Principles of marketing BBUS - Session 1_Chap 1,2, 3, 4

28/09/2023 SESSION 1: INTRODUCTION TO MARKETING THU NGUYEN 1 1 CHAPTER 1 MARKETING: CREATING CUSTOMER VALUE AND ENGAGEMENT 2 2 1 28/09/2023 LEARNING OBJECTIVES 1. Define marketing and outline the steps in the marketing process. 2. Identify the five core marketplace concepts. 3. Identify the five alternative concepts under which organizations design and carry out their marketing strategies. 4. Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 3 3 SUMMARY 1. Define marketing and outline the steps in the marketing process • Marketing as the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return. • The twofold goal of marketing is: o to attract new customers by promising superior value o to keep and grow current customers by delivering value and satisfaction. 4 4 2 28/09/2023 SUMMARY 2. The five core marketplace concepts: Market offerings (products, services, and experiences) Needs Wants Demands Companies address needs, wants, and demands by putting forth a value proposition (a set of benefits that they promise to consumers to satisfy their needs) Value and satisfaction The value proposition is fulfilled through a market offering, which delivers customer value and satisfaction Exchange and relationships Markets Long-term exchange relationships with customers 5 5 SUMMARY 2. The five core marketplace concepts(cont.): • Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. • Wants are the form human needs take as they are shaped by culture and individual personality and are described in terms of objects that will satisfy those need. 1 Marketers did not create these needs; they are a basic part of the human makeup Want Need Instant noodle, ice cream Food • When backed by buying power, wants become demands. 6 6 3 28/09/2023 SUMMARY 2. The five core marketplace concepts(cont.): 2 • Consumers’ needs and wants are fulfilled through market offerings—some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. • Marketing myopia: the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. 7 7 SUMMARY 2. The five core marketplace concepts(cont.): • Customer- perceived value: the difference between total customer perceived benefits and customer cost. 3 • Customer satisfaction: the extent to which perceived performance matches a buyer’s expectations. • Customer value and customer satisfaction are key building blocks for developing and managing customer relationships. 4 • Exchange is the act of obtaining a desired object from someone by offering something in return. 8 8 4 28/09/2023 SUMMARY 2. The five core marketplace concepts(cont.): 5 • A market is the set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied through exchange relationships. • Marketers are no longer asking only “How can we influence our customers?” but also “How can our customers influence us?” and even “How can our customers influence each other?” 9 9 SUMMARY Five alternative concepts under which organizations design and carry out their marketing strategies: Production concept holds that consumers will favor products that are available and highly affordable focus on improving production and distribution efficiency Product concept Selling concept Marketing concept Societal Marketing concept holds that generating holds that achieving holds that consumers consumers will not buy customer satisfaction and enough of the firm’s organizational goals will favor products long-run societal depends on knowing the that offer the most in products unless the firm well-being through undertakes a large-scale needs and wants of target quality, selling and promotion markets and delivering the sustainable marketing performance, and effort desired satisfactions better strategies is key to both innovative features achieving the company’s than competitors do goals and fulfilling its focuses on creating sales focus on making responsibilities. transactions rather than find the right customers for continuous product on building long-term, your product but to find the improvements profitable customer right products for your relationships customers. 11 11 5 28/09/2023 SUMMARY Five alternative concepts under which organizations design and carry out their marketing strategies (cont.) 12 12 SUMMARY Customer relationship management: • Customer relationship management is the process of engaging customers and building and maintain in profitable customer relationships by delivering superior customer value and satisfaction • The aim of customer relationship management and customer engagement is to produce high customer equity, the total combined customer lifetime values of all of the company’s customers. • The key to building lasting relationships is the creation of superior customer value and satisfaction. There is a good fit between the company’s offerings and their needs (profitable but not loyal) There is a strong fit between their needs and the company’s offerings (profitable and loyal) There is little fit between the company’s offerings and their needs There is a limited fit between their needs and the company’s offerings (highly loyal but not profitable) 15 15 6