Fundamentals of Marketing & Customer Service By Ashraf Ayoub 31 st Mar09 References: Business Today Book, 10 th Edition by M.Mescon . C.Bovee. J.Thill

What is Marketing?

What is Marketing?

• Process of planning & executing the conception , pricing , promotion , & distribution of ideas , goods , & services to create exchanges that satisfy individual & organizational objectives

Core Marketing Concepts

• Needs

• Wants

• Demands

• Products

• Services

• Values

• Satisfaction

• Quality

• Exchanges

• Transactions

• Relationships

• Markets

Products & Services Markets Needs, wants, & demands Value, Satisfaction, & quality Exchanges, Transactions, & relationships

Fundamental Marketing Goal

• To direct customers basics needs into the desire to purchase specific brands

What is customer Service?

• Efforts a company makes to satisfy its customers to help them realize the greatest possible value from the products they are purchasing.

Marketing Applications

• Products

• Services

• Non-profit Organizations

• People (People Marketing)

• Places (Place Marketing)

• Causes (Cause Related Marketing)

Role of Marketing in Society

• Helping People satisfy their Needs & Wants by helping organizations determine what to produce.

Customer Needs

• Difference between a persons actual & idea states; provides the basic motivation to make a purchase

• Basic human needs:

• • Food

• • Water

• • Air

• • Shelter

• • Clothing

Customer Wants

• Things that are desirable in light of a persons experiences, culture, & personality

• Producers shape Wants by exposing customers to alternatives

How to enhance the appeal of products or services

• By adding a utility (power of a good or service to satisfy a human need)

The four utilities

• • Form utility (consumer value created by converting raw materials and other inputs into finished goods & services)

• • Time utility (consumer value added by making a product available at convenient time)

• • Place utility (consumer value added by making a product available in a convenient location)

• • Possession utility (consumer value added when someone takes ownership of a product)

Technology & evolution of Marketing

• Production Era

• Sales Era

• Marketing Era

Factory Existing Selling & Profits through Products Promoting sale volume Market Customer integrated profits through needs marketing customer satisfaction The Sales Era The Marketing Era Starting Point Focus Means Ends

Production Era (until 1930s)

• Characteristics:

• • Demand for Products Exceed Supply

• • Manufacturers able to sell whatever produced

• • Sellers Market (market place characterized by a shortage of products)

• • Marketing Role to take orders & ship goods

Sales Era (1930s-1950s)

• Characteristics:

• • Supply for Products Exceed Demand

• • Firms spend more on advertising

• • Firms still focused on selling whatever produced

• • Buyers market (marketplace characterized by an abundance of products)

Marketing Era & Relationship Era

• Characteristics:

• • Marketing Concept adopting:

• • • Stressing customers needs & wants

• • • Concentrating on specific target markets

• • • Seeking long term profitability

• • • Coordinating with marketing efforts

• • • Maintaining long-term relationships with customers

Relationship Marketing

• Focus on developing & maintaining long-term relationships with customers, suppliers, & distributers for mutual benefit

Internet & Customer relations

• Brings the outside world closer

• Allows businesses to reach out

• Establish relationships with customers

• Market to the world

• Answer customers questions

• Better understand of customers who & what they want

The Importance Of Understanding Customers

• The aim of marketing is to know & to understand the customer so well that the product or service fits him & sells itself

Todays customers

• Sophisticated

• Price sensitive

• Demanding

Why to satisfy customers?

• Acquiring new customer cost up to 5 times as much as keeping existing one

• Long-term customers (buy more, take less time, bring new customers, less price sensitive)

• Satisfied customers are best advertisement

• With Superior customer service you can charge customers as much as 10% more than competitor

• Dissatisfied customers tell 20 other people about bad experience

How to measure customers satisfaction?

• Analyze customer base:

• • Are you getting new customer?

• • Are you losing good customers?

• • What is your customer retention rate?

• • What are you doing to keep customer loyalty?

Why are today customers less loyal today?

• They have more (choices, styles, options, services, products)

• Have more information from (brochures, consumer publications, internet)

• Empowered & raised expectations

• Products start to look the same

• Time is scarce

• Needs & buying habits change constantly

Not every customer is worth keeping

• weve gotten a lot smarter about separating the customers we do want from the customers we dont want says C. Michael Armstrong

Beyond Customer Satisfaction Price, Product Quality, Service quality, Innovation, Image Customer Perceived Value Loyalty Market Share & Profitability Shareholder Value

How to learn about customers

• Consumer buying behavior

• Marketing Research

• Virtual reality

• Database Marketing

• Relationship marketing

• One-to-one marketing

Consumer Buying Behavior

• Definition:

• Behavior exhibited by consumers as they consider & purchase various products

• Consider:

• • Difference between organizational & consumer markets

• • Buyers decision process

• • Factors influence buyer decision process

Organizational market

• Customers who buy goods or services for resale or for use in conducting their own operations

• 3 main subgroups:

• • Industrial/Commercial Market (buy to produce)

• • Reseller Market (wholesalers/retailers)

• • Government Market (federal, states, local agencies)

Organizational market (cont.)

• Buy raw materials

• Buy highly technical products

• Complex products

• Buy consumer products

• Larger Quantities