Marketing

Fundamentals II
Session 1
Prof. Ouijdane Iddoub
Learning objectives
• Define marketing and outline the steps in the marketing
process.
• Understanding the Marketplace and Customer Needs
• Identify the key elements of a customer-driven
marketing strategy and discuss the marketing
management orientations that guide marketing strategy
• Discuss customer relationship management and identify
strategies for creating value for customers and capturing
value from customers in return
• Describe the major trends and forces that are changing
the marketing landscape in this age of relationships.
Let’s take a moment and think ….

• In your own words, what is marketing? Write down

your definition. Does your definition include such
key concepts as customer value and relationships?
• What does marketing mean to you? How does it
affect your daily life?
• What brand of athletic shoes did you purchase last?
Describe your relationship with Nike, Adidas,
Reebok, Puma, Converse, New Balance, or
whatever brand of shoes you purchased.
What is Marketing?
• Broadly defined, marketing is a social and
managerial process by which individuals and
organizations obtain what they need and want
through creating and exchanging value with others.

• We define marketing as a process by which

companies create value for customers and build
strong customer relationships to capture value from
customers in return.
The Marketing Process
• In the first four steps, companies work to understand
consumers, create customer value, and build strong
customer relationships. In the final step, companies
reap the rewards of creating superior customer
value. By creating value for consumers, they in turn
capture value from consumers in the form of sales,
profits, and long-term customer equity.
The Marketing process : Creating and
Capturing Customer Value
Understanding the Marketplace
and Customer Needs
• Marketing is all about creating value for customers.
So, as the first step in the marketing process, the
company must fully understand consumers and the
marketplace in which it operates.
• The core marketplace concepts are needs, wants,
and demands; market offerings (products, services,
and experiences); value and satisfaction;
exchange and relationships; and markets.
Understanding the Marketplace
and Customer Needs
• Needs: States of felt deprivation.
• Wants :The form human needs take as they are
shaped by culture and individual personality.
• Demands: Human wants that are backed by buying
power.
Understanding the Marketplace
and Customer Needs
• Consumers’ needs and wants are fulfilled through
market offerings—some combination of products,
services, information, or experiences offered to a market
to satisfy a need or a want. Market offerings are not
limited to physical products. They also include services—
activities or benefits offered for sale that are essentially
intangible and do not result in the ownership of anything.
Examples include banking, airline.

• Many sellers make the mistake of paying more attention

to the specific products they offer than to the benefits
and experiences produced by these products. These
sellers suffer from marketing myopia.
Customer Experience

• https://www.youtube.com/watch?v=yzn6A0_nRE8
Customer Value and Satisfaction

• Marketers must be careful to set the right level of

expectations. If they set expectations too low, they
may satisfy those who buy but fail to attract enough
buyers. If they set expectations too high, buyers will
be disappointed.
• Customer satisfaction The extent to which a
product’s perceived performance matches a
buyer’s expectations.
• Customer value and customer satisfaction are key
building blocks for developing and managing
customer relationships
Customer Value and Satisfaction

• The value proposition is fulfilled through a market

offering, which delivers customer value and
satisfaction, resulting in long-term exchange
relationships with customers.
Marketing Management Orientations

• There are five alternative concepts under which

organizations design and carry out their marketing
strategies: the production, product, selling,
marketing, and societal marketing concepts.
Marketing Management Orientations

• Production concept The idea that consumers will

favor products that are available and highly
affordable; therefore, the organization should focus
on improving production and distribution efficiency.

• Product concept The idea that consumers will favor

products that offer the most quality, performance,
and features; therefore, the organization should
devote its energy to making continuous product
improvements.
Marketing Management Orientations

• Selling concept The idea that consumers will not buy

enough of the firm’s products unless the firm undertakes
a large-scale selling and promotion effort.

• Marketing concept A philosophy in which achieving

organizational goals depends on knowing the needs
and wants of target markets and delivering the desired
satisfactions better than competitors do.

• Societal marketing concept The idea that a company’s

marketing decisions should consider consumers’ wants,
the company’s requirements, consumers’ long-run
interests, and society’s long-run interests.
Building Customer Relationships

• Customer relationship management The overall process

of building and maintaining profitable customer
relationships by delivering superior customer value and
satisfaction.
• The aim of customer relationship management and
customer engagement is to produce high customer
equity, the total combined customer lifetime values of all
of the company’s customers. The key to building lasting
relationships is the creation of superior customer value
and satisfaction.
• Different types of customers require different customer
relationship management strategies. The marketer’s aim
is to build the right relationships with the right customers
Building the Right Relationships with
the Right Customers
Building the Right Relationships with
the Right Customers
• Strangers show low potential profitability and little
projected loyalty. There is little fit between the
company’s offerings and their needs. The
relationship management strategy for these
customers is simple: Don’t invest anything in them.
• Butterflies are potentially profitable but not loyal.
There is a good fit between the company’s offerings
and their needs. However, like real butterflies, we
can enjoy them for only a short while and then
they’re gone.
Building the Right Relationships with
the Right Customers
• True friends are both profitable and loyal. There is a
strong fit between their needs and the company’s
offerings. The firm wants to make continuous
relationship investments to delight these customers
and nurture, retain, and grow them. It wants to turn
true friends into true believers, who come back
regularly and tell others about their good
experiences with the company
• Barnacles are highly loyal but not very profitable.
There is a limited fit between their needs and the
company’s offerings.
The Changing Marketing Landscape

“The pace of change is so rapid that the ability to

change has now become a competitive advantage.”
The Changing Marketing Landscape

• Digital and social

media marketing
Using digital marketing
tools such as Web
sites, social media,
mobile apps and ads,
online video, e-mail,
and blogs that
engage consumers
anywhere, at any
time, via their digital
devices.
The Changing Marketing Landscape

• Although the new digital and social media offer

huge potential, most marketers are still learning how
to use them effectively. The key is to blend the new
digital approaches with traditional marketing to
create a smoothly integrated marketing strategy
and mix.
An Expanded Model of the Marketing
Process