Chapter #1
Marketing: Managing Profitable
Customer Relationships
Course Instructor
Yesmin Sultana
Assistant Professor
Faculty of Business Administration
AIU B
1
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.
2
Marketing Defined
Marketing is a social and managerial
process by which individuals and groups
obtain what they need and want, through
creating, offering and exchanging products
(goods and services) of value with others.
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Needs, Wants &
Demands
Markets Products, Services &
Experiences
Exchange, Transactions &
Value & Satisfaction
Relationships
Core Marketing Concept
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Customer Needs, Wants, and Demands
• Needs are states of deprivation, The states
of mind
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
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Customer Needs, Wants, and Demands
Wants are the form that needs take as they are shaped
by culture and individual personality. Wants are
shaped by one’s society and are described in terms
of objects that will satisfy needs.
Demands are wants backed by buying power. To fulfill
demand the affordability of the customers and
willingness to pay for any product is important.
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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.
- Physical Products, Services, Experience, Events,
Persons, Places, Ideas, Information and Properties.
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Goods
Goods Services
Services Events
Events
Experiences
Experiences Persons
Persons Places
Places
Organizations
Organizations Information
Information Ideas
Ideas
Properties
Properties
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Goods Services
Mark Zuckerberg
Persons
Events Experiences
Bill Gates 9
Organizations
Places
Ideas
Information
Properties
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Understanding the Marketplace
and Consumer Needs
Exchanges, Transactions and
Relationships
Exchange is the act of obtaining a
desired object from someone by
offering something in return.
Transaction is a trade of values
between two or more parties.
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Understanding the Marketplace
and Consumer Needs
Exchanges, Transactions and Relationships
There are at least two parties.
Each party has something that might be of value to the other party.
Each party is capable of communication and delivery.
Each party is free to reject the exchange offer.
Each party believes it is appropriate or desirable to deal with the
other party.
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Understanding the Marketplace
and Consumer Needs
Exchanges, Transactions and Relationships
Relationships consist of actions to build and
maintain desirable relationships by
delivering superior value to the customers.
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Understanding the Marketplace
and Consumer Needs
Markets are the set of actual and potential
buyers of a product . These buyers share a
particular need or want that can be
satisfied through exchange relationships.
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Understanding the Marketplace
and Consumer Needs
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/Geographical
• Technological
• Political–legal
• Socio-cultural
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Understanding the Marketplace
and Consumer Needs
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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?
• How can we increase our profitability through
satisfying our target customers?
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Designing a Customer Driven
Marketing Strategy
1. Selecting Customers to Serve
Market Segmentation: Dividing the markets into
different segments of customers to identify the
potential sub sets to offer the product or services of
an organization.
Target Marketing: Which segments to go after?
Selecting the appropriate segment/(s) that matches
with the company objectives.
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Designing a Customer Driven
Marketing Strategy
1. 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.
- It reduces the extra load from the peak hours and
make a balance between peak & off peak hours.
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Designing a Customer Driven
Marketing Strategy
2. 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.
- To make the customers satisfied and loyal to
the organization a proper balance between
promise and product performances is needed.
• A good hot pizza, delivered to your door
within 30 minutes of ordering, at a
moderate price.
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
There are five alternative concepts
under which organizations design and
carry out their marketing strategies.
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Production Concept is the idea that consumers will
favor products that are available or highly
affordable.
- Large production and effective distribution channel
is important
- Price of the products remains relatively low
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Production Concept
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Designing a Customer Driven
Marketing Strategy
3. 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
- Research & Development activities and putting
emphasis on customer advices
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Product Concept
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Designing a Customer Driven
Marketing Strategy
3. 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
- Communicating with the customers properly and
making strong awareness about the products or
services.
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Selling Concept
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Designing a Customer Driven
Marketing Strategy
3. 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.
- Customer is the king or queen, so meeting their
demand is most important point to emphasis
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Marketing Concept
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Designing a Customer Driven
Marketing Strategy
3. 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
- Thinking and acting as a member/part of the society
(CSR activities)
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Societal Marketing Concept
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Designing a Customer Driven
Marketing Strategy
3. Marketing Management Orientations
Societal Marketing Concept
Society
(Human Welfare)
Societal
Marketing
Concept
Consumers Company
(Want Satisfaction) (Profits)
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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
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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. Integrated
Marketing Program is a Combination of -
- Advertisement,
Advertisement
- Sales Promotion,
Promotion
- Personal Selling,
Selling
- Public Relations and
- Direct Marketing activities.
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Preparing an Integrated
Marketing Plan and Program
Customer Relationship Management (CRM)
Customer Relationship Management is the overall
process of building and maintaining profitable
customer relationships by delivering superior
customer value and satisfaction.
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Preparing an Integrated
Marketing Plan and Program
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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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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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 (support).
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Building Customer Equity
Customer Equity is the total combined
customer lifetime values of all of the
company’s customers
- Industry cumulative values for any
kind of product or services.
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