Principles of Marketing
Jatin Vaid
Chapter 1
Marketing: Managing Profitable
Customer Relationship
What is Marketing?
Marketing is the process by which companies
create value for customers & build strong
customer relationships in order to capture value
from customers in return.
Marketing is all about” satisfying customer
needs”
Definition of Marketing:
According to American Marketing Association
(AMA):
Marketing is the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that
have value for customers, clients, partners,
and society at large.
Goal of Marketing:
To attract new customers by promising
superior value.
To keep & grow current customers by
delivering satisfaction
A simple model of the marketing
process
Create value for customers & Capture value
build customer relationships from customers
in return
Construct an Capture value
integrated Build profitable from
Understand the Design a customer
marketing relationships & customers to
marketplace & driven marketing
program that create customer create profits
customer needs & strategy
delivers delight & customer
wants
superior value equity.
Core definitions
Needs: Needs are the basic human requirements
e.g food, water, air, shelter.
Wants: Are the form human needs take as shaped
by culture and individual responsibility and directed towards
specific objects.
Demands: Human wants that are backed by willingness and
ability to pay.
Market offering: Some combination of products, services,
information, or experiences offered to a market to satisfy a
need or want. Eg, banks, airlines.
Marketing Myopia: The mistake of paying more
attention to the specific products a company offers
than to the benefits & experiences produced by these
products.
Exchange: Process of obtaining a desired product
from someone by offering something in return.
Market: The set of all actual & potential buyers of a
product or service.
Marketing Management: The art & science
of choosing target markets & building
profitable relationships with them.
Value Proposition: A company’s value
proposition is the set of benefits or values it
promises to deliver to consumers to satisfy
their needs.
Winning Marketing Strategy
What customers will we serve?
(what’s our target market)
- Divide the market into customer segments.
- Select which segments will it go after.
How can we serve these customers best?
(what’s our value proposition)
- Differentiating & positioning the product in minds
of consumers.
Five Organizational Concepts
1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Societal Marketing Concept
Production Concept
The idea that consumers will favor products that
are available & highly affordable & that the
organization should therefore focus on improving
production & distribution efficiency.
Product Concept
The idea that consumers will favor products that
offer the most quality, performance, & features
thereby devoting a company’s energy to making
continuous product improvements.
Make & sell concept
Focus on making superior products
No customer input
Less competitor product examination.
“ Marketing Myopia”
Selling Concept
The idea that consumers will not buy enough of
the firms products unless it undertakes a large
scale selling & promotion effort.
Practiced most aggressively with unsought
goods eg, insurance, encyclopedias.
Focuses on creating sales-transactions rather
than long term profitable relationships.
“Political Relationships”
Marketing Concept
The marketing management philosophy that
achieving organizational goals depends on
knowing the needs & wants of target markets
& delivering the desired satisfactions better
than competitors.
Sense & respond philosophy.
Finding right products for customers
Customer-driving marketing – understanding
customer needs even better than the customers
themselves.
Contrast between Sales Concept & Marketing
Concept
Starting Point Focus Means Ends
Factory Products Selling &Promoting Profits through
sales volume
a. THE SELLING CONCEPT
Target Customer Integrated Profits through
Market Needs Marketing customer satisfaction
b. THE MARKETING CONCEPT
Societal Marketing Concept
Holds that marketing strategy should deliver
value to customers in a way that maintains or
improves both consumers & the societies well-
being.
Society
(Human Welfare)
Societal
marketing
concept
Consumers Company
(Want Satisfaction) (Profits)
Customer Relationship
Management
CRM is the process of building & maintaining
profitable customer relationships by delivering
superior customer value & satisfaction.
Customer Perceived Value: The customers
evaluation of the difference between all the
benefits & all the costs of a market offering
relative to those of competing products.
Customer Satisfaction depends on a product’s
perceived performance relative to a buyer’s
expectations.
Performance = Expectation
Customer Satisfaction= Customer Loyalty= Better
Performance
Customer delight- promising only what a
company can deliver, & then delivering more
than promised.
Thank You!!
