisions by considering consumers’ wants, the
company’s requirements, consumers’ long-term interests, and
society’s long- run interests

21. 3. 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.

23. Customer Relationship Management (CRM)
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
4. Building Customer Relationships

24. Relationship Building Blocks: Customer Value
and Satisfaction

25. 5. Capturing Value from Customers
Creating Customer Loyalty and Retention
•Customer lifetime value is the value of
the entire stream of purchases that
the customer would make over a
lifetime of patronage.

26. Growing Share of Customer
Share of customer is the portion of
the customer’s purchasing that a
company gets in its product
categories.
Customer Equity is the total combined
customer lifetime values of all of the
company’s customers.

27. Building Customer Equity
•Building the right relationships with
the right customers involves treating
customers as assets that need to be
managed and maximized
•Different types of customers
require different relationship
management strategies
– Build the right relationship with the
right customers

28. Building the Right Relationships
with the Right Customers
High
Profitability
Low
Long-term customers
Short-term customers
Strangers
Little fit between
company’s offerings
and customer’s
needs; lowest profit
potential
Butterflies
Good fit between
company’s offerings
and customer’s
needs; high profit
potential
True Friends
Good fit between company’s
offerings and customer’s
needs; highest profit potential
Barnacles
Limited fit between
company’s offerings and
customer’s needs; low profit
potential
Projected Loyalty