Principles of Marketing

Lecture-3

Summaryof

Lecture-2

Road MapUnderstanding Marketing

and Marketing ProcessCore Marketing Concepts

Core Marketing Concepts

Needs

Markets

Transactions

Wants

Demands

Exchange Products

Today’s Topics

Marketing Functions

Customer Relationship Management

Marketing Functions

Costs and Functions of Marketing

On the average, 50% of all product costs can be traced directly to marketing

What does the customer receive in exchange for the 50% marketing costs?

UniversalMarketingFunctions

Information Buying

Risk Taking Selling

Financing Transporting

Standardizingand Grading Storing

MarketingFunctions

Eight Universal Marketing Functions

1. Buying

2. Selling3. Transporting

4. Storing

5. Standardizing and grading

6. Financing

7. Risk Taking

8. Securing Marketing Information

Marketing ManagementMarketing management is “the

art and science of choosing target markets and building profitable relationships with them.”Creating, delivering and

communicating superior customer value is key.

Demarketing…Marketing to reduce

demand temporarily or permanently; the aim is not to destroy demand but only to reduce or shift it.

Relationship Marketing

The process of establishing and maintaining mutually beneficial exchange relationships with customer and other stakeholders

Two components:

Customer Focus

Competitive Advantage

Change In Perspective

Yesterday: Here is this great product. Don’t you want to buy it?

Today: Here is what I need. Can you make it?

Direct Marketing Channels

Ways to market to your customers on a one-to-one basis–Face-to-face channels–Direct Mail–Catalog–Telemarketing–On-line marketing

Customer Focused Marketing

Basic Philosophy:– It is more profitable to

keep loyal customers than to constantly be attracting new ones

Lifetime Value of a Customer

..the revenues and intangible benefits (referrals, customer feedback, etc.) that a customer brings to the seller over an average lifetime in the category, less the amount the company must spend to acquire, market to, and service the customer.

Customer Focused Marketing

How do I go about increasing the average lifetime value of my customers?

1. Identify your most valuable customers

2. Build a learning relationships with them so you can…

3. Provide a sustainable advantage over your competition (Create Value)

Customer Relationship Management

CRMCRM – Customer relationship

management . . .“is the overall process of building

and maintaining profitable

customer relationships by

delivering superior customer

value and satisfaction.”

…the new view is that marketing is the science and art of finding, retaining, and growing profitable customers.

CRM It costs 5 to 10 times MORE to attract a

new customer than it does to keep a current customer satisfied.

Marketers must be concerned with the lifetime value of the customer.

Relationship building blocks: Customer value and Satisfaction

What is CRM?Strategies focused on

increasing customer satisfaction, loyalty, and profitability by leveraging superior customer knowledge acquired, stored, and acted upon with the aid of information technology

What are the goals of CRM?

The idea of CRM is that it helps businesses use technology to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can:

Provide better customer service Make call centers more efficient Help sales staff close deals faster Simplify marketing and sales

processes Discover new customers

Value of Loyalty Firms have realized the value of customer

retention -- Facts:

Winning a new customer is usually 5- 10 times more costly than retaining an existing customer

Customers are usually more profitable the longer you keep them.

Why?

The Value of Loyalty Goes

Beyond Single Customers

Loyal customers provide more and more credible referrals

But the angry gossip of disloyal customers can devastate a firm!

Let’s stop

it here

Next….

Marketing in Historical perspective and Evolution of Marketing