Writer: Kotler and Arm Strong Edition: 17 Course Outline

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Principles of Marketing

Writer: Kotler and Arm Strong

Edition: 17th

Course Outline:
..\..\Course outline Principles
of Marketing.docx

1-1
Chapter -01

Marketing: Creating Customer Value and Engagement

Mr. Muhammad Shafiq

Copyright © 2016 Pearson Education, Inc. 1-2


Marketing: Creating Customer Value and Engagement
What is marketing???

• Advertising???
• Bill boards???
• Sales???
• Promotion???
• ORRRR????

Copyright © 2016 Pearson Education, Inc. 1-3


What Is Marketing? Definition
• Marketing is a process by which companies create
value for customers and build strong customer
relationships in order to capture value from
customers in return.

• Value for Customer:????


• Value for Organization:???

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Goal of Marketing

• Attract new customers by promising superior value


• Grow current customers by delivering satisfaction
• Create WIN-WIN relationship

• Putting the Right Product in right Place on the right price at


Righ Time

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Marketing Process: Create value for customers through

Understanding the marketplace and customer needs and wants

Designing a customer-driven marketing strategy with the goal of getting, keeping, and growing
target customers.

Constructing a marketing program that actually delivers superior value.

Building profitable customer relationships and creating customer delight

Profit
Sales
Relationship
company earn the rewards of strong customer relationships by capturing value
from customers.
Summary
What Is Marketing?
-
-
creating capturing
value for value from
customers customers

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Understanding the Marketplace and Customer Needs
Customer Needs, Wants, and Demands
• States of deprivation, Basic Needs,
Needs Foods, Shelter etc…PPP
Maslow Hirarchy of Need

• Reshape by culture-knowledge
Wants • WHY to Buy from BRANDS

• Wants backed by buying power


Demands • Reshape by culture-knowledge &
Buying Power
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Understanding the Marketplace and Customer Needs
Market Offerings – Products, Services, and Experiences
• Market offerings are some combination of products, services,
information, or experiences offered to a market to satisfy a need or
want.
• Marketing myopia
Focusing only on existing wants and
losing sight of underlying
consumer needs.

• Short-sightedness --- where is NOKIA???

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Understanding the Marketplace and Customer Needs
Customer Value and Satisfaction

Customers
• Value and
satisfaction

Marketers
• Set the right
level of
expectations
• Don’t over Claim
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Understanding the Marketplace and Customer Needs
Exchanges and Relationships

Exchange is the act of obtaining a desired object from someone by offering something
in return. (Sales)

Philosophy of Exchange???
• Customer Perspective, Marketer Perspective

Marketing actions try to create, maintain, and grow desirable exchange relationships.

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Understanding the Marketplace and Customer Needs
Markets
Set of actual and potential buyers of a Product or services

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Designing a Customer Value-Driven Marketing Strategy
Selecting Customers to Serve

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?

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Designing a Customer Value-Driven Marketing Strategy
Selecting Customers to Serve

Market segmentation refers to dividing the markets into


segments of customers.

Target marketing refers to which segments to go after OR What


customers will we serve

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Designing a Customer Value-Driven Marketing Strategy
Choosing a Value Proposition
A brand’s value proposition is the set of benefits or values it
promises to deliver to customers to satisfy their needs.

“Why should I buy your brand rather than a competitor’s?”

Evaluate one of the following value propositions in terms of how well the company
delivers on the proposition
• Facebook helps you “connect and share with the people in your life”
• YouTube “provides a place for people to connect, inform, and inspire
others across the globe.”

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations

Societal
Production Product Selling Marketing
Marketing
concept concept concept concept
concept

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations

Production concept:
Consumers will favor products that are available and highly affordable.
• Focuses on improving production and distribution efficiency
• Highly Competitive markets
• Price Sensitive markets
• Low labor cost
Marketing
• High production efficiency
Myopia
• Mass Distribution

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations
Product concept:
Consumers favor products that offer the most quality, performance, and features.
The focus is on continuous product improvements.

BUT

• Manufacturer designs, packages, and prices it attractively


• Places it in convenient distribution channels
• Brings it to the attention of people who need it
• Convinces buyers that it is a better product

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations
Selling concept:
Consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort.
• Focuses on creating sales transactions, sell what the company makes
rather than
on building long-term, profitable customer relationships,
making what the market wants Poor
• They will like it Or, if they don’t like it, assumptions
they will possibly forget their disappointment
and buy it again later
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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations
Marketing concept:
Know the needs and wants of the target markets and deliver the
desired satisfactions better than competitors.

CUSTOMER-CENTERED PRODUCT CENTERED


Find the right products for your Find the right
customers, sense-and-respond customers for your product ,
philosophy make-and-sell philosophy
.

customer focus and value are the paths to sales and profits.
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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management Orientations
Societal marketing:
Marketing decisions should consider
• consumers’ wants
• Company’s requirements
• Consumers’ long-run interests
• society’s long-run interests.

Deliver value to customers in a way that maintains or improves


both the consumer’s and society’s well-being 1-22
Preparing an Integrated Marketing Plan and Program
Marketing mix is the set of tools (four Ps) the firm uses to implement its marketing
strategy.
Product- the firm must first create a need-satisfying market offering (goods, services,
events, persons, ideas, organizations, etc)
Price- how much it will charge for the offering (Tuition Fee, Hotel Tariff, rent, lease, wage,
commission, honorarium etc.)
Place- how it will make the offering available to target consumers (Marketing Channels,
Demand Gen & Fulfillment)
Promotion- engage target consumers, communicate about the offering, and
persuade consumers of the offer’s merits (Advertising, Sales Promotion, Personal Selling,
Public Relations, Direct Marketing, Digital Marketing)

An integrated marketing program is a comprehensive plan that communicates and


delivers the intended value to chosen customers. 1-23
Building Customer Relationships
Customer Relationship Management

Customer relationship management is the overall process of


building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.

• It deals with all aspects of acquiring, engaging, and growing customers.

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Building Customer Relationships
Customer Relationship Management
Relationship Building Blocks

Cost- Monitory , Time, Energy Etc


Customer- Customer
Benefits E.g Product quality,
perceived value satisfaction
maintenance cost, delivery charges,
aftersales service etc..
• The difference • The extent to
between total which perceived
performance Perceived Performance received??
customer
matches a Buyers Expectation & Actual
perceived
buyer’s Experience
benefits and
customer cost expectations

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Building Customer Relationships
Customer Relationship Management

Customer Relationship Levels and Tools

Frequency
Basic Relationships Full Partnerships
Marketing
– low-margin – high-margin
Programs – reward
customers customers
customers

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Capturing Value from Customers
Growing Share of Customer

Share of customer is the


portion of the customer’s
purchasing that a company
gets in its product
categories.
E.G Online Shopping, Restaurants, Malls

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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.

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Capturing Value from Customers
Building Customer Equity
Customer equity is the total combined customer lifetime
values of all of the company’s customers.

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Capturing Value from Customers
Building Customer Equity
Building the Right Relationships with the Right Customers
Strangers
Show low potential profitability and little projected
loyalty.

Butterflies are potentially profitable but not loyal.

True friends are both profitable and loyal.

Barnacles are highly loyal but not very profitable.

Different types of customers require different engagement and relationship management


strategies. The goal is to build the right relationships with the right customers.
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