Transcript What is Marketing?

Chapter One
Marketing: Creating and
Capturing Customer Value
With Duane Weaver
© 2010
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OUTLINE
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Marketing – defined
Marketing Mix – defined
Market - defined
Marketing Process – discussed
Needs vs. Wants and Buyer Motivation
P for Product – deeper analysis
OOPS – Marketing Myopia
Value
Marketing Concepts
Not for Profit Marketing
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What is Marketing?
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What is Marketing?
“…a social and managerial process by
which individuals and groups obtain what
they need and want through creating and
exchanging value with others.”
Armstrong, et. al., p. 7
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What is a Market?
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What is a Market?
• The set of actual and potential buyers of a product, service or
experience.
– Also seen traditionally as a marketplace where the business
transaction (or trade) is enacted between buyers and sellers. For
example:
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A bizarre
Flea market
Farmer’s market
Retail Store
Wholesale Outlet
Online Internet Store
Cell Phone’s digital radio waves
• In Marketing when we talk about potential markets we usually are
referring to a set of buyers.
• These people share a need or want that can be satisfied through
exchange relationships.
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What is successful Marketing?
• Attracting new customers by promising
and delivering superior value.
• Building long-term relationships with
customers by delivering continued
customer satisfaction.
• Creating, building and managing these
relationships profitably over time.
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Core Marketplace Concepts
3. Value &
Satisfaction
Customer
Marketer
1. Market
Offerings
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Product
Service
Ideas
Experiences
2. Customers
4. Exchange,
&
Relationship
5. Market
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Needs
Wants
Demand
What is the Marketing Mix?
P
P
P
P
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The Four Ps (marketing mix)
• Product
• Price
• Place
• Promotion
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The Marketing Process
1. Understand the marketplace and customer
needs and wants.
2. Design a customer-driven marketing strategy.
3. Construct a marketing program that delivers
superior value.
4. Build profitable relationships and create
customer delight.
5. Capture value from customers to create
profits and customer equity.
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Needs vs. Wants and Buyer
Motivation - needs
• Needs are states of felt deprivation.
– Physical:
• Food, clothing, shelter, safety.
– Social:
• Belonging, affection.
– Individual:
• Learning, knowledge, self-expression.
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Abraham Maslow’s
Hiearchy of Needs
Solomon, Zaichowsky, Polegato, 2008
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Needs vs. Wants and Buyer
Motivation - wants
• SO then, …what is a “WANT”?
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Needs vs. Wants and Buyer
Motivation - Motivational Strength
• Biological vs. Learned Needs
(innate instinct vs. learned behaviour)
• Drive Theory
(achieving homeostasis by satiating tension
caused by the arousal of unpleasant states)
• Expectancy Theory
pulled by positive incentives (goals) rather
than pushed from within
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Needs vs. Wants and Buyer
Motivation - Motivational Direction
• MOTIVES tend to be directional
• Needs vs. Wants
– Need = unsatisfied requirement (hunger)
– Want = the way a person satisfies a need which ultimately is
dependent on “their historical reality” (cheeseburger vs. trail
mix)
• Types of Needs
– Biogenic or psychogenic
• Motivational Conflicts
Fig. 4-1
Solomon, Zaichowsky, Polegato, 2008
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P for product = Deeper Analysis
• Products
– Anything that can be offered for:
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acquisition,
attention,
use or consumption
That might satisfy a need or want.
• Services
– Activities or benefits offered.
– Essentially intangible.
– Do not result in ownership of anything.
• Experiences
– Create, stage and market brand experiences.
– Attending live theatre, music concert.
• Ideas
– Solutions, consultation, patents, innovations.
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Marketing Myopia
• Sellers pay more attention to the specific
products they offer than to the benefits and
experiences produced by the products.
• They focus on the “wants” and lose sight of the
“needs.”
– The great railroads lost out to the exploding trucking
industry.
– They forgot that their business was solving
transportation problems, not running railroads.
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Value and Satisfaction
• If the performance and the customer’s
experience is lower than expectations, then
customer satisfaction is low.
• If the performance and the customer’s
experience meets expectations, then the
customer is satisfied.
• If the performance and the customer’s
experience exceeds expectations, then the
customer is delighted.
– How can we do this?
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Core Marketplace Concepts
• Customers have needs, wants and demands.
• Marketers offer products or services.
• Customers seek value and satisfaction from offers.
• Demands and offers result in transactions and
relationships.
• Markets are all potential customers with a similar
demand.
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Customer-Driven Marketing
1. Divide markets into segments.
2. Choose the right segment to target.
3. Offer a unique value proposition.
4. Differentiate your offer from competitor offers.
5. Build customer value and satisfaction.
6. Nurture long-term customer relationships.
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Segmentation and Targeting
• Segmentation divides the market into groups of
customers with varying needs and wants.
• Targeting selects the right segment to nurture.
• Types of Market Segmentation (see Chp. 2):
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Demographic variables
Geographic location
Behavioural variables
Psychographic variables
Demand Management
• Marketing management seeks to control
demand.
– Increasing demand is the norm.
– Demarketing seeks to reduce demand in
certain circumstances.
• DEMAND = Wants + $Buying Power
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Value Proposition
The set of benefits or values the company
promises to deliver to its target markets
to satisfy their needs.
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Capturing Value In Return
• Customer lifetime value
• Share of customer
• Building Customer Equity
– The total combined customer lifetime value of all of the
company’s customers
– Combination of market share, share of customer and
lifetime customer value
– Often a more accurate measure of a company’s value than
sales or market share
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Marketing Concepts
• Production – affordability and availability.
• Product -- quality and innovation.
• Selling -- promotion and hard selling.
• Marketing -- customer satisfaction and
relationships.
• Societal – long-term value to both
customer and society.
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Not-For-Profit Marketing
• Marketing of ideas, values and
institutions.
• Increasing awareness that these
organizations must build relationships
with constituents and stakeholders.
• Challenge of using new marketing
techniques for not-for-profit initiatives.
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Thanks!
Do Happy Customers = Successful Companies?
Expectation Management is Key
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