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Postgraduate Diploma in Marketing
Discovering Marketing Essentials (DME)
Mahesh WeeratungeCorporate Trainer and Practitioner
MBA (UK), CPM(APMF), MAPMF, PG. Dip(M) SL, Dip M(SL),
MSLIM
Snr. Lecturer, Examiner, Corporate Trainer and Practitioner
Mahesh Weeratunge 2
RECOMMENDED TEXT
Part – 1Defining Marketing and the Marketing Process
Chapter – IManaging Profitable
Customer Relationship
Mahesh Weeratunge 4
Managing Profitable
Customer
Relationship
Marketing is…
Mahesh Weeratunge 5
Definition of Marketing
We define marketing as a social and managerial
process by which individuals and groups obtain
what they need and want through creating and
exchanging value with others.
Building and managing profitable exchange
relationship with customers.
Managing Profitable Customer
Relationship
Mahesh Weeratunge 6
Definition of Marketing
Managerial Process of identifying, anticipating
and satisfying customer needs at a profit in a
socially acceptable, ethical and eco friendly
manner…
Managing Profitable Customer
Relationship
Mahesh Weeratunge 7
Identifying prospects
Anticipating prospects behavior
Satisfying using company product or services
Profits by exchanging values and building relationship
Socially responsible manner as accepted by the society
Ethical business practices
Eco-friendly operation to protect environment
Marketing Responsible for…
Mahesh Weeratunge 8
Understanding the market place, customer needs and
wants
Designing a customer driven marketing strategy
Construct a marketing program that delivers superior value
Build profitable relationship and create customer delight
Capture value from customers to create profit and customer equity
The Marketing Process
Mahesh Weeratunge 9
Needs
Current State
Desired State
NEED
• Needs are the human requirements
Physical Needs
Safety Needs
Social Needs
Esteem & Psychological Needs
Self Actualization Needs
Need: States of felt deprivation
Mahesh Weeratunge 10
He needs to have a Hole on it!!!!!!
Mahesh Weeratunge 11
Person needs travel to a particular destination
Mahesh Weeratunge 12
Specific object that satisfy given need. The
form of human needs take as they are
shaped by culture and individual personality.
Eg: A person in USA needs foods and may want a
hamburger, French fries and soft drink, BUT a
person in Sri Lanka may wants rice with few
vegetable
Wants
Mahesh Weeratunge 13
Demands are wants for specific product
backed by an ability to pay.
Many people need BMW BUT can every one
afford???
Demands
Mahesh Weeratunge 14
Marketing people market many types of entities;
Goods – any tangible
Services – any intangible
Events – Olympic
Experiences – employment
Person – celebrity
Places – leisure world, Shanghai..
Properties – apartment
Organizations – Share market
Ideas – ad agencies, consultation
Information – research organizations
Money – Foreign Exchange
Marketing Offers
Mahesh Weeratunge 15
Overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction.
Customer Relationship Management
Mahesh Weeratunge 16
Customer Relationship
ValueSatisfactio
n
Through the Exchange Process and the
Transaction
Mahesh Weeratunge 17
Act of obtaining desired object
from someone by offering
something in return.
Exchange
Mahesh Weeratunge 18
Trade of values between two
parties
Transaction
Exchange and Transactions are taking place in Market
Mahesh Weeratunge 19
Market is the set of actual and
the potential buyers of a
product.
Market
How do we select the buyer/customer to serve???
Mahesh Weeratunge 20
Marketing System
Supplier
Company
Competitor
Intermediary
Consumer
Mahesh Weeratunge 21
Market Segmentation
Target Marketing
Selecting Buyer / Customer / Consumer to Serve
Mahesh Weeratunge 22
Market Segmentation
Market Segmentat
ion
Mahesh Weeratunge 23
Market Targeting
Mahesh Weeratunge 24
Marketing Management
Demand Management
Customer Management
By deciding value proposition
Mahesh Weeratunge 25
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Marketing Management Orientation
Mahesh Weeratunge 26
Assumption; Consumer favor
Products that are freely available
Products that are affordable
Concentration;
Improving Production Efficiency
Improving Distribution Efficiency
Economies of Scale; Try to achieve low unit cost
and also increase supply.
Production Concept
Mahesh Weeratunge 27
Production concepts prevailed from the time of
industrial revelation until the late 1920s.
At the time production concept worked fairly
well because the goods that were produced to
meet basic necessities and there were
relatively high level of unsatisfied basic needs.
Production Concept
Mahesh Weeratunge 28
Economics savings achieved by mass
production the cost advantages of a company
producing a product in larger quantities so
that each unit costs less to make.
Reduce average cost per unit by sharing
fixed cost among high volume
Economies of scale
Mahesh Weeratunge 29
Efficiency in production
Efficiency in distribution
How well company apply EOS
Production concepts looks for…
Mahesh Weeratunge 30
ASSUMTION: LOW PRICE
PRODUCT AND FREELY
AVAILABLE
ECONOMICS OF SCALE
PRODUCTION AND
DISTRIBUTION
Key in Production Concepts
Mahesh Weeratunge 31
Assumption; Consumer favors
Product with high quality, high performance
and innovative features.
Concentration;
Product improvement by features, quality
Product Concept
Mahesh Weeratunge 32
Management philosophy that a good
product creates its own market, and
does not require heavy marketing
expenditure.
Product Concept
Mahesh Weeratunge 33
CONTINUOUS
PRODUCT DEVELOP
MENT
RELATIVELY HIGH PRICE
HIGH QUALITY
& INNOVATI
VE PRODUCT
Key in Product Concept
Mahesh Weeratunge 34
Assumption;
Consumer will not buy unless it takes large
scale of selling and promotion effort.
Concentration;
Aggressive selling and promotional effort.
Selling Concept
Mahesh Weeratunge 35
HIGH EFFORT IN PROMOGTI
ON
INCREASE AVAILABILITY
HIGH EFFORT IN SELLING
KEY IN Selling Concept
Mahesh Weeratunge 36
Selling concepts is practicing most
aggressively with unsought goods, goods
that buyer normally do not think of buying,
such as insurance, encyclopedia etc…
Most companies are still practicing when
they have overcapacity.
Selling Concept in Practice…
Mahesh Weeratunge 37
Achieving organizational goals depends
on understanding of customer needs
and delivering desired satisfaction
better than competitor.
Concentration;
Customer Orientation, Integrated effort and
Goal achievement
Marketing Concept
Mahesh Weeratunge 38
Marketing Concept
CUSTOMERM
I
EA
R K
N
T
G
**
Producti
on
& QC
Sales
MKTG
HR & Administration
R&D
Finance
MIS
System
SCM
Mahesh Weeratunge 39
Build customer relationship. Getting a
new customer is 6times costly than
maintaining new customer.
Maximize profits
Keep customer always with the company
brands.
Why Marketing Concept???
Mahesh Weeratunge 40
Develop customer loyalty
Enhance image and reputation for both
product and entire organization
Recognition to organization members and
staff motivation
Less labor turnover
Increase revenue & profits
Effective utilization of resources
Benefits of Marketing Concept
Mahesh Weeratunge 41
Interdepartmental conflicts
Staff reluctant to change
Lack of committed leadership
Poor knowledge about the concept
Structural changes may occur conflict and
increase costs
Autocratic leadership – only one who wants to
make all the decisions.
Lack of infrastructure – technological needs
Difficulties in Developing Marketing Concept
Mahesh Weeratunge 42
Marketing through long term Social Wellbeing.
Organization obligation to maximize its positive
impact and minimize its negative impact to the
society
Bring Social and Ethical consideration to
marketing practice
Increase public interest
The Societal Marketing Concept
Mahesh Weeratunge 43
Society(Human Welfare)
Consumers
(Want Satisfacti
on)
Societal Marketin
g Concept
Company (Profit)
Key Ingredients in Societal Marketing
Mahesh Weeratunge 44
Key concentration
Ethical
Ecological
Economical
The Societal Marketing Concept
Mahesh Weeratunge 45
Defines Right OR Wrong behavior in
marketing practice
Basic ethics formalized through law to
make standards
What is Marketing Ethics?
Mahesh Weeratunge 46
Raising the level of socially
responsible marketing calls for
making a three-pronged attack
that relies on proper legal, ethical
and social responsibility behavior.
Corporate Social Responsibility (CSR)
Mahesh Weeratunge 47
Evolution Concept Focus Means Aims
Production Orientation
Assumed customer demand for product
availability & affordability
Improving production & Distribution
efficiency
Profitability through efficiency
Product Orientation
Assumed customer demand product
quality, performance & features
Continuous product
improvement
Profitability through product
quality
Selling Orientation
Existing products made by the firm;
creating sales transaction
Energetic selling & promotion
Profitability through sales
volume
Marketing Orientation
Customer needs & wants; long term
customer relationship
Integrated marketing activities
Profitability through customer
satisfaction
Mahesh Weeratunge 48
the overall process of building and
maintaining profitable customer
relationship by delivering superior
customer value and satisfaction.
acquiring customer, keeping customer
and growing customer
Customer Relationship
Management (CRM)
Mahesh Weeratunge 49
the difference between the total
customer value and the total customer
cost.
Customer Perceived Value
Mahesh Weeratunge 50
the extent to which the product’s
perceived performance matches the
buyers expectation.
Customer Satisfaction
HappyOr
Unhappy
Mahesh Weeratunge 51
Measuring Relationship Level
Mahesh Weeratunge 52
To build customer loyalty & retention
company should focus on building
customer lifetime value
Creating Customer Loyalty and Retention
Mahesh Weeratunge 53
The value of entire stream of purchases
that the customer would make over a
lifetime of patronage
Customer Lifetime Value when analyses
for all the company’s customer we can
see the company’s customer equity.
Customer Lifetime Value
Mahesh Weeratunge 54
Customer equity means total combined
customer lifetime value of all the
company’s customers
Customer Equity
Mahesh Weeratunge 55
Building the Right Relationship
ButterfliesGood fit between
company’s offerings and customers
needs; high profit potential
StrangersLittle fit between
company’s offerings and customers
needs; Lowest profit potential
BarnaclesLimited fit between company’s offerings
and customers needs; Low profit
potential
True FriendsGood fit between
company’s offerings and customers
needs; highest profit potential
Projected Loyalty
Short-term cus.. Long-term Cus..
Low Profitability
High Profitability
Pote
nti
al P
rofi
tab
ilit
y