The document discusses key concepts in marketing management. It defines marketing as building profitable relationships with target customer segments through understanding customer needs and delivering value. A successful marketing strategy requires selecting target customer segments and determining the value proposition - the benefits delivered to satisfy customers. Companies must choose a marketing orientation such as production-oriented, product-oriented, or customer-oriented to guide their strategies. The customer-oriented marketing concept focuses on understanding customer needs rather than just production or selling.

1. Soft ware marketing
Chapter 1
Defining Marketing and the marketing
process

2. Designing a customer driven marketing strategy
 Marketing Management:
The art and science of choosing target markets and
building profitable relationships with them. Simply put
it is customer management and demand
management.
To design a winning marketing strategy the marketing
manager must answer two important questions:
1. What customers will we serve (target market)
2. How can we serve these customers best? (what is
the value proposition)

3. Selecting customers to serve
 Divide the market into segments of customers
(market segmentation)
 Then decide which segment will you target
 If you try to serve all customers you will end up not
serving anyone in particular which will lead to
dissatisfaction among consumers.
 Some marketers may even seek fewer customers
and a reduced demand for their product/service.

4. Selecting customers to serve
 E.g. Many power companies have trouble meeting
demand during peak usage periods.
 In such cases of excess demand companies may
practice demarketing to reduce the number of
customers or shift the demand temporarily.
 E.g. To reduce the demand for space on congested
expressways in Washington D.C., the metropolitan
council of government has set up a website
encouraging commuters to carpool.

5. Choosing a value proposition
 Company must also decide on how it will serve its
targeted consumers- how it will differentiate and
position itself in the market place.
 A company’s value proposition is the set of benefits
or values it promises to deliver to satisfy consumers.
 Such value proposition differentiates one brand from
another
e.g. Red bull energy drink helps you fight mental and
physical fatigue. It captures 70% of the energy drink
market by promising ‘it gives you wings!’

6. Marketing management orientations
 What philosophy should drive successful marketing
strategies?
 What weight should be given to the interests of
customers, the organization, and the society. Often these
interests conflict.
 There are 5 alternative concepts under which
organizations design and carry out their marketing
strategies
1. The production
2. Product
3. Selling
4. Marketing
5. Social marketing

7. The production concept
 The idea that consumers will favour products that
are available and highly affordable and that the
organization should therefore focus on improving
production and distribution efficiency.
 E.g. Computer maker Lenovo dominates the highly
competitive price sensitive Chinese PC market
through low labour costs, high production efficiency
and mass distribution.
 Although useful in some situations the production
concept can lead to marketing myopia. Good or
bad?

8. The product concept
 The idea that consumers will favour products that
offer the most quality, performance and features and
that the organization should therefore devote its
energy to making continuous product improvements.
 Some producers however think that if they can build
a better ‘mousetrap’ consumers will come to their
door themselves. This can lead to marketing myopia.
 Companies need to design, package and price the
product attractively.

9. The selling concept
 The idea that consumers will not buy enough of the
firm’s products unless it undertakes a large scale
selling and promotion effort.
 This concept is typically practices with unsought
goods--------Those that buyers usually do not think of
buying such as insurance or blood donations.
 Such aggressive selling however carries high risks. It
focuses on sales transactions rather than on building
trustworthy long term profitable relationships

10. The selling concept
 Poor assumptions:
 This concept assumes that customers who are
coaxed into buying the product will also like it.
 Or the consumers who do not like the product will
forget their negative experience and return to
purchase the product once again.
 Consumers will not spread negative word of
mouth regarding your product to other potential
customers.