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Principles of Marketing
Managing Profitable Customer
Relationship
What Is Marketing?
Marketing Defined
Marketing is the process of satisfying a
realized/unrealized need while taking care of
organizational profitability and societal
concern.
Marketing consists of activities designed to
facilitate exchanges intended to satisfy
human or organizational needs or wants
Marketing :The process by which
companies can create value for
customers and build strong customer
relationships in order to capture value
from customers in return .
The marketing process
Under stand
the market
place and
customer
needs and
wants
Design a
customer –
driven
marketing
strategy
Construct
a
marketing
program
that
deliver
superior
value
Build
profitable
relationships
and create
customer
delight
Capture value
from
customer to
create profits
and customer
quality
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Exchange :
The act of obtaining a desired object from someone by
offering something in return
.
Conditions for marketing exchange
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Two or more people or organizations must be involved, and
each must have need and want to be satisfied .
The parties to the exchange must be involved voluntarily.
Each party must have something value able to exchange, and
each must believe that it will benefit from the exchange.
Parties must communicate each other and provide awareness
and information without these there is no exchange .
Understanding the Marketplace
and Customer Needs
Customer Needs and Wants
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Needs can be viewed in a strict physiological
sense—food, clothing, safety shelter
Wants with every thing else defined as want,
wants are the form that needs take as they are
shaped by culture and individual personality
Demands human wants that are backed by buying
power
Understanding the Marketplace
and Customer Needs
Market offerings are some combination of products, good, services, idea
information, or experiences offered to a market to satisfy a need or
want.
Markets is a physical place where buyers and sellers gathered to buy
and sell goods
Marketing system consists of all of the actors (suppliers, company,
competitors, intermediaries, and end users) in the system
Key consumer markets
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Consumer markets
Business markets
Global markets
Nonprofits and government markets
Market place ,market space and meta market
Key consumer markets
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Consumer markets
Companies selling mass consumer goods and services such as
soft drinks air travel, and athletic shoes and equipment spend a
great deal of time trying to establish a superior brand image.
Business markets
Companies selling business goods and services often face well
trained and well informed professional buyers who are skilled in
evaluating competitive offering. Business buyers buy goods in
order to make or resell a product to others at a profits
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Global markets
companies selling goods and services in the global
market place ,they must decide which countries to
enter, how to enter each country as exporter,licence,
joint venture, partners etc. how to adapt their
product and service feature, how to adapt their
communication to fit different culture.
Nonprofits and government markets companies
selling their goods to non profit organizations such as
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churches, universities, charitable organizations or
government agencies need to price carefully because
these organizations have limited purchasing power
Market place ,market space and meta market
Market place: Market place is physical as when you
shop in the store.
Market space: market space is digital as when you
shop on the internet.
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Metamarket: it is describe as cluster of
complementary products and services that are closely
related in the minds of the consumers but are spread
across a diverse set of industries .
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Marketing management :The art and
science of choosing target markets and
building profitable relationships with
them
company orientation toward the
market place
Marketing Management Orientations
The competing concepts under which organization have
conducted the marketing activities include.
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Production concept
Product concept
Selling concept
Marketing concept
Holistic concept
Societal concept
Designing a Customer-Driven
Marketing Strategy
Production concept is the oldest concept in
business. It holds that consumer will prefer
products that are widely available and
inexpensive. Managers of production oriented
business concentrate on achieving high production
efficiency ,low costs and mass distribution.
Designing a Customer-Driven
Marketing Strategy
Product concept : Holds that consumer
will favor products that offer the most
quality, performance, and innovative
features for which the organization should
therefore devote its energy to making
continuous improvements over time
Designing a Customer-Driven
Marketing Strategy
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. The selling concept is practiced
most aggressively with unsought goods ,goods that
customers do not think of buying such as insurance
Marketing concept holds that the key to achieving
organizational goals consist of the company
being more effective than competitors in
creating ,delivering and communicating
superior customer value to its chosen target
markets
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Holistic marketing concept is based on the development
,design and implementation of the marketing programs
processes, and activities that organizes their breath and
interdependencies.
Four components of holistic marketing
 Relationship marketing
 Integrated marketing
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Internal marketing
 Social responsibility marketing
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Relationship marketing
Customer s
Channels
Partners
Internal marketing
Marketing development
Senior management
Other departments
Integrated marketing
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Communication
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Product &services
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Channels
Social responsible marketing
 Ethics
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Environment
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Legal
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community
Societal marketing concept calls upon marketers to build
social and ethical consideration into their marketing
practices. societal marketing concept consider consumers’
wants, the company’s requirements, consumers’ long-term
interests, and society’s long-run interests
Preparing an Integrated
Marketing Plan and Program
Marketing Mix
The marketing mix is the set of tools (Seven
Ps) the firm uses to implement its marketing
strategy
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Product
People
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Price
Physical evidence
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Promotion
process
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Place
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Product: To deliver on its value proposition the firm must first
create a need satisfying marketing offer (product)
Product variety , Quality, Design , features, Brand name
Packaging ,Sizes, warranties, returns.
Price: it must decide how much it will charge for the offer
(price)
List price ,Discount ,Allowances ,payments period, Credit
terms
Promotion:
Sales promotion , advertising, sales force, public relation,
direct marketing
Place : how it will make the offer available to target
consumer channels, coverage, location inventory, transport
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People: It involves all employees regular and permanent
and contractors.
Physical evidence: physical environment giving evidence
for particular look ,cultural evidence.
Process: It involve manufacturing and delivering products
to the customers
How business and marketing are changing
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Changing technology
Globalization
Deregulation
Privatization
Customer empowerment
Customization
Competition
Industry convergence
Retail transformation
disintermediation
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Changing technology :
The digital revolution has created an information age. The
information age promises to lead to more accurate levels of
production, more targeted communication and more relevant
pricing. More over much of today's business is carried on over
electronic networks such as intranet,extranets,and the internet.
Globalization: Technological advances in transportation,
shipping and communication have made it easier for companies
to market in other countries and easier for consumer to buy
products and services from marketers in other countries
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Deregulation
Many countries have deregulated industries to create greater
competition and growth opportunities. For example in united
states long distance telephone companies can now compete in
local markets and local phone companies can now offer long
distance.
Privatization: Many countries have converted public
companies to private owner ship and management to increase
their efficiency .
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Customer empowerment:
Customers increasingly expect higher quality and
service and some customization .they are more and
more time starving and want more convenience.
Customization: The company is able to produce
individually differentiated goods whether ordered in
person ,on the phone ,or online. By. going online
companies essentially enable consumers to design
their own goods.
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Competition:
Brand manufacturers are facing intense competion from
domestic and foreign brands ,which in resulting in rising
promotion costs and shrinking profit margins
Industry convergence: Industry boundaries are blurring at an
incredible rate as companies are recognizing that new
opportunities lie at the intersection of two or more industries
Retail transformation: small retailers are succumb to
the growing power of giant retailers and category killers. store
base retailers are facing growing competition from catalog
houses, direct mail firms news paper, magazine ,and T.V direct
to customer ads, home shopping .
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Disintermediation: The amazing success of early
online dot.com such as AOL,OLX,amazon,yahoo,eBay
and dozens of others who created disintermediation
in the delivery of products and services.
Building customer relationship
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Customer relationship management (CRM):
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
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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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, Internet) to make direct
connections with customers
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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
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Building Customer Relationships
Partner Relationship Management
Partners inside the company is every function
related to interacting with customers
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Electronically
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Cross-functional teams
Partners outside the company is how marketers
connect with their suppliers, channel partners, and
competitors by developing partnerships
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Building Customer Relationships
Partner Relationship Management
Supply chain is a channel that stretches from
raw materials to components to final
products to final buyers
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Supply management
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Strategic partners
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Strategic alliances
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