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Transcript of Chapter 1
Principles of Marketing
FIFTH EUROPEAN EDITIONKotler, Armstrong,Wong, Saunders
Marketing\Marketing\
on
e
CHAPTER
Principles of Marketing 5e, © Pearson Education 2008 1-2
Previewing concepts (1)
• Define marketing and outline the steps in the marketing process
• Explain the importance of understanding customers and the marketplace and identify the core marketplace concepts
• Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy
Principles of Marketing 5e, © Pearson Education 2008 1-3
Previewing concepts (2)
• Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return
• Describe sustainable marketing and the major trends and forces that are changing the marketing landscape
Principles of Marketing 5e, © Pearson Education 2008 1-4
What is marketing?
Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
Principles of Marketing 5e, © Pearson Education 2008 1-5
Figure 1.1 A simple model of the marketing process
Understand the marketplace and customer needs
Design customer-driven marketing strategy
Construct an integrated marketing programme
Build profitable relationships and create customer delight
Capture value from customers to create profits and customer equity
Principles of Marketing 5e, © Pearson Education 2008 1-6
Core concepts: Understanding the marketplace and customer needs
• Needs, wants and demands
• Market offering
• Value, satisfaction and quality
• Exchanges, transactions and relationships
• Markets and the marketing system
Principles of Marketing 5e, © Pearson Education 2008 1-7
Market offerings are not limited to physical products
Principles of Marketing 5e, © Pearson Education 2008 1-8
What is customer value?
Customer value is the consumer’s assessment of the product’s overall capacity to satisfy his or her needs.
Principles of Marketing 5e, © Pearson Education 2008 1-9
What is customer satisfaction?
Customer satisfaction is the extent to which a product’s perceived performance matches expectations. If the product’s performance falls short of expectations, the buyer is dissatisfied, but if performance matches or exceeds expectations, the buyer is satisfied.
Principles of Marketing 5e, © Pearson Education 2008 1-10
Figure 1.2 Elements of a modern marketing system
Principles of Marketing 5e, © Pearson Education 2008 1-11
What is marketing management?
Marketing management is the art and science of choosing target markets and building profitable relationships with them.
Principles of Marketing 5e, © Pearson Education 2008 1-12
Selecting a target market
Principles of Marketing 5e, © Pearson Education 2008 1-13
Value propositions
Principles of Marketing 5e, © Pearson Education 2008 1-14
Marketing management orientations
Production concept
Product concept
Selling concept
Marketing concept
Societal marketing concept
Sustainable marketing concept
Principles of Marketing 5e, © Pearson Education 2008 1-15
Figure 1.3 Selling and marketing concepts
Principles of Marketing 5e, © Pearson Education 2008 1-16
Figure 1.4 The societal marketing concept
Principles of Marketing 5e, © Pearson Education 2008 1-17
Figure 1.5 The sustainable marketing concept
Principles of Marketing 5e, © Pearson Education 2008 1-18
Components of an integrated marketing plan
• Determine target customers
• Create value
• Plan marketing mix– Product– Price– Place– Promotion
Principles of Marketing 5e, © Pearson Education 2008 1-19
What is customer relationship management?
Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Principles of Marketing 5e, © Pearson Education 2008 1-20
Prius creates customer value
Principles of Marketing 5e, © Pearson Education 2008 1-21
Principles of Marketing 5e, © Pearson Education 2008 1-22
Outcomes of creating customer value
• Customer loyalty and retention
• Share of market
• Share of customer
• Customer equity
Principles of Marketing 5e, © Pearson Education 2008 1-23
? ? ? ? ? ? ? ? ? ?
Principles of Marketing 5e, © Pearson Education 2008 1-24
Figure 1.4 Customer relationship groups
Principles of Marketing 5e, © Pearson Education 2008 1-25
The new marketing landscape
• Sustainability
• Not-for-profit marketing
• The electronic marketplace
• The global marketplace
Principles of Marketing 5e, © Pearson Education 2008 1-26
The steps in the marketing process
• (1) analysing marketing opportunities
• (2) selecting target markets
• (3) developing the marketing mix
• (4) managing the marketing effort
Principles of Marketing 5e, © Pearson Education 2008 1-27
What’s to come
• Part 1– Marketing– Sustainable market– Strategic marketing
• Part 2– The environment– Markets– Marketing research
• Part 3– Relationship marketing– Segmentation and
positioning – Competitive strategy
• Parts 4-7– The marketing mix
Principles of Marketing 5e, © Pearson Education 2008 1-28
Figure 1.7 Influences on marketing strategy
Principles of Marketing 5e, © Pearson Education 2008 1-29
Market leader strategies
Market leader Market challenger
Market follower Market nicher
Principles of Marketing 5e, © Pearson Education 2008 1-30
Figure 1.8 The four Ps
Principles of Marketing 5e, © Pearson Education 2008 1-31
Four Ps or Four Cs
• Product
• Price
• Promotion
• Place
• Customer needs/wants
• Cost to the customer
• Communication
• Convenience
Principles of Marketing 5e, © Pearson Education 2008 1-32
Figure 1.9 An expanded model of the marketing process
Principles of Marketing 5e, © Pearson Education 2008 1-33
Discussing the concepts
• Why should we study marketing?• What role does marketing play in
satisfying human desires?• What are the differences between the
marketing management orientations?• What key challenges face businesses today?• Is the societal marketing concept good for
society?