Download What is Marketing?

Introduction to Marketing:
Value Exchange Process
Prof Agus W. Soehadi PhD
[email protected]
Hugo Boss
What is Marketing?
Marketing is the process of planning and executing
the conception, pricing, promotion
and distribution of ideas, goods and services
to create exchanges (maintain relationship)
that satisfy individual
and organizational objectives
(AMA 2004)
Nike
What is Marketing?
Starting
point
Focus
Means
The Selling
Concept
Factory
Existing
products
Selling and
promoting
Profits through
sales volume
The Marketing
Concept
Market
Customer
needs
Integrated
marketing
Profits through
customer value
Ends
Indo Mie
MODERN MARKETING SYSTEM
Suppliers
Company
(marketer)
Competitors
Marketing
Intermediaries
Final
Users
MARKETING PROCESS
Create value for customers and
build customer relationships
Understand the
marketplace and
customer needs
wants
Design a
customer-driven
marketing
strategy
Construct an
integrated
marketing
programs that
delivers
superior value
Build profitable
relationships
and create
customer
delight
Capture value
from customers
in return
Capture value
from customers
to create profit
and customer
equity
The Marketing Process
• A simple model of 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 quality.
Gabbot (2004)
Holcim
Needs, Wants, & Demands
• Need:
State of felt deprivation including physical,
social, and individual needs.
– Physical needs:
• Food, clothing, shelter, safety
– Social needs:
• Belonging, affection
– Individual needs:
• Learning, knowledge, self-expression
Gabbot (2004)
Needs, Wants, & Demands
• Wants:
Form that a human need takes, as shaped by
culture and individual personality.
• Wants + Buying Power = Demand
Gabbot (2004)
Need / Want Fulfillment
• Needs and wants are fulfilled through a
Marketing Offer:
– Some combination of products, services,
information, or experiences offered to a market to
satisfy a need
or want.
Gabbot (2004)
Need / Want Satisfiers
• Products:
– Persons
– Places
– Organizations
– Information
– Ideas
• Services
– Activity or benefit
offered for sale that
is essentially
intangible and does
not result in
ownership.
 Brand Experiences:
“. . . dazzle their senses, touch their hearts, stimulate their minds.”
Gabbot (2004)
Mercedes-Benz
THE CONCEPT OF EXCHANGE
(Why people buy?)
Products
Needs,
wants,
and
demands
Kotler (2006)
Marketing as an exchange
WHAT IS EXCHANGED
• There are many definitions and models of
how exchange takes place but importantly
we must ask ‘what is being exchanged.
– Meanings associated with exchange:
-
Utilitarian exchange
Symbolic exchange
Hedonic exchange
Composite exchange
Marketing as an exchange
Utilitarian exchange
• This type of exchange is referred to as
economic exchange. Goods are given in return
for money or other goods.
Symbolic exchange
• Symbolic exchange is an exchange where the
transaction involves psychological or social
characteristics.
Marketing as an exchange
Hedonic exchange
• Hedonic exchange refers to an exchange
where the transaction involves satisfying
five senses
Composite exchange
• Composite exchange refers to an
exchange that has both utilitarian and
symbolic meaning.
Starbucks Coffee
Exchanging value
• Holbrook extracts three key sources of
customer value:
– 1. Interaction
– 2. Comparison
– 3. Experience
• Interaction, comparison and experience form
a value system.
Exchanging value
Customer value is:
• 1. A trade off between product quality and the price
• 2. A trade off between a set of benefits and specific
categories of costs
• 3. The hierarchy of derived benefits obtained from
particular product attributes when using the product
• 4. The resulting emotional, practical and logical worth
associated with the product
• 5. A trade off between received value and desired
value
Conclusion
Suppliers
Company
(marketer)
Marketing
Intermediaries
Competitors
Value Exchange
Final
Users