Transcript Marketing

Lecture 1
Defining Marketing for the 21st century
By: Dr Shahinaz Abdellatif
Lecture Objectives
• What are the major concepts and tools of
marketing?
• What are the major forces driving the New
Economy and how marketers are responding to
the new challenges?
• How are business and marketing practices
changing as a result of the New Economy?
• What orientations do companies exhibit in the
marketplace?
• How are marketers using the Internet, customer
databases, and customer relationship
management in the New Economy to attract &
retain customers?
The New Economy
•Substantial increase in buying power
•A greater variety of goods and services
•A greater amount of information.
•A greater ease in interacting and placing
and receiving orders
•An ability to compare notes on products
and services
Marketing
• Marketing is about identifying and
meeting human and social needs.
• Marketing is the process by which
companies create value for customers
and build strong customer
relationships in order to capture value
from customers in return.
Marketing Management
•Marketing Management is the art and
science of choosing target markets and
getting, keeping and growing customers
through creating, delivering and
communicating superior customer value.
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The Scope of Marketing
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Places
Properties
Organizations
Information
Ideas
•Goods
•Services
•Experiences
•Events
•Persons
A Simple Marketing System
The Decisions
Marketers Make
•Consumer Markets
•Business Markets
•Global Markets
•Nonprofit and
Governmental Markets
Figure 2: Structure of Flows in a Modern Exchange
Economy
Figure 3:
The Four P
Components
of the
Marketing Mix
Figure 4: Marketing-Mix Strategy
Marketing Mix and the Customer
Four Ps
• Product
• Price
• Place
• Promotion
Four Cs
• Customer solution
• Customer cost
• Convenience
• Communication
Company Orientations Toward the
Marketplace
•Production Concept
•Product concept
•Selling Concept
•Marketing Concept
Figure 5: Contrasts Between the Sales Concept and
the Marketing Concept
Product Orientation vs. Market Orientation
Company
Product
Market
Missouri-Pacific
Railroad
We run a railroad
We are a peopleand-goods mover
Xerox
We make copying
equipment
We improve office
productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We entertain
people
Company Orientations Toward the
Marketplace
The Customer Concept
Traditional Organizational Chart versus Modern
Customer-Oriented Company Organization Chart
What is Holistic Marketing?
Holistic marketing sees itself as
integrating the value exploration, value
creation, and value delivery activities
with the purpose of building long-term,
mutually satisfying relationships and
prosperity among key stakeholders.
Internal Marketing
Internal marketing is the task of
hiring, training, and motivating able
employees who want to serve
customers well.
How Business and Marketing are
Changing
•Marketer Responses
and Adjustments
 Customer relationship 
marketing
 Customer lifetime value 
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 Customer share
 Target marketing

 Customization
 Customer database
Integrated marketing
communications
Channels as partners
Every employee a
marketer
Model-based decision
making
Old Economy vs. New Economy
Old Economy
New Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial
scorecard
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction
measurement
Overpromise, underdeliver
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
Focus on stakeholders
Everyone does the marketing
Build brands through behavior
Focus on customer retention and
growth
Measure customer satisfaction and
retention rate
Underpromise, overdeliver
The SupplierCustomer
Relationship:
Traditional and
New Economy
Structures
Adapting Marketing to the New
Economy
•Internet Domains: B2B
(Business to Business)
•Internet Domains: B2C
(Business to Customer)
•Internet Domains: C2C
(Consumer to Consumer)
•Internet Domains: C2B
(Customer to Business)
Premier Dell.com is a special business-oriented part of the
Dell Web site that allows customers to interact with Dell and
customize all phases of doing business with Dell.
Adapting Marketing to the New
Economy
•How Marketing Practices are Changing:
Customer Relationship Marketing
• Reduce rate of customer defection
• Increase longevity of customer relationship
• Enhance growth potential through crossselling and up-selling
• Make low profit customers more profitable
or terminate them
Mass Marketing vs.
One-to-One Marketing
Mass Marketing
One-to-One Marketing
Average customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
Mass promotion
One-way message
Economies of scale
Share of market
All customers
Customer attraction
Individual customer
Customer profile
Customized market offering
Customized production
Individualized distribution
Individualized message
Individualized incentives
Two-way messages
Economies of scope
Share of customer
Profitable customers
Customer retention
Adapting Marketing to the New
Economy
• Four steps for One-to-One Marketing
• Don’t go after everyone, identify prospects.
• Define customers by their needs
and their value to the company.
• Individual interaction with customers
builds stronger relationships.
• Customize messages, services, and
products for each customer.
Tools for Tracking and Measuring Customer
Satisfaction
Complaint
and
suggestion
systems:
Customer
satisfaction
surveys:
A customer-centered organization makes it easy for
customers to register suggestions and complaints.
Some customer-centered companies-P&G, General
Electric, Whirlpool—establish hot lines with toll-free
numbers. Companies are also using Web sites and
e-mail for quick, two-way communication.
Studies show that although customers are dissatisfied
with one out of every four purchases, less than 5
percent will complain. Most customers will buy less or
switch suppliers. Responsive companies measure
customer satisfaction directly by conducting periodic
surveys. While collecting customer satisfaction data, it
is also useful to ask additional questions to measure
repurchase intention and to measure the likelihood or
willingness to recommend the company and brand to
others.
Functions of CMOs
• Strengthening the brands
• Measuring marketing effectiveness
• Driving new product development
based on customer needs
• Gathering meaningful customer insights
• Utilizing new marketing technology
Marketing Management Tasks
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Develop market strategies and plans
Capture marketing insights
Connect with customers
Build strong brands
Shape market offerings
Deliver value
Communicate value
Create long-term growth