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Marketing: An Introduction Armstrong, Kotler

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Marketing: An Introduction Armstrong, Kotler Chapter One Marketing: Managing Profitable Customer Relationships Looking Ahead Define marketing and the marketing processes. – PowerPoint PPT presentation

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Title: Marketing: An Introduction Armstrong, Kotler


1
Marketing An Introduction Armstrong, Kotler
  • Chapter One
  • Marketing Managing Profitable Customer
    Relationships

2
Looking Ahead
  • Define marketing and the marketing processes.
  • Explain the importance of understanding customers
    and the marketplace.
  • Identify the five core marketplace concepts.
  • Identify the key elements of a customer-driven
    marketing strategy.
  • Discuss customer relationship management and ways
    of creating and obtaining value.
  • Describe the major trends and forces changing
    todays marketing landscape.

3
  • What is marketing?
  • Marketing is building profitable customer
    relationships. The aim of marketing is to create
    value for customers and to capture value in
    return. Companies know if they take care of their
    customers ( delivering on their promises) ,
    market share and profits will follow.
  • Definition
  • We define marketing as a social and managerial
    process by which individuals and groups obtain
    what they need and want through creating and
    exchanging value with others.

4
The Marketing Process
  • Understand the marketplace and customer needs and
    wants.
  • Design a customer-driven marketing strategy.
  • Construct a marketing program that delivers
    superior value.
  • Build profitable relationships and create
    customer delight.
  • Capture value from customers to create profits
    and customer equity. Figure 1

5
Marketing process
Capture value from Customers to Create profits
and Customer quality
  • Figure 1

Build profitable Relationships and Create
customer delight
Construct a Marketing program That
delivers Superior value
Design a Customer-driven Marketing strategy
Understand The marketplace And customer needs And
wants
6
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • 1- Needs, wants, and demands
  • Needs are states of felt deprivation. All
    humanity have the same needs
  • Physical needs
  • Food, clothing, shelter, safety.
  • Social needs
  • Belonging, affection.
  • Individual needs
  • Learning, knowledge, self-expression

7
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • Wants are needs shaped by culture and individual
    personality. Example An American needs for food
    but wants a Big Mac. A Chinese needs for food but
    wants frog legs.
  • Demands are wants combined with buying power.
    Example Porsche or Kia.
  • Marketers spends time and money for a market
    research to understand the customers needs,
    wants, and demands.

8
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • 2- Products, Services, Experiences
  • consumer needs and wants are fulfilled through a
    marketing offer, which is some combination of
    products, services, or experiences offered to a
    market to satisfy a need.
  • Products tangible, like food, goodsetc.
  • Services intangible, banking, telecometc.
  • Experiences Brand experiences, like theater.

9
  • Understanding the marketplace and consumer needs
  • 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.
  • An article published by Harvard Business school
    defined the term marketing Myopia
  • Marketing myopia is true for all companies who
    define their markets too narrowly. urging
    organizations to define their industries broadly
    to take advantage of growth opportunities.
    Experience shows that when a business has
    redefined its market, it has continued to grow as
    new targets are set .

10
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • 3- Value and Satisfaction
  • If the performance and the customers experience
    is lower than expectations, then customer
    satisfaction is low.
  • If the performance and the customers experience
    meets expectations, then the customer is
    satisfied.
  • If the performance and the customers experience
    exceeds expectations, then the customer is
    delighted.

11
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • 4- Exchange, transactions, and relationships
  • Exchange.
  • The act of obtaining a desired object from
    someone by offering something in return.
  • Transaction
  • - consists of a trade values between two
    parties.
  • The goal of marketers is to build solid
    relationship with customers and retaining them by
    delivering superior value.

12
  • Understanding the marketplace and consumer needs
  • There are five core marketplace concepts
  • 5- Markets
  • The set of all actual and potential buyers of
    a product. Sellers must search for buyers, both
    buyers and sellers are carried out by marketing.
  • - Elements of a Modern Marketing systems
  • Figure 2

13
  • Elements of a Modern Marketing systems

Figure 2
Company
Supplier
Final Consumers
Marketing Intermediaries
Competitors
14
  • Designing a customer- driven marketing strategy
  • Once it fully understands consumers and the
    marketplace, marketing management can design a
    customer-driven marketing strategy.
  • Customer-Driven Marketing
  • Divide markets into segments.
  • Choose the right segment to target.
  • Offer a unique value proposition.
  • Differentiate your offer from competitor offers.
  • Build customer value and satisfaction.
  • Building long-term customer relationships

15
  • Designing a customer- driven marketing strategy
  • Marketing Management
  • The art and science of choosing target markets
    and building profitable relationships with them.
  • Two questions should be asked here
  • _ What customers will we serve? (our target)
  • _ How can we serve them best? ( Value)

16
  • Designing a customer- driven marketing strategy
  • Segmentation and Targeting
  • Selecting customer to serve first dividing
    the market into segments, Second select the
    segment to be our target market. Porsche company
    target customers with high income.
  • Deciding on a value proposition A set of
    benefits or values it promises to deliver to
    consumers to satisfy their needs. means the
    company must decide how it will differentiate
    itself from other competitors. Porsche promises
    driving performance and excitement. They say
    what a dog feels when the leash breaks.

17
  • A philosophy should guide the marketing
    strategy to any company.
  • The philosophy could be one or more of the
    following
  • 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.

18
  • 1- Production philosophy
  • it holds that consumers will favor products
    that are available and highly affordable. Its
    effective strategy in two situations
  • -When a demand for a product exceeds the supply.
  • -When the product cost is too high, and improve
    productivity is needed to reduce the cost, to
    gain market share.
  • Example Evian water, McDonalds.

19
  • 2- Product philosophy
  • holds that consumers will favor a products
    that offer the most in quality, performance, and
    innovative features.
  • In this case the company should focus on
    the continuous improving.
  • Examples Nokia Mobile, Motorola, Sony..

20
  • 3- Selling philosophy
  • Holds that the customer will not buy enough
    of the firms products unless it under-takes a
    large-scale selling and promotion effort.
  • Example Life-Insurance
  • 4- Marketing philosophy
  • Holds that achieving organizational goals
    depends on knowing the needs and wants of target
    markets and deliver value to compete in the
    marketplace. The job is not to find the right
    customers for your product, but the right
    products for your customers.
  • Dell, Marriott, Disney Figure 3.

21
  • 5-Societal marketing philosophy
  • Balances human welfare, company profits and
    consumer satisfaction
  • Example Johnson Johnson Credo honesty,
    integrity, and people before profit. Figure 4
  • Many calls from the Healthy Associations warn
    people form the consequences results from Fast
    Food chains.

22
Starting point
Figure 3
Focus
Means
Ends
Selling Promoting
Selling philosophy
Existing products
Profits Through Sales volume
Factory
Customer needs
Integrated Marketing
Marketing philosophy
Market
Profits Through Customer Satisfaction
23
Social Marketing philosophy Figure 4
Society (Human being)
Company (profits)
Consumers Want satisfaction
24
  • Building Relationships
  • Relationships span from the basic to tight
    integrated relationships.
  • Successful relationships are built on
  • Financial benefits like VIP, Airline frequent
    miles
  • Social benefits like member of clubs, magazines
  • Structural ties like tracking orders online.
  • Partner Relationship Marketing
  • Every department in an organization contributes
    to customer satisfaction.
  • Suppliers are carefully controlled through supply
    chain management.
  • Strategic alliances create new opportunities to
    delight customers.

25
  • Outcomes of creating customer value
  • 1- Customer loyalty and retention delighted
    customers remain loyal and talk favorably to
    others about the company and its products, and
    turn to be life-time value.
  • 2- share of market and share of customer many
    companies are increasing their variety of
    products and services to increase their profits
    form existing customers. Amazon offer videos,
    toys, electronics, beside books.
  • 3- customer equity is the total combined
    customer life-time values of all the companys
    customers. They view customers as an assets need
    to be maximized. Figure 5

26
  • Figure 5
  • less loyalty
    high loyalty
  • High
  • Profitability
  • Low
  • profitability

Butterflies Good fit between companys Offerings
and customers Needs. High profit potential
True friends Good fit between companys Offerings
and customers Needs, highest profit potential
Strangers Little fit between companys Offerings
and customers Needs, lowest profit potential
Barnacles Limited fit between company's Offerings
and customers Needs, low profit potential
27
New Marketing Technologies
  • Technology has changed how marketers build value.
  • Internet and e-commerce/e-business.
  • Fast and global communications.
  • Wireless technologies.
  • International trade is the new frontier.
  • Globalization
  • Capitalism

28
Ethics and Responsibility
  • Worldwide consumerism and environmentalism
    movements exert. pressure for greater
    responsibility
  • Seeking ways to make a profit by serving the best
    long-run interests of customers and communities.
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