Introduction to Marketing

1. Amel Kovacevic Introduction to Marketing Chapter 1 Marketing: Managing Profitable Customer Relationships

2. Chapter 1 Introduction to Marketing Structure for today: 3 questions Who is this guy? What are we going to do this semester? Most importantly�how do I score some rockin� grades? What�s the big deal about Marketing? An introduction to the context in which Marketing fits

3. Chapter 1 Introduction to Marketing Who is this guy? Amel Kovacevic B.Sc. Economics, Master of Economics (International Islamic University Malaysia) 11 years in banking/financial sector General Manager of BamCard dd Sarajevo since 2003 Visiting lecturer at IUS Recently appointed Bosnian ambassador to PR of China

4. Chapter 1 Introduction to Marketing Course Goals To outline the marketing function and its role within a corporation�s business strategies, also hopefully generating a passion for the Marketing discipline and empowering you to evaluate Marketing as a possible career choice To introduce you to marketing strategy and to the elements of marketing analysis: customer analysis, company analysis, and competitor analysis To familiarize you with the elements of the marketing mix (product, pricing, promotion, and distribution strategies) and enhance your problem solving and decision making abilities in these operational areas of marketing tactics HAVE LOTS OF FUN!

5. Chapter 1 Introduction to Marketing TEXT BOOK Principles of Marketing Philip Kotler, Gary Armstrong, (12e)

6. Chapter 1 Introduction to Marketing �and how do I score some really serious grades? There�s no rocket science to getting good grades The secret: Work Hard! A grade will be composed of: Class participation 5% Quizzes 10% Midterm exam 25% Marketing plan 20% Final exam 40% TOTAL 100% The allocation of the percentage is subject to change.

7. Chapter 1 Introduction to Marketing Concepts What Is Marketing? Understanding the Marketplace and Customer Needs Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program Building Customer Relationships Capturing Value from Customers The New Marketing Landscape So, What Is Marketing? Pulling It All Together

8. Chapter 1 Introduction to Marketing What Is Marketing? Marketing Defined Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return

9. Chapter 1 Introduction to Marketing What Is Marketing? The Marketing Process Understand the marketplace and customer wants and needs Design a customer-driven marketing strategy Construct a marketing plan that delivers superior value Build profitable relationships and create customer satisfaction Capture value from customers to create profit and customer equity

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11. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs

12. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Customer Needs, Wants, and Demands Needs are states of deprivation Physical�food, clothing, warmth, safety Social�belonging and affection Individual�knowledge and self-expression

13. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Customer Needs, Wants, and Demands Wants are the form that needs take as they are shaped by culture and individual personality Demands are wants backed by buying power

14. Chapter 1 Introduction to Marketing Understanding the Marketplaceand 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

15. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Market Offerings�Products, Services, and Experiences Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs Exchange is the act of obtaining a desired object from someone by offering something in return

16. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Customer Value and Satisfaction Expectations Customers Value and satisfaction Marketers Set the right level of expectations Not too high or too low

17. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Exchanges and Relationships Exchange is the act of obtaining a desired object from someone by offering something in return Relationships consist of actions to build and maintain desirable relationships

18. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Markets are the set of actual and potential buyers of a product Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system who are affected by major environmental forces Demographic Economic Physical Technological Political�legal Socio-cultural

19. Chapter 1 Introduction to Marketing Understanding the Marketplaceand Customer Needs Marketing system consists of all of the actors in the system who are affected by major environmental forces

20. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management 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?

21. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve Market segmentation: Dividing the markets into segments of customers Target marketing: Which segments to go after

22. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve De-marketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it.

23. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve Marketing management is: Customer management Demand management

24. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Choosing a Value Proposition The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs

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27. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal concept

28. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept is the idea that consumers will favor products that are available or highly affordable

29. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Product concept is the idea that consumers will favor products that offer the most quality, performance, and features for which the organization should therefore devote its energy to making continuous improvements

30. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Selling concept is the idea that consumers will not buy enough of the firm�s products unless it undertakes a large scale selling and promotion effort

31. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do

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33. Chapter 1 Introduction to Marketing Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers� wants, the company�s requirements, consumers� long-term interests, and society�s long-run interests

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35. Chapter 1 Introduction to Marketing Preparing an Integrated Marketing Plan and Program Marketing Mix The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy Product Price Promotion Place

36. Chapter 1 Introduction to Marketing Preparing an Integrated Marketing Plan and Program Integrated Marketing Program Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers

37. Chapter 1 Introduction to Marketing Building Customer Relationships Customer Relationship Management (CRM) Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction

38. Chapter 1 Introduction to Marketing Building Customer Relationships Customer Relationship Management (CRM) Customer perceived value is the difference between total customer value and total customer cost Customer satisfaction is the extent to which a product�s perceived performance matches a buyer�s expectations

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40. Chapter 1 Introduction to Marketing Building Customer Relationships Customer Relationship Management (CRM) Customer Relationship Levels and Tools Basic relationship Full relationships Frequency marketing programs Club marketing programs

41. Chapter 1 Introduction to Marketing Building Customer Relationships The Changing Nature of Customer Relationships Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers Relating for the long term uses customer relationship management to retain current customers and build profitable, long-term relationships Relating directly uses direct marketing tools (telephone, mail order, kiosks, Internet) to make direct connections with customers

42. Chapter 1 Introduction to Marketing Building Customer Relationships

43. Chapter 1 Introduction to Marketing Building Customer Relationships Partner Relationship Management Partner relationship management refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers

44. Chapter 1 Introduction to Marketing Building Customer Relationships Partner Relationship Management Partners inside the company is every function area interacting with customers Electronically Cross-functional teams Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships

45. Chapter 1 Introduction to Marketing Building Customer Relationships Partner Relationship Management Supply chain is a channel that stretches from raw materials to components to final products to final buyers Supply management Strategic partners Strategic alliances

46. Chapter 1 Introduction to Marketing 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

47. Chapter 1 Introduction to Marketing 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

48. Chapter 1 Introduction to Marketing Capturing Value from Customers Building Customer Equity Customer equity is the total combined customer lifetime values of all of the company�s customers

49. Chapter 1 Introduction to Marketing Capturing Value from Customers Building Customer Equity Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized Different types of customers require different relationship management strategies Build the right relationship with the right customers

50. Chapter 1 Introduction to Marketing The New Marketing Landscape Major Developments Digital age Globalization Ethics and social responsibility Not-for-profit marketing

51. Chapter 1 Introduction to Marketing The New Marketing Landscape The New Digital Age Recent technology has had a major impact on the ways marketers connect with and bring value to their customers Market research Learning about and tracking customers Create new customized products Distribution Communication Video conferencing Online data services

52. Chapter 1 Introduction to Marketing The New Marketing Landscape The New Digital Age Internet�creates marketplaces and marketspaces Information Entertainment Communication

53. Chapter 1 Introduction to Marketing The New Marketing Landscape Rapid Globalization The world is smaller Think globally, act locally

54. Chapter 1 Introduction to Marketing The New Marketing Landscape The Call for More Ethics and Social Responsibility Social marketing campaigns encourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use

55. Chapter 1 Introduction to Marketing The New Marketing Landscape The Growth for Not-for-Profit Marketing Colleges Hospitals Museums Zoos Orchestras Religious groups

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61. Chapter 1 Introduction to Marketing Summary What Is Marketing? Understanding the Marketplace and Customer Needs Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program Building Customer Relationships Capturing Value from Customers The New Marketing Landscape So, What Is Marketing? Pulling It All Together