A process by which a firm profitably translates customer needs into revenue.

It is called…

MARKETING

Chapter | 1

Introduction to MarketingLecture 2 – February 16, 2012Rajeev Shrestha

•Concept and importance of marketing

•Approaches to the study of marketing

•Marketing mix and its components

OVERVIEW

Marketing comes in a wide variety of flavors based on audience, media platform and business in today’s evolving and dynamic marketplace.

Marketing Strategy and Marketing Mix

Market Segmentation

Market targeting

Market Differentiation and Positioning

Choosing target markets and getting, keeping and growing

customers through creating, delivering and communicating

superior customer value.

The set of controllable tactical marketing tools that the firm

blends to produce the response it wants in the target

markets.

Marketing Mix

PRODUCT : is the combination of goods and services that

the company offers to target the market.

PRICE : is the amount of money customers have to pay to

obtain the product.

PLACE : Various activities the company undertakes to make

the product accessible and available to target customers.

PROMOTION : All activities the company undertakes to

communicate and promote its products to the target market.

Product Is the combination of goods and services that the company offers to target the market.

Product Mix

Varieties/ different items offered

Quality: standard ,grading –high, medium, low

Features: Colour, Styles

Packaging: Wrapper , Container

Brand: Name, Mark, Sign, Symbol

Services : Presale, after sale services

Warranties : Free repair & Maintenance

Place

Various activities the company undertakes to make the

product accessible and available to target customers.Place Mix

Channels: Retailers, Wholesalers

Location

Coverage

Transport: Mode of transportation

Price

Is the amount of money customers have to pay to obtain the

product.Price Mix

List Price: One price for all

Discounts / Allowances: Price Flexibility

Terms of Sale: Credit Terms & Payment Period

Promotion

All activities the company undertakes to communicate and

promote its products to the target market.

Promotion Mix

Sales Promotion: Incentives to promote sales

Advertising : Paid sales communication

Public Promotion : To protect and promote company image

Personal selling : Personal communication to promote buyers

Direct Marketing

Marketing Mix

4P’s represent the sellers view of mktg. tools available for influencing buyers.

From a buyers point of view each mktg. tool is designed to deliver a customer benefit.

Therefore, sellers 4P’s corresponds to the customers 4C’s.

Marketing Mix

4Ps 4Cs

Product Customer Solution (Needs, Wants)

Price Customer Cost

Place Convenience

Promotion Communication

While marketers, see themselves as selling products, customers see themselves as buying value or solutions to their problems.

Thus, winning companies will be those who can meet customer needs economically and conveniently with effective communication.

Building Customer RelationshipsCustomer Relationship Management (CRM)

The overall process of building and maintaining profitable

customer relationships by delivering superior customer value

and satisfaction

Relationship Building Blocks: Customer Value and Satisfaction

Customer perceived value

•The difference between total customer value and total customer cost

Customer satisfaction

•The extent to which a product’s perceived performance matches a buyer’s expectations

Customer Relationship Levels and Tools

Basic Relationships

Full Partnerships

The Changing Nature of Customer Relationships

Relating with more carefully selected customers uses

selective relationship management to target fewer, more

profitable customers

Relating more deeply and interactively by incorporating more

interactive two way relationships through blogs, Websites,

online communities and social networks

Building Customer Relationships

Partner relationship management involves working closely

with partners in other company departments and outside the

company to jointly bring greater value to customers

Partner Relationship Management

Partners inside the company is every function area interacting

with customers

•Electronically

•Cross-functional teams

Partners outside the company is how marketers connect with

their suppliers, channel partners, and competitors by

developing partnerships

Partner Relationship Management

Supply chain is a channel that stretches from raw materials to

components to final products to final buyers

Supply management

Strategic partners

Strategic alliances

Creating Customer Loyalty and Retention

Customer lifetime value is the value of the entire stream of

purchases that the customer would make over a lifetime of

patronage

Growing Share of Customer

Share of customer is the portion of the customer’s purchasing

that a company gets in its product categories

•Cross Sell

•Up Sell

Building Customer Equity

Customer equity is the total combined customer lifetime

values of all of the company’s customers

Building Customer Equity

Building the right relationships with the right customers

involves treating customers as assets that need to be

managed and maximized

Different types of customers require different relationship

management strategies

• Build the right relationship with the right customers

Customer Relationship Groups

Butterflies True Friends

Strangers Barnacles

Pote

ntial

Pro

fitab

ility

Projected Loyalty