Strategic planning to attract and retain customers.
- 1. Marketing Unit 1 : Overview of Marketing
- 2. Reference Books • Principles of Marketing , Philip Kotler 13th Ed, PHI publications • Marketing Management , Rajan Saxena, 3rd Ed, Tata McGraw Hill • Marketing Management 3rd Ed, Ramaswamy, Namakumari • Marketing Management-A south Asian Perspective • Kotler, Keller, Koshy and Jha, Pearson (14 e)
- 3. Concept of Market • Market refers to a place where transactions take place between buyers and sellers with respect to exchange of goods and services. • Markets are bifurcated on the basis of the type of product. For instance, cotton market, grains market and flower market. Sometimes, they are also bifurcated on the basis of quantity. For example, wholesale market and retail market. • The market may be physical entity or may be virtual, it may be local or global • However, in modern times, the term market has a wider meaning. It now includes all potential buyers of goods or/and services.
- 4. Concept of Marketing • Marketing refers to the process of interaction between buyers and sellers with the objective of exchange of goods and services. • Marketing is a much wider concept which comprises various activities involved in the process of exchange of goods and services between buyers and sellers. • The activities which are part of marketing are basically the various functions which are performed under marketing such as planning. designing the product, packaging and labelling of the product, standardizing, branding, warehousing, transport, advertising, pricing and distribution. In addition, it includes after sales activities such as customer care and feedback.
- 5. Marketing Management • Marketing management means management of all the activities related to marketing or in other words we can say, it refers to planning, organizing, directing and controlling the activities which result in exchange of goods and services. • The main focus of marketing is on exchange of goods and services. • Philip Kotler defined marketing management as "The art and science of choosing target markets and getting, keeping and growing customers through creating delivering and communicating superior customer values of management".
- 7. The Production Concept • During the earlier days of industrial revolution, the demand for industrial goods started picking up but the number of producers were limited. • As a result, the demand exceeded the supply. Selling was no problem. Anybody who could produce the goods was able to sell. • The focus of business activities was, therefore, on production of goods. • It was believed that profits could be maximized by producing at large scale, thereby reducing the average cost of production.
- 9. Selling Concept • The product quality and availability did not ensure the survival and growth of firms because of the large number of sellers selling quality products. • This led to greater importance to attracting and persuading customers to buy the product. • The business philosophy changed. It was assumed that the customers would not buy, or not buy enough, unless they are adequately convinced and motivated to do so • Therefore, firms must undertake aggressive selling and promotional efforts to make customers buy their products. The use of promotional techniques such as advertising. personal selling and sales promotion were considered essential for selling of products.
- 10. The Marketing Concept • Marketing orientation implies that focus on satisfaction of customer's needs is the key to the success of any organization in the market. • It assumes that in the long run an organization can achieve its objective of maximization of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way. • All the decisions in a firm are taken from the point of view of the customers. • For example, what product will be produced, with what features and at what price shall it be sold, or where shall it be made available for sale will depend on what do the customers want. If the customers want features like double door in a refrigerator or a separate provision for water cooler in it, the organization would produce a refrigerator with these features. would price it at a level which the customers are willing to pay and so on. “Our goal is to lead customers where they want to go before they know where they want to go”
- 12. The Societal Marketing Concept • The marketing concept, cannot be considered as adequate if we look at the challenges posed by social problems like environmental pollution, deforestation, shortage of resources, population explosion and inflation. • It is so because any activity which satisfies human needs but is detrimental to the interests of the society at large cannot be justified. The business orientation should, therefore, not be short-sighted to serve only consumers' needs. It should also consider large issues of long-term social welfare.
- 13. Marketing Myopia • When a company focuses more on sales than on marketing or consumers’ needs, that’s when marketing myopia strikes in. • A firm might think that product sales will grow without conducting proper research. Sometimes, they don’t see that customers behave differently in the digital age. • Step-Child Treatment Businesses often treat their product as their own child and customers’ needs as a stepchild. This result in spending most of the resources in the development of their product and the remaining (less or no) resources on conducting research and marketing. This backfires on the businesses as the stepchild always turn out to be the Cinderella of the story.
- 14. Marketing Myopia • Marketing Myopia is focusing only on existing wants and losing sight of underlying consumer needs
- 15. Examples Of Marketing Myopia • Kodak lost much of its share to Sony cameras when digital cameras boomed and Kodak didn’t plan for it. • Yahoo (worth $100 billion dollars in 2000) lost to Google and was bought by Verizon at approx. $5 billion (2016).---Yahoo could have acquired Google for $1 billion in 2002. But top leaders delayed it. ---It offered $1 billion to Facebook. But after a while, they decreased it to $850 million.----- Microsoft wanted to buy Yahoo in 2008 for $44.6 billion. Yahoo turned it down. • Google Glass was launched in 2014. It was exposed to a lot of negative reviews from consumers. They had concerns about privacy and safety. Most people weren’t interested in high-tech glasses that gave information at a glance of people or objects.--Google concentrated so much on selling this high-tech device that they overlooked the usefulness of it.
- 17. Step-1-Understanding the Marketplace and Customer Needs • Customer needs, wants, and demands • Market offerings • Value and satisfaction • Exchanges and relationships • Markets
- 18. Understanding the Marketplace and Customer Needs • States of deprivation • Physical—food, clothing, warmth, safety • Social—belonging and affection • Individual—knowledge and self-expression • ------Food-------- Needs • Form that needs take as they are shaped by culture and individual personality • --------what customer prefer-chicken, Burger-------- Wants • Wants backed by buying power • ------- only burger is within my budget----------- Demands
- 19. In the above example, responding to only stated need ie., “I need a phone or Car” doesn’t help in arriving at a right product proposition. As a marketer, it is important to dig deeper and uncover not only the real, but also his other needs: unstated need, delight need and secret needs.
- 20. Market Offerings • Market offerings are some combination, mixture, or blend of physical products, services, information, ideas, or experiences offered to a market to satisfy a need or a want. • Eg: Coke’s Open Happiness
- 21. Value and Satisfaction • Satisfied customers will buy again and tell others about their good experiences, on the other hand, dissatisfied customers will eventually switch to competitors and surely disparage the product to others. • Eg: Pizza Hut Bell
- 22. Exchanges and Relationship • Exchange is the act of obtaining a desired object from someone by offering something in return. • The goal is to retain customers and grow their business and build strong relationship by consistently delivering superior customer value.
- 23. Step-2-Designing a Customer-Driven Marketing Strategy To design a winning marketing strategy, the marketing manager must answer two important questions: • What customers will we serve ( what’s our target market)? -Dividing the market into segments and selecting which segment it will go • How can we serve these customers best ( what’s our value proposition)?--- A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs BMW promises “the ultimate driving machine” Apple iPhone – The Experience IS the Product Uber – The Smartest Way to Get Around Red Bull– Gives you Wiiings • It answer the customer’s question: Why should I buy your brand rather than a competitor's?
- 24. Step-3-Preparing an Integrated Marketing Plan and Program
- 25. Preparing an Integrated Marketing Plan and Program
- 26. Step-4 Building Customer Relationship The first three steps in the marketing process, leads up to the fourth and most important step: Building profitable Customer Relationship Customer Relationship Management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value( perceived) and satisfaction. It deals with all the aspects of acquiring, keeping, and growing customers • Communicate • Ask for feedback • Show appreciation • Delight customers-by delivering more than promise • Frequency marketing programs- reward customer who buy frequently-point system
- 27. Different states of satisfaction • Expected/Perceived= 1---------Satisfied • Expected/Perceived less than 1---------Unsatisfied • Expected/Perceived more than 1--------- Delighted • Customer often do not judge values and cost accurately or objectively, they act on perceived value • One customer notes that, for him premium dress establish his identity and separate him from others- many people have money but only a few have class-Raymond
- 30. Step-5 Capturing Customer Value • The final step involves capturing value in return- in the form of current and future sales, market share, and profits. • Creating Customer Loyalty and Retention-customer life time value • Growing Share of Customer • Building Customer Equity- The total combined customer life time values of all the company’s customers • Building the Right Relationships with the Right Customer
- 31. Building the right relationships with the right customers
- 32. Relationship Marketing • Relationship marketing refers to marketing efforts that focuses on developing long-term relationship with customers. It is a part of Customer relationship management (CRM) which aims to achieve long-term engagement of clients with business for maintaining its profitability. Relationship marketing is distinct from other types of traditional marketing. • It carries out activities for achievement of long-term goals like customer loyalty. Whereas, traditional marketing works towards getting short-term goals like customer acquisition and one-time sales. Traditional marketing does not pay any attention on building relationships. Relationship marketing instead of sales transactions emphasizes on customer retention and their satisfaction level.
- 34. Types/Tools of Relationship marketing