Introduction to Marketing

What is Marketing?

Marketing is managing profitable customer relationships.  The goal of this twofold goal of marketing is to attract customers by promising superior value and keep and grow current customers by delivering satisfaction.

MARKETING DEFINED

Today, marketing must be understood not in the old sense of making a sale - " telling and selling" - but in a new sense of satisfying customer needs - making selling unnecessary.

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

MARKETING PROCESS

Understanding the Marketplace and Customer Needs

“The company must fully understand consumers and the marketplace in which it operates"

FIVE CORE CUSTOMER AND MARKETPLACE CONCEPTS

1.     Needs - state of felt deprivation, which includes physical needs such as food, clothing, warmth and safety, social needs for belonging and affection, and individual needs for knowledge and self-expression.

Wants - the form human needs take as they are shaped by culture and individual personality

Demand - human wants that are backed by buying power

2.      Market offerings| Products, Services and Experiences - combination of products, services - activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything, information, or experiences offered to a market to satisfy a need or want

More broadly, market offerings also include other entities, such as persons, places, organizations, information, and ideas.

3.      Value and Satisfaction - satisfied customers buy again and tell others about their good experiences, dissatisfied customers often switch to competitors and disparage the product to others.

4.      Exchange and Relationships - the act of obtaining a desired object from someone by offering something in return, and maintaining profitable relationship through consistently delivering superior customer value.

5.      Markets - set of all actual and potential buyers of a product or service sharing a particular need or want that can be satisfied through exchange relationships.

“In today's digital technologies, from Web sites and online social networks to cell phones, have empowered consumers and made marketing a truly interactive affair.”

 Marketers no longer asking only - 'How can we reach our customers?', but also - 'How should our customers reach us?'.

Designing a Customer-Driven Marketing Strategy

“After fully understanding consumers and the marketplace, it must decide which customers it will serve and how it will bring them value."

MARKETING MANAGEMENT - the art and science of choosing target markets and building profitable relationships with them

The marketing manager's aim is to find, attract, keep, and grow target customers by creating, delivering and communicating superior customer value.

To design a winning marketing strategy, the marketing manager would need to answer two important questions: What customers will we serve? (What's our target market?) and How can we serve these customers best? (What's our value proposition?).

SELECTING CUSTOMERS TO SERVE

Market Segmentation - dividing market into segments of customers to decide which among these segments should be targeted and served

Marketing managers must decide which customers they want to target and on level, timing, and nature of their demand. Simply put, marketing management is  customer management and demand management.

What is CUSTOMER MANAGEMENT? And DEMAND MANAGEMENT?

CHOOSING VALUE PROPOSITION (Differentiation and Positioning of the Company)

A brand value proposition is the set of the benefits or values it promises to deliver to customers to satisfy their needs. This differentiates one brand from another. They answer the question Why should I buy your brand than a competitor's?, strong value propositions give the greatest advantage in their target market.

MARKETING MANAGEMENT ORIENTATION (Five Alternative Concepts)

1.      Production Concept - the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency.

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

3.      Selling Concept - the idea that consumers will not buy enough the firm's products unless it undertakes a large-scale selling and promotion efforts.

4.      Marketing Concept - a philosophy that holds that achieving goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

5.      Societal Marketing Concept - the idea that a company's marketing decisions should consider consumer's wants, the company's requirements, consumers' long-run interests, and society's long-run interests.

Preparing an Integrated Marketing Plan and Program

“Now, the company develops marketing plans and programs - a marketing mix - that will actually deliver the intended customer value."

MARKETING MIX - set of marketing tools the firms uses to implement its marketing strategy, classified into four broad groups, called four P's of marketing: product, price, place, and promotion.

The firms must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers that intended value to chosen customers.

Building Customer Relationships

“Now, the company develops marketing plans and programs - a marketing mix - that will actually deliver the intended customer value."

CUSTOMER RELATIONSHIP MANAGEMENT - the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

CUSTOMER-PERCEIVED VALUE - the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offer.

CUSTOMER SATISFACTION - the extent to which a product's perceived performance matches a buyer's expectations.

Source: (2012). P. Kotler, Principles of Marketing (14th ed.). Pearson Education, Incorporated.