Download Consumer Behavior: People in the Marketplace

Introduction
CH01
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What Is Marketing?
Marketing: typically seen as the task of creating, promoting, and
delivering goods and services to consumers and businesses.
Marketing is a process by which companies create value for customers
and build strong customer relationships to capture value from
customers in return
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What is Marketing?
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?
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A Simple Marketing System
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The Four
P’s of the
Marketing
Mix
1-5
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Marketing-Mix Strategy
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Company Orientations towards the
marketplace
Production
concept
Product
concept
Selling
concept
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Marketing
concept
Societal
concept
Company Orientations towards the
marketplace
 Production concept is the idea that consumers will favour products
that are available or highly affordable
 Product concept is the idea that consumers will favour products
that offer the most quality, performance, and features. Organization
should therefore devote its energy to making continuous product
improvements.
 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
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Company Orientations towards the
marketplace
• 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
•
Reactive Market Orientation - Understanding and meeting consumers’
expressed needs. Proactive marketing orientation researching or
imagining latent consumers’ needs through a “probe-and-learn”
process. Companies that practice both reactive and proactive
marketing orientation are implementing a total market orientation
•
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
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Contrasts Between the Sales Concept
and the Marketing Concept
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Company Orientations towards the
marketplace
•
Holistic marketing is the idea that “everything matters” with
marketing. Focus on Relationship marketing, Integrated marketing,
Internal marketing and Performance marketing
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Contemporary approaches
Orientation
Western
Profit driver European
timeframe
Description
Relationship Building and
Emphasis is placed on the whole relationship between suppliers
marketing/ keeping good 1960s to
and customers. The aim is to give the best possible attention,
Relationship
customer
present day
customer services and therefore build customer loyalty.
management
relations
Business
marketing/
Industrial
marketing
Social
marketing
Building and
keeping
1980s to
relationships
present day
between
organisations
Benefit to
society
In this context marketing takes place between businesses or
organisations. The product focus lies on industrial goods or
capital goods than consumer products or end products. A
different form of marketing activities like promotion, advertising
and communication to the customer is used
Similar characteristics as marketing orientation but with the
1990s to added proviso that there will be a curtailment on any harmful
present day activities to society, in either product, production, or selling
methods.
1-12
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Company Orientations Toward the
Marketplace
The Customer Concept
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The New Economy
 Websites can provide companies with powerful new information and
sales channels
 Companies can collect fuller and richer information about markets,
customers, prospects and competitors
 Companies can facilitate and speed up communications among
employees
 Companies can have 2-way communication with customers and
prospects
 Companies can send ads, coupons, samples, information to targeted
customers.
 Companies can customize offerings and services to individual
customers.
 The Internet can be used as a communication channel for purchasing,
training, and recruiting.
 Companies can improve logistics and operations for cost savings while
improving accuracy and service quality.
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Old Economy vs. New Economy
Old Economy
New Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial
scorecard
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
No customer satisfaction
measurement
Overpromise, underdeliver
Focus on stakeholders
Everyone does the marketing
Build brands through behaviour
Focus on customer retention and
growth
Measure customer satisfaction
and retention rate
Underpromise, overdeliver
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Adapting Marketing to the New
Economy
•
•
•
•
•
•
Everyone does the marketing
Build brands through performance, not just advertising
Customer retention rather than customer acquisition
From none to in-depth customer satisfaction measurement
From over-promise, under-deliver to under-promise, over-deliver
Marketing practices are changing:
o Designing an Attractive Website
o Placing Ads and Promotions Online
o Building a Revenue and Profit Model
o Customer Relationship Marketing
 Reduce rate of customer defection
 Increase longevity of customer relationship
 Enhance growth potential through cross-selling and up-selling
 Make low profit customers more profitable or terminate them
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