The Marketing Process

THE MARKETING
PROCESS
Marketing is
the process by
which
companies
create value
for customers
and build
strong
customer
relationships to
capture value
from
customers in
return.
The Marketing Framework
Understand Design a Construct and Build Capture value

the customer‐ integrated profitable from
marketplace driven marketing relationships customers to
and customer marketing program that and create create profits
needs and strategy delivers customer and customer
wants superior delight equity.
value
UNDERSTANDING THE
MARKETPLACE A N D
CUSTOMER N E E D S
STAGE 1
Needs, Wants, and
Demands
Needs are states of
deprivation
• Physical ‐ food, clothing,
warmth, safety
• Social ‐ belonging and
affection
• Individual ‐ knowledge
and self‐expression
Needs, Wants, and
Demands
Wants are the form that
needs take as they are
shaped by culture and
individual personality.
Demands are wants
backed by buying power.
Market offerings are
some combination of
products, services,
information, or
experiences offered
to a market to satisfy
a need or want.
Market Offerings
Marketing myopia
is focusing only on
existing wants and
losing sight of
underlying consumer
needs.
Exchanges and
Relationships
E x c h a n g e is the act of obtaining
a desired object from someone
by offering something in return.
Marketing consist of actions to

build and maintain desirable
relationships.
Markets are the set of
Markets actual and potential buyers
of a product.
Marketing system consists of all
of the actors (suppliers,
company, competitors,
intermediaries, and end users)
in the system who are affected
by major environmental forces
Markets • Demographic
• Economic
• Physical / Environmental
• Technological
• Political–legal
• Socio‐cultural
DESIGNING A
CUSTOMER DRIVEN
MARKETING STRATEGY
STAGE 2
Marketing
Management
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?
Selecting Customers
to Serve
Market segmentation:
Dividing the markets into
segments of customers.
Target marketing:
Which segments to g o
after.
De‐marketing
Marketing to reduce
demand temporarily or
permanently; the aim is
not to destroy demand
but to reduce or shift it.
VALUE
PROPOSITION
is the set of benefits
or values a
company promises
to deliver to
customers to satisfy
their needs.
VALUE
PROPOSITION
Value
Proposition
Marketing Management Orientations
Production Product Selling

concept concept concept
Marketing Societal
concept concept
◦ Production concept is ◦ Product concept is the idea

the idea that consumers that consumers will favor
products that offer the most
will favor products that are
quality, performance, and
available or highly features for which the
affordable. organization should therefore
devote its energy to making
continuous improvements.
◦ Selling concept is the ◦ Marketing concept is the

idea that consumers will idea that achieving
not buy enough of the organizational goals
firm’s products unless it depends on knowing the
undertakes a large scale needs and wants of the
selling and promotion target markets and
effort delivering the desired
satisfactions better than
competitors.
MARKETING
MANAGEMENT
ORIENTATIONS
Marketing Management
Orientations
◦ Societal marketing concept
is the idea that a company
should make g o o d marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long‐term
interests, and society’s long‐
run interests
PREPARING A N
INTEGRATED PLAN A N D
PROGRAM
STAGE 3
The Marketing Mix
Product Price
Place /
Promotion
Distribution
The Marketing Mix
◦ Integrated marketing
program is a
comprehensive plan that
communicates and
delivers the intended
value to chosen
customers.
BUILDING CUSTOMER
RELATIONSHIPS
STAGE 4
◦ Customer relationship management
Building Customer is the overall process of building and
maintaining profitable customer
Relationships relationships by delivering superior
value and satisfaction.
Customer
Relationship
Management
◦ Customer perceived
value is the difference
between total customer
value and total customer
cost of a market offering
relative to those of
competing offers.
Customer
Relationship
Management
◦ Customer
satisfaction
is the extent
to which a
product’s
perceived
performance
matches a
buyer’s
expectations.
Customer
relationship levels
and tools.
• Basic relationship
• Full relationships
• Frequency
marketing
programs
• Club marketing
programs
The Changing
Nature of Customer
Relationships
Relating with more carefully selected
customers uses selective
relationship management to target
fewer, more profitable customers
Relating for the l on g term uses
customer relationship management
to retain current customers and build
profitable, long‐term relationships
Relating directly uses direct marketing
tools (telephone, mail order, kiosks,
Internet) to make direct connections
with customers
CAPTURING VALUE
FROM CUSTOMERS
STAGE 5
Customer lifetime value is the value
Creating Customer of the entire stream of purchases that
the customer would make over a
Loyalty and Retention lifetime of patronage.
Share of
Customer
◦ Share of
customer is
the portion of
the customer’s
purchasing
that a
company gets
in its product
categories
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.
Capturing Value From Customers
Butterflies – good fit between True Friends - good fit between
company’s offerings and customer company’s offerings and customer
needs; high profit potential needs; highest profit potential
High
Profitability
Strangers – little fit between a Barnacles – limited fit between

Low
company’s offerings and company’s offerings and customer
Profitability
customer’s need; lowest profit needs; low profit potential
potential
Short‐term customers Long‐term customers

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THE MARKETING

Understand Design a Construct and Build Capture value

Marketing consist of actions to

Production Product Selling

◦ Production concept is ◦ Product concept is the idea

◦ Selling concept is the ◦ Marketing concept is the

Strangers – little fit between a Barnacles – limited fit between

Short‐term customers Long‐term customers

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