Marketing in a Changing World Muhammad Imran Wazir
What is Marketing? • Marketing is the delivery of customer satisfaction at a profit. • The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction. • Marketing – a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others. • The successful companies design the “right” products: not “me-too” products, but ones offering new benefits.
Needs, Wants and Demands • Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. • Wants are the form human needs take as they are shaped by culture and individual personality. • People have almost unlimited wants but limited resources. Thus, they want to choose products that provide the most value and satisfaction for their money. • When backed by buying power, wants become demands. Consumers view products as bundle of benefits.
Products, Services and Experiences • A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organizations, and ideas. • Service – any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. • Marketing myopia – Sellers are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs.
Value, Satisfaction, and Quality • Customer value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the product. • Customer satisfaction depends on a product’s perceived performance in delivering value relative to a buyer’s expectations. • Quality can be defined as “freedom from defects.”
Exchange, Transactions, and Relationships • Exchange – the act of obtaining a desired object from someone by offering something in return. • Transaction – a trade between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement. • Relationship marketing – the process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.
Marketing Management • The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives. • The aim of demarketing is not to destroy demand but only to reduce or shift it.
Marketing Management Practice • Marketing practice often passes through three stages. • Entrepreneurial marketing – most companies started by individuals who live by their wits. They visualize an opportunity and knock on every door to gain attention. • Formulated marketing – As small companies achieve success, they inevitably move toward more formulated marketing. • Intrepreneurial marketing – many large and mature companies get stuck in formulated marketing. Their brand and product managers need to get out of the office, start living with their customers, and visualize new and creative ways to add value to their customers’ lives.
Building Profitable Customer Relationships • Managing demand means managing customers. A company’s demand comes from two groups: new customers and repeat customers. • The “leaky-bucket” approach to marketing. • Companies have also discovered that losing a customer means losing not only a single sale but also a lifetime’s worth of purchase and referrals.
Marketing Management Philosophies • There are five alternative concepts under which organizations conduct their marketing activities. • The production concept holds that consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency. • Two types of situations where this philosophy is still useful. • When the demand for a product exceeds the supply. • When the product cost is too high and improved productivity is needed to bring it down.
Product and Selling Concepts • The product concept – consumers will favor products that offer the most in quality, performance, and innovative features. • An organization should devote energy to making continuous product improvements. e.g. mousetrap. • The selling concept – consumers will not buy enough of the organization’s products unless it undertakes a large-scale selling and promotion effort. • The concept is typically practiced with unsought goods e.g. encyclopedias or insurance.
Comparison of Selling and Marketing Concepts Starting pt. Focus Means Ends The Selling Concept The Marketing Concept Factory Existing Selling Profits through products and sales volumes promoting Market Customer Integrated Profits through needs marketing customer satisfaction
Marketing & Societal Marketing Concepts • The marketing concept hold that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. • The societal marketing concept holds that the organization should determine the needs, wants, and interests of target markets. • It should then deliver superior value to customers in a way that maintains or improves the consumer’s and the society’s well-being. e.g. J&J cyanide-laced capsules of Tylenol.
Marketing Challenges • Major marketing developments can be summed up in a single theme: connections. • The explosive growth in connecting technologies – computer, information, telecommunications, and transportation technologies – has created an exciting New Economy, filled with new ways for marketers to learn about and serve consumers, in large groups or one-to-one. • Marketers are choosing their customers more carefully and developing closer, more direct, and more lasting connections with them.