PRINCIPLES OF MARKETING
Lecture 1
Lecture 1
What is Marketing?
What is Marketing?
• Process by which individuals and
groups obtain what they need and want through creating and exchanging
products and value with others.
• More simply: Marketing is the delivery
of customer satisfaction at a profit .
Core Marketing Concepts Core Marketing Concepts
Products and Services
Value, satisfaction, and quality Needs, wants,
and demands
Exchange, transactions, and relationships Markets
Marketing Core Concepts Marketing Core
Concepts
4
A SIMPLE MODEL OF THE MARKETING PROCESS
Construct an integrated marketing program
that delivers superior
value Design a
customer- driven marketing
strategy Understand
the
marketplace and
customer needs and
wants
Build profitable relationships
and create customer
delight
Capture value from customers to create profits and
customer equity
Capture value from customers in
return Create value for
customers and build customer relationships
What Motivates a Consumer to Take Action?
What Motivates a Consumer to Take Action?
• Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty
• Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a
Coca-Cola.
• Demands - human wants backed by buying power.
i.e. I have money to buy a Coca-Cola.
What satisfies Consumers’
Needs and Wants?
What satisfies Consumers’
Needs and Wants?
• Products - anything that can be offered to a market for
attention,
acquisition, use or consumption and that might satisfy a need or want.
• Examples: persons, places,
organizations,
activities, and ideas.
• Services - activities or benefits offered for sale that are
essentially intangible and don’t result in
the ownership of anything.
• Examples: banking,
airlines, haircuts,
and hotels.
How Do Consumers Choose Among Products and Services?
How Do Consumers Choose Among Products and Services?
• Customer Value - benefit that the customer gains from owning and using a product
compared to the cost of obtaining the product.
• Customer Satisfaction - depends on the
product’s perceived performance in delivering value relative to a buyer’s expectations. Linked to Quality and Total Quality Management
(TQM).
How Consumers Obtain Products and Services How Consumers Obtain
Products and Services
• Exchanges - act of obtaining a desired object from someone by offering something in return.
• Transactions - trade of values between parties.
Usually involves money and a response.
• Relationships - building long-term relationships with consumers, distributors, dealers, and
suppliers.
Who Purchases Products and Services?
Who Purchases Products and Services?
Market - buyers who share a particular need or want that can be satisfied by a company’s products
or services.
Market - buyers who share a particular need or want that can be satisfied by a company’s products
or services.
Actual Buyers Actual Buyers
Potential Buyers Potential
Buyers
Marketing Management Marketing Management
Marketing Management
Implementing programs to create exchanges with target buyers to achieve organizational
goals
Finding and increasing demand, also changing or reducing demand
Demand Management
Attracting new customers and retaining current customers
Profitable Customer Relationships
Marketing Management Philosophies
Marketing Management Philosophies
Production Concept Production Concept
Product Concept Product Concept
Selling Concept Selling Concept
Marketing Concept Marketing Concept
Societal Marketing Concept Societal Marketing Concept
• Consumers favor products that are available and highly affordable
• Improve production and distribution
• Consumers favor products that offer the most quality, performance, and innovative features
• Consumers will buy products only if the company promotes/ sells these product
• Focuses on needs/ wants of target markets & delivering satisfaction better than competitors
• Focuses on needs/ wants of target markets & delivering superior value
• Society’s well-being
12
Designing customer-oriented marketing strategy
Situational analysis
Segmentation
Targeting
Positioning
Customer Delivered Value Customer Delivered Value
Factory Existing Products
Selling and Promoting
Profits through
Volume
Market Customer Needs
Integrated Marketing
Profits through Satisfaction The Selli
ng Concept The Selli
ng Con cept
The Marke
ting Co
ncept Concept arketing The M
Starting
Point Focus Means Ends
Societal Marketing Concept Societal Marketing Concept
Society
(Human Welfare ) Society
(Human Welfare )
Consumers (Wants) Consumers
(Wants) Company
(Profits) Company
(Profits)
Societal Marketing
Concept Societal Marketing
Concept
15
Design a marketing programme
Value proposition to be delivered
Segmentation, Targeting and Positioning
4ps
7ps
16
The Four Ps The Four Ps
Marketing Mix
Product
Price Promotion
Place
The Four Cs The Four Cs
Customer Solution
Customer Cost
Communication
Convenience
17
Build valuable relationships
• Long –term focus
• Relationship marketing
• Customer relationship management
18
Capturing value from customers
Customer life time value
Customer equity
Customer loyalty
Customer share
Retention
19
Cus tom ers
Front -line
pe op le
Mid dle M ana ge
me nt
T op
Ma nag
em ent
Traditional Organization Chart
20
Customer-Oriented Organization Chart
Customers
Front-line people
Middle management
Top
management Cu sto m
ers Cu st om er s
21
Evolving Views of Marketing’s Role
a. Marketing as an equal function
Finance Production
Marketing Human resources
b. Marketing as a more important function
Finance
Human resources Marketing
Production
22
Evolving Views of Marketing’s Role
c. Marketing as the major function
Marketing
Fi na nc e H um
an re so
ur ce s
Production
d. The customer as the controlling factor
Customer
Hu m an re so ur ce s Fin an
Pr od uc tio n ce
Ma rke tin g
23
