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Topic One: Introduction
Objectives
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Course Organization
Tasks of Marketing
Major Concepts & Tools of Marketing
Marketplace Orientations
Marketing’s Responses to New Challenges
Course/Text Organization
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Part I - Understanding Marketing
Part II - Analyzing Marketing Opportunities
Part III - Identifying customer value
Part IV - Creating the Market Offering
Part V - Delivering and communicating
Market Offering
Defining Marketing
Marketing is a societal process by which
individuals and groups obtain what they need
and want through creating, offering, and
freely exchanging products and services of
value with others.
- Philip Kotler (p. 7)
Core Concepts of Marketing
Target Markets & Segmentation
Needs, Wants, and Demands
Product or Offering
Value and Satisfaction
Exchange and Transactions
Relationships and Networks
Marketing Channels
Supply Chain
Competition
Marketing Environment
Simple Marketing System
Communication
Goods/services
Industry
(a collection
of sellers)
Money
Information
Market
(a collection
of Buyers)
Structure of Flows
Resources
Resources
Resource
markets
Money
Services,
money
Taxes,
goods
Services,
money
Manufacturer
markets
Taxes,
goods
Taxes
Government
markets
Goods, services
Consumer
markets
Services
Services,
money
Money
Money
Taxes,
goods
Intermediary
markets
Money
Goods, services
The Four Ps
The Four Cs
Marketing
Mix
Place
Product
Customer
Solution
Price
Promotion
Customer
Cost
Communication
Convenience
Company Orientations Towards the
Marketplace
Production Concept
Consumers prefer products that are
widely available and inexpensive
Product Concept
Consumers favor products that
offer the most quality, performance,
or innovative features
Selling Concept
Consumers will buy products only if
the company aggressively
promotes/sells these products
Marketing Concept
Focuses on needs/ wants of target
markets & delivering value
better than competitors
Customer Delivered Value
Starting
point
Focus
Means
Ends
Factory
Existing
products
Selling and
promotion
Profits through
sales volume
(a) The selling concept
Market
Customer
needs
Integrated
marketing
Profits through
customer
satisfaction
(b) The marketing concept
Traditional Organization Chart
Top
Management
Middle Management
Front-line people
Customers
Customer-Oriented Organization Chart
Customers
Front-line people
Middle management
Top
management
Evolving Views of Marketing’s Role
Finance
Production
Marketing
Finance
Human
resources
a. Marketing as an
equal function
Production
Human
resources
Marketing
b. Marketing as a more
important function
Evolving Views of Marketing’s Role
Production
Marketing
c. Marketing as the
major function
Customer
d. The customer as the
controlling factor
Evolving Views of Marketing’s Role
Production
Marketing
Customer
e. The customer as the controlling
function and marketing as the
integrative function
Determinants of Customer Delivered
Value
Image value
Personnel value
Services value
Total
customer
value
Product value
Customer
delivered
value
Monetary cost
Time cost
Energy cost
Psychic cost
Total
customer
cost
Satisfaction is a person’s
feelings of pleasure or
disappointment resulting
from comparing a product’s
perceived performance (or
outcome) in relation to his or
her expectations.
Satisfied Customers:
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Are loyal longer
Buy more (new products & upgrades)
Spread favorable word-of-mouth
Are more brand loyal (less price sensitive)
Offer feedback
Reduce transaction costs
Capturing value from customers
• Building customer relationship
• Creating customer loyalty and retention
– Customer lifetime value
• Growing share of customer
– share of customer
• Building customer equity
– customer equity: the total combined customer
lifetime values of all of the company’s customers.