Marketing Era

7/28/2019 Marketing Era

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Exhibit 4-14-4

R&D

Objectives

HR

Objectives

Marketing

Objectives

Finance

Objectives

Production

Objectives

Company

Objectives

Sales

Promotion

Objectives

Mass Selling

Objectives

Personal

Selling

Objectives

Price

Objectives

Promotion

Objectives

Place

Objectives

Product

Objectives


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Discuss what is marketing and core concepts ofmarketing and review some possible definitions

See the evolution of marketing thought and

discuss various orientations toward marketplace Focus on modern marketing concept, identify four

pillars of modern marketing

Describe 4Ps of marketing, as elements of total

marketing mix Discuss modern marketing concept comparing it

with selling concept and extending it withrelationship marketing concept


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Marketing;

Satisfying customer needs

Meeting needs profitably Generating customer value at a profit

Managing profitable customer relationships by deliveringsuperior value to customers


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No single correct definition or approach

Common subject matters: The ability to satisfy customers,

The identification of favorable marketing opportunities,

The need to create an edge over competitors,

The capacity to make profits to enable a viable future forthe organization,

The use of resources to maximize a business marketposition,

The aim to increase market share mainly in targetmarkets


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Build

profitable

relationships

and create

customer

delight

Capture

value from

customers

to create

profits andcustomer

quality

Create value for customers andbuild customer relationships

Capture

value fromcustomers

in return

Design a

customer-

driven

marketing

strategy

Construct a

marketing

program that

delivers

superior

value

Understand

the

marketplace

and customerneeds&wants


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Needs, wants,

and demands

Products

and services

Value and

satisfaction

Exchange,

transactions,

and relationships

Markets


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Needs, wants, and demands

Marketing offers: including

products, services andexperiences

Value and satisfaction

Exchange, transactions andrelationships

Markets

Need Basic human requirements State of felt deprivation

Example: Need food

Wants Needs directed to specific

objects The form of needs as

shaped by culture and the

individual Example: Want a Big Mac

Demands Wants which are backed by

buying power


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Exchange, transactions and

relationships Markets

Marketing offering

Combination of

products, services,information orexperiences that satisfya need or want

Offer may include

services, activities,people, places,information or ideas


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ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

Experiences Persons Places

Organizations IdeasInformation

ServicesActivities or Benefits Offered for Sale That Are Essentially

Intangible and Dont Result in the Ownership of Anything


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Marketing places: Creating positiveattitudes ormaintainingattitudes &behavior towardparticular places


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Friends Dont Let Friends

Drive Drunk

Marketing ideas

(social marketing)

This is the watch

Stephen Hollingshead, Jr.

was wearing when he

encountered a drunk driver.

Time of death 6:55 p.m.


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Value Customers form

expectations regarding

value Marketers must deliver

value to consumers

Satisfaction

A satisfied customer willbuy again and tell othersabout their goodexperience


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Total Quality Management Involves Improving the Quality of

Products, Services, and Marketing Processes

Products Perceived Performance in Delivering Value

Relative to Buyers Expectations is

Customer Satisfaction

Value Gained From Owning a Product and

Costs of Obtaining the Product is

Customer Value


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Needs, wants, and demands Marketing offers: including

products, services and

experiences Value and satisfaction Exchange, transactions and


Exchange The act of obtaining a

desired object fromsomeone by offeringsomething in return

Transaction Trade of values between twoor more parties

One exchange is not the goal,relationships with several exchangesare the goal

Relationships are builtthrough delivering value andsatisfaction Marketing networkconsists

of the company and all itssupporting stakeholders


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Market

Set of actual and

potential buyers of aproduct

Marketers seek buyersthat are profitable


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Industry

(a collection

of sellers)

Market

(a collection

of Buyers)

Products/services

Money

Communication

Information


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Process by which individuals and groups obtainwhat they need and want through creating and

exchanging products and value with others.

Simply put:Marketing the delivery of customersatisfaction at a profit.


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A social and managerial process by which individuals andgroups obtain what they needand want through creating,offering and exchangingproducts and services of valuewith others.

The management process responsible for identifying,

anticipating and satisfyingcustomer requirementsprofitably.

Marketing consists of individual and organizational activitiesthat facilitate and enhance satisfying exchange relationships ina dynamic environment through the creation, servicing,

distribution, promotion and pricing of goods, services andideas


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From the societal perspective; some marketersdescribe marketing as the creation and delivery of

a standart of living.

From the managerial perspective; marketing(management) is the process of planning and

executing the conception, pricing, promotion anddistribution of goods and services to createexchanges that satisfy individual andorganizational goals.


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Marketing managementthe art and science ofchoosing target markets and building profitablerelationships with them.

This definition must include answers to 2 questions: What customers will we serve? How can we serve these customers best?

Getting, keeping, and growing customers throughcreating, delivering, and communicating superior

customer value

Marketing management involves managingdemandinvolves managing customerrelationships


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Marketing managementcan be defined in broaderterms as demand management; Marketers aim to influence the level, timing and

composition of demand to meet organizational goals.

Marketing management is concerned not only with finding and increasing demand, but also with changing or even reducing it :

demarketing! Demarketings aim is to reduce the number of customers

or to shift their demand temporarily or permanently (e.g. move traffic away from a popular tourist attraction during peak

demand times)


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How marketing has becomemarketing as we understand itand apply its practices today?


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Production Era (1850s-1920s) Industrial revolution; mass production

Few products and little competition

Sales Era (1920s-1950s) The focus was on personal selling and advertising

Sales seen as the major means for increasing profits

Mktg Era (1950s-present) Customer orientation replaced the hard sell of the sales-led era

Determination of the needs and wants of customers beforeintroducing products or services


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Relationship Marketing Era: 1990s-

Marketing era has recently shifted from beingtransaction-based to focusing on relationships

The argument traditional marketing practices focused onattracting new customers rather than retaining existingones.

It is equally important to hang on to existing customers so

that they become repeat buyers and long term loyalcustomers

customer relationship management!


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Production Concept

Product Concept

Selling Concept

Marketing Concept

Consumers prefer products that arewidely available and inexpensive

Consumers favor products thatoffer the most quality, performance,

or innovative features

Consumers will buy products only if

the company aggressivelypromotes/sells these products

Focuses on needs/ wants of targetmarkets & delivering value

better than competitors


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Consumers will favor those products that arewidely available and low in cost.

Managers concentrate on achieving high

production efficiencyandwide distribution.

The assumption is valid at least in 2 situations: The demand for a product exceeds supply (suppliers will

concentrate on finding ways to increase production)

The products cost is high and has to be decreased toexpand the market.


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Consumers will favor those products thatoffer the most quality, performance orinnovative features.

Managers in product-oriented organizationsconcentrate on making superior products andimproving them over time.

The assumption

the customers will admirewell-made products and can evaluate productquality and performance

This concept may lead to marketing myopia


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Agressive selling and promotion

Assumptions are; Consumers must be convinced of buying company

products Company is powerful in generating effective selling and

promotion to stimulate more buying

This concept is mostly used by firms which haveovercapacity.

The aim is to sell what they make rather thanmake what the market wants.

Short-term profits are more important (customerdissatisfaction may occur)


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Key to achieving organizational goals consistsof being more effective than competitors increating, delivering and communicating

customer value to target markets.

4 pillars of modern marketing :1. Target market

2. Customer needs3. Integrated marketing

4. Profitability through customer satisfaction


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MarketIntegratedmarketing

Profits throughcustomer

satisfaction

Customerneeds

(b) The marketing concept

FactoryExisting

products

Selling and

promotion

Profits through

sales volume

Startingpoint Focus Means Ends

(a) The selling concept


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Simple Trade Era

Production Era

Sales Era

Marketing Department

Era

Marketing Company

Era

Sell Surplus

Increase Supply

Beat Competition

Coordinate and Control

Long-Run

Customer Satisfaction

Focus:

Focus:

Focus:

Focus :

Focus :

2-3


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Exhibit 2-1

Profit

CustomerSatisfaction Total CompanyEffort

TheMarketing

Concept

2-4


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Even the best firms sometimes backslide

into a production orientation

In todays highly competitive markets it isoften difficult to

keep up with changing customer needs beat aggressive competitors to the punch

find the right focus -- one that matches the firmsobjectives and resources to market opportunities

offer customers superior value

2-5


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Costs Benefits

Customer value concerns the difference between the

benefits a customer sees from a firms market offeringand the costs of obtaining those benefits

The customers view of costs and benefits is not just

limited to economic (or even rational) considerations--

and a low price may NOT result in superior value...2-6


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Costs BenefitsOne customers view of the benefits and costs of a

firms market offering may vary from another customers

view, so firm may not be able to satisfy everybody with

the same offering.

Customer value concept takes the customers point of

view, but customers may not explicitly weigh costs and

benefits and even if they do their view may not match

some objective reality.2-7


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1) Target markethomogenous group of customersto whom the company wishes to appeal

2) Customer needs

Consumers may not be fully conscious of their needs It may not be easy to articulate these needs

They may use words that require some interpretation

Customer-oriented thinkingto define customer needs fromthe customers point of view

Sales revenue

New customers + Repeat customers Customer Retention vs. Customer Attraction

Customer satisfaction is a function of the product perceivedperformance and buyers expectations


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3) Integrated Marketing1. Various marketing functions must work together for

customer satisfaction (coordination of 4Ps; marketing mixelements) Marketing Mixcontrollable variables the company puts

together to satisfy its target market(s).

Product: Product variety, quality, design, features, brand name,packaging, sizes, services, warranties, returns

Price: List price, discounts, allowances, payment period, credit

termsPromotion: Sales promotion, advertising, sales force, public

relations, direct marketing

Place: Channels, coverage, assortments, locations, inventory,transport


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Marketing

Mix

Product

PricePromotion

Place

CustomerSolution

Customer

Cost Communication

Convenience


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Integrated Marketing (cont.)

2. Marketing must be well coordinated with otherdepartments in the company;

all departments have to work together to satisfy

customers needs and wants

4) Profitability through customer satisfaction

To achieve profits as a result of creating superiorcustomer value


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There will always be need for

some selling. But the aim of marketingis to make selling superfluous. The aim

of marketing is to know and understand

the customer so well that the product or

service fits him and sells itself. Ideally,marketing should result in a customer

who is ready to buy.

Peter Drucker


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Customers

Front-line people

Middle Management

Top

Management


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Customers

Front-line people

Middle management

Top

manage-

ment


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Customer Relationship Managementthe overallprocess of building and maintaining profitablecustomer relationships by delivering superiorcustomer value and satisfaction.

It deals with all aspects of acquiring, keeping andgrowing customers

Relationship building blocks customer value andcustomer satisfaction

Customer retention and customer loyalty The intention to gain a greater proportion of an

existing customers purchases over a long period(increase consumer lifetime value!)


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Ourslogan 5+Million More Smiling Customers isnot about reaching sales targets but about whether weare able to provide greater satisfaction to a greater

number of customers...

The goal is to improve customer satisfaction whichtranslates to an increased number of smiling

customers.

Tokuichi Uranishi

Executive Vice President,

Toyota Motor Corporation


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Most marketers are targeting fewer,potentially more profitable customers.

Asking:

What value does the customer bring to theorganization?

Are they worth pursuing? customer profitability analysis

Focus has shifted to:

keeping current customers, and building lasting relationships based on superior

satisfaction and value. It costs 5 to 10 times as much to attract a new customer as it

does to keep a current customer satisfied.


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Customer Loyalty andRetention

Share of Customer

Customer Equity

Customer delight leadsto emotional

relationships andloyalty

Customer LifetimeValue (CLV) showstrue worth of acustomer

Key Concepts


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Customer Loyaltyand Retention

Share of Customer

Customer Equity

Share of customerspurchase in a productcategory.

Achieved throughoffering greater

variety, cross-sell andup-sell strategies.

Key Concepts


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Customer Loyaltyand Retention

Share of Customer

Customer Equity

The combined customerlifetime values of allcurrent and potentialcustomers.

Measures a firmsperformance, but in amanner that looks to the

future.

Choosing the bestcustomers is key

Key Concepts


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Companys negative effects on society

Conflict between consumer wants and long-term

social welfare Marketing managers should be concerned with

social responsibility

The societal marketing concept

Companys task is to determine needs and wants oftarget markets & to satisfy them more effectively andefficiently than competitors --in a way that preserves orenhances the consumers and societys well-being.


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Societal

MarketingConcept

Company(Profits)

Consumers(Want Satisfaction)

Society(Human Welfare)


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Digital age

Globalization

Ethics and socialresponsibility

Not-for-profitmarketing

Marketingrelationships

Growth of the Internet Advances in

telecommunications,information,transportation Customer research and

tracking Product development

Distribution New advertising tools 24/7 marketing through

the Internet

Challenges


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Digital age

Globalization




Geographical andcultural distanceshave shrunk Greater market coverage

More options forpurchasing and

manufacturing Increased competition

from foreign competitors

Challenges


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Digital age

Globalization




Marketers need to

take greatresponsibility for theimpact of theiractions

Challenges


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Digital age

Globalization




Many organizationsare realizing the

importance ofstrategic marketing Performing arts

Government agencies

Colleges, universities Hospitals

Challenges


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Digital age

Globalization




Profits throughmanaging long-term

customer equity Improve customer

knowledge

Target profitable

customers Keep profitable

customers

Challenges

Marketing Era

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