Understanding Marketing

Kotler On Marketing - 1
Marketing is the human activity directed at satisfying
human needs and wants through an exchange process
- Philip Kotler 1980

Marketing is a social and managerial process by which

individuals and groups obtain what they want and need through
creating, offering and exchanging
products of value with others

-Philip Kotler 1991

 2014
Marketing is a process by which
companies create value for customers
and build strong customer relationships
to capture value from customers in
return
 And yet another one since we are at it.

Marketing is a process by which you make customers and keep them,

by satisfying their needs in a profitable manner

Customer /Consumer Acquisition Customer /Consumer Retention

Marketing effort
The Framework of Marketing

Economy

Competition

Place
Technology

Law
Price Consumer Product

Promotion

Company

Culture
The Framework of Marketing

Economy

Competition

Place
Technology

Law
Price Consumer Product

Promotion

Company

Culture
In sum - Underlying forces are creating new realities
Globalization gives businesses unprecedented access to
markets, creates price transparency, and drives growth and
GLOBALIZATION
innovation all leading to keener competition and the need
for better messaging

Commoditization of product and services places an

COMMODITIZATION increasing premium on turning marketing into a true
competitive advantage

Digital technology has affordably and radically changed the

DIGITIZATION availability, delivery and retrieval of information

Globalization has fostered a counter reaction A greater

sense of I. Marketing has splintered from mass marketing
INDIVIDUALIZATION
and broad segmentation to micro marketing and niche
segmentation
 Understanding the Marketplace
and Customer Needs
Core Concepts

Customer needs, wants, and demands

Market offerings
Customer Value and satisfaction
Exchanges and relationships
Markets
What needs do the following products
satisfy ?
Rice
Bicycles
Hula hoops
House plants
Ben10
Tattoo
Do people usually know what they want?
Think of 5 Products that did not exist
15 years ago?
 Famous last words...
I think there is a world market for maybe five
computers.
-Thomas Watson, chairman of IBM, 1943

"There is no reason anyone would want a

computer in their home.
- Ken Olsen, founder of Digital, 1977
 Famous last words

"Television won't be able to hold on to any market it

captures after the first six months. People will soon get
tired of staring at a plywood box every night."

- Darryl F. Zanuck, head of 20th Century Fox (movies) in

1946
 Famous last words

"The telephone may be appropriate for our American

cousins, but not here, because we havean adequate
supply of messenger boys.
- group of British experts, c.1900.
Do people understand what they
need?
Should consumers be led or
followed ?
Should consumers be led or followed ?

"Our plan is to lead the public with new products, rather than ask
them what they want. The public does not know what is possible,
but we do. So instead of doing a lot of market research, we try to
create a market by educating them"
- Akio Morita of Sony
Should consumers be led or followed ?

"In ten years of developing the minivan, not once did we get a
letter
from a housewife asking us to invent one."
(The reason Ford wouldn't develop it was exactly this
"proof" that there was no market.)
- Father of the minivan Hal Sperlich
2. Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
 And do consumers know what they want ?

Unarticulated needs

Todays Business
Articulated needs

Served UnServed
 However...
Marketing is a process by which you
make customers and keep them, by satisfying their needs
in a profitable manner

Customer /Consumer Acquisition Customer /Consumer Retention

Marketing effort
 Understanding the Marketplace
and Customer Needs
Market offerings are some combination of
products, services, information, or
experiences offered to a market to satisfy a
need or want
Marketing myopia is focusing only on
existing wants and losing sight of underlying
consumer needs
Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations
 2. Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a desired
object from someone by offering something in
return
 2. Understanding the Marketplace
and Customer Needs

Markets are the set of actual and potential

buyers of a product or service
 3. Designing a Customer-Driven
Marketing Strategy

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?
 3. Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Market segmentation refers to dividing the

markets into segments of customers
Target marketing refers to which segments
to go after
 3. Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Demarketing is marketing to reduce demand

temporarily or permanently; the aim is not to
destroy demand but to reduce or shift it
 3. Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

The value proposition is the set of

benefits or values a company promises to
deliver to customers to satisfy their needs
3. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production concept is the idea that
consumers will favor products that are
available or highly affordable
Product concept is the idea that consumers
will favor products that offer the most quality,
performance, and features. Organizations
should therefore devote its energy to making
continuous product improvements.
Selling concept is the idea that consumers
will not buy enough of the firms products
unless it undertakes a large scale selling
and promotion effort
Marketing concept is the idea that
achieving organizational goals depends on
knowing the needs and wants of the target
markets and delivering the desired
satisfactions better than competitors do
 The selling concept

Starting point focus means ends

factory Existing Selling & Profit through

product promotion sales volume
 The marketing concept

Starting point focus means ends

Customer Integrated Profit through

market
needs marketing customer satisfaction
The raison d'tre of three companies for being in business

Product- oriented Market - oriented

company definition definition

we run theme parks "To make people

disney happy.

"To solve unsolved

we manufacture message notes, problems innovatively
3M Data storage devices..

unilever we manufacture detergents,soaps, Meeting the every day

shampoos needs of people,
everywhere
Societal marketing concept is the idea that
a company should make good marketing
decisions by considering consumers
wants, the companys requirements,
consumers long-term interests, and
societys long-run interests
 4. Preparing an Integrated Marketing
Plan and Program
The marketing mix is the set of tools (four
Ps) the firm uses to implement its marketing
strategy. It includes product, price, promotion,
and place.
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended value to chosen
customers.
5. Building Customer Relationships
Customer Relationship Management (CRM)

The overall process of building and

maintaining profitable customer
relationships by delivering superior
customer value and satisfaction
Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction
Building Customer Relationships
Customer Relationship Levels and Tools