Course Title: Principles of Marketing (Theory)

Course code: AGBM 225

Credit Hour: 3

Course Instructors
Mofasser Rahman Md.Ghulam Rabbany
Assistant Professor Associate Professor
[email protected] [email protected]

Department of Agribusiness and Marketing

Sher-e-Bangla Agricultural University, Dhaka-1207
I’ll try to cover the following topics:

Chapter 1 - Marketing: Creating and Capturing Customer Value

Chapter 3 - Analyzing the Marketing Environment
Chapter 4 - Consumer Market and Consumer Buying Behavior
Chapter 5 - Business Markets and Business Buyer Behavior
Chapter 7 - Customer-Driven Marketing Strategy and Creating
Value for Target Customers
Chapter 8 - New Product Development and Product Life-Cycle
Strategies
Getting a Marketing Perspective

Chapter 1- slide 4
 Components of a Business

• Finance- Capital- People

• Management
• Marketing

Chapter 1- slide 5
 Why is Marketing Important?
• To let people know you exist
• To let them be inform about your product
or service
• To make goods and services available when
it is needed and where it is need and in the
right quantity
• To satisfy customers by delivering on what
you promised in your marketing messages

Chapter 1- slide 6
 Q: What are the factors
impacting marketing decisions
today?

Chapter 1- slide 4
Factors Impacting Marketing Today

• Knowledgeable Customer
•Increased buying power
•Intense competition
• Greater variety of goods and services
• Increased information from a variety of sources
• Enhanced shopping convenience

Chapter 1- slide 4
 Factors Impacting Marketing
Today cont’d
•New Technologies and platforms- Websites, Internet,
intranet, social media, phones ect. can provide
companies with powerful new information and sales
channel
•Online software can facilitate purchase, training,
recruiting
•Companies can collect scientific information about
markets, customers, prospects and competitors from a
variety of sources and be in a position to make
comparisons and decisions
Chapter 1- slide 6
 Factors Impacting Marketing
Today

•Companies can send value- added and incentives eg.

Coupons, samples, rebates, cash- back and information
to targeted customers

•Companies can customize offerings and services to

individual customers

Chapter 1- slide 6
 Factors Impacting Marketing
Today

•Greater distribution channel

•Variety in prices

Chapter 1- slide 6
 Myths Impacting Marketing
• Marketing is selling.

• Marketing is Public relations.

•The best product or service idea will win and be

successful.

•You should cut back on your marketing and

advertising expenditures in a recession.

• Anyone can be a successful marketer

Chapter 1- slide 6
 Myths of Marketing

Doing any marketing at all, is better than doing

nothing.( shooting in the dark)

Great marketing is dreamed up by highly paid

executives who make ads and brochures and websites
and then let them loose in the marketplace.

Use short copy. People won't read long copy.

(NB.People need information not clutter)

Chapter 1- slide 10
 Myths of Marketing

• Marketing should entertain and amuse

•Word-of-mouth marketing is all that a great

business needs.
•Once your business has a solid customer
base, it can cease marketing.

•Repetition of a marketing message is boring.

Chapter 1- slide 12
 Marketing Overview
Marketing is part of all of our lives and
touches us in some way every day. To be
successful each company that deals with
customers on a daily basis must not only be
customer-driven, but customer-obsessed.
The best way to achieve this objective is to
develop a sound marketing function within
the organization.

Chapter 1- slide 12
 Purpose of Marketing
• To build awareness, credibility and trust with your
preferred prospect or customer
• To be ‘out there’, networking, writing articles that
educate your preferred prospects, being active in
social media circles, getting recommendations,
testimonials and referrals, delivering what you
promised, going above and beyond for your
clients.

Chapter 1- slide 16
 Purpose of Marketing cont’d

– To facilitate the decision-making process of

your preferred prospect or customer;
• The process is accomplished by providing
valuable educational content so that your
prospects have all the information they
require to make a good decision when
buying the service or product you sell.

Chapter 1- slide 17
 Purpose of Marketing cont’d
• Is to lower the risk for your preferred
prospect or customer to purchase from
your competitor

• Is to make the purchasing decision easy

through: availability, trial, specials, brand
identification and quality service

Chapter 1- slide 18
 Marketing Overview summary
Aside from the most important decisions of a
company which are: Vision, mission and
objectives , the first marketing strategy question a
company needs to ask is, “What consumers will
we serve?” This is market segmentation and
targeting.

The second marketing strategy question is, “How can

we best serve targeted customers?” This is
differentiation, branding and positioning.

Chapter 1- slide 16
 Marketing Overview Summary
cont’d
With its marketing strategy decided, the company
now constructs a marketing Program-consisting
of the four marketing mix elements, the 4 Ps.

Perhaps the most important step in the marketing

process involves building value-laden,
profitable relationships with target customers.

Chapter 1- slide 16
Copyright © 2010 Pearson Education, Inc. Chapter 1- slide 18
Publishing as Prentice Hall
 The Holistic Marketing Concept
Marketing Channels
Communications
Dept. Senior Other
Mgt. Dept.
Products &
Services

Internal
Marketing Integrated
Marketing

Holistic Marketing
Social Relationship
Responsibility Marketing
Marketing

Ethics Legal Community

Customers Channels Partners
Environment

Chapter 1- slide 19
 Chapter One

Marketing: Creating and Capturing

Customer Value

Copyright © 2009 Pearson Education, Inc. Chapter 1- slide 20

Publishing as Prentice Hall
Creating and Capturing Customer
Value
Topic Outline
• What Is Marketing?
• Understand the Marketplace and Customer Needs
• Designing a Customer-Driven Marketing Strategy
• Preparing an Integrated Marketing Plan and Program
• Building Customer Relationships
• Capturing Value from Customers
• The Changing Marketing Landscape

Chapter 1- slide 2
 What Is Marketing?

Marketing is a process by which companies

create value for customers and build strong
customer relationships to capture value from
customers in return.

Chapter 1- slide 3
 What Is Marketing?

• Marketing is about managing profitable customer

relationships
– Attracting new customers
– Retaining and growing current customers

Chapter 1- slide 4
What Is Marketing?
The Marketing Process

Chapter 1- slide 5
The is the nation’s twenty-fourth
largest advertiser with an annual budget of
more than $2 billion.
1. Procter & Gamble Company
2. Boeing Company
3. Levi Strauss & Co.
4. U.S. Government
 Answer

• 4. U.S. Government
 Understanding the Marketplace
and Customer Needs
Core Concepts involved

You must understand:

• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets

Chapter 1- slide 6
 Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands

• States of deprivation
• Physical—food, clothing, warmth, safety
Needs • Social—belonging and affection
• Individual—knowledge and self-expression

Wants • Form that needs take as they are shaped by culture

and individual personality

Demands • Wants backed by buying power

Chapter 1- slide 7
Marketing is .
1. the same as advertising and sales
2. not used by small corporations
3. about satisfying customer needs
4. making a profit
 Answer!

• 3. about satisfying customer needs

Marketing is .
1. part of manufacturing
2. part of the finance department
3. managing customer relationships
4. sales promotion
 Answer!

• 3.managing customer relationships

The most basic concept underlying marketing
is that of satisfying .
1. profits
2.products
3.human needs
4. services
 Answer!

3. human needs
 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

Chapter 1- slide 8
 Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations

Customers
• Value and
satisfaction

Marketers
• Set the right level of
expectations
• Not too high or low

Chapter 1- slide 9
 Value and Satisfaction

• Perceived Value
– The customers’ evaluation of the difference
between benefits and costs.
– Customers often do not judge values and costs
accurately or objectively.
• Customer Satisfaction
– Product’s perceived performance relative to
customers’ expectations.

Chapter 1- slide 10
Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a desired
object from someone by offering something
in return.

Chapter 1- slide 11
Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product

Chapter 1- slide 12
 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?

Chapter 1- slide 13
Selecting Customers and Creating
Value
• What customers will we serve?
– Marketers select customers that can be served
profitably- target market
• How can we serve these customers best?
– By defining a value proposition
– Includes the set of benefits or values a company
promises to deliver to consumers in order to satisfy
their needs.

Chapter 1- Slide-14
 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.

Chapter 1- slide 15
 Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Demarketing :Efforts aimed at discouraging (not
destroying) the demand for a product which (1) a firm
cannot supply in large-enough quantities, or (2) does
not want to supply in a certain region where the high
costs of distribution or promotion allow only little profit
margin.
Common demarketing strategies include higher prices,
scaled-down advertising, and product redesign.

Chapter 1- slide 16
 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.

Such value proposition differentiate one

brand from another.

Chapter 1- slide 17
 Marketing Management orientations

• Marketing Management wants to design

strategies that will build profitable
relationships with target consumers. But
what philosophy should guide these
strategies?

Chapter 1- slide 18
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal

concept concept concept concept concept

Chapter 1- slide 19
 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.
Management should focus on improving
production and distribution efficiency

Chapter 1- slide 20
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Product concept is the idea that consumers
will favor products that offer the most
quality, performance, and features.
Organization should therefore devote its
energy to making continuous product
improvements.

Chapter 1- slide 21
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept is the idea that consumers

will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort.
This concept is typically practiced with
unsought goods-those that buyers do not
normally think of buying, such as insurance.

Chapter 1- slide 22
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

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.
Chapter 1- slide 23
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing concept

is the idea that a company
should make good marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long-term
interests, and society’s long-
run interests.

Chapter 1- slide 24
Designing a Customer-Driven
Marketing Strategy

Chapter 1- slide 25
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.
Chapter 1- slide 26
Building Customer Relationships
Customer Relationship Management (CRM)
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
• It the most important concept of modern
marketing
• It deals with acquiring, growing and keeping
customers.

Chapter 1- slide 27
Building Customer Relationships
Relationship Building Blocks: Customer Value
and Satisfaction

Customer- Customer
perceived value satisfaction
• The difference • The extent to
between total which a product’s
customer value perceived
and total performance
customer cost matches a
buyer’s
expectations

Chapter 1- slide 28
Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships

Full
Partnerships

Chapter 1- slide 29
 Building Customer Relationships
The Changing Nature of Customer
Relationships
• Relating with more carefully selected
customers uses selective relationship
management to target fewer, more profitable
customers.
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, Websites, online
communities and social networks.

Chapter 1- slide 30
 Building Customer Relationships

Partner relationship management involves

working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers.

Chapter 1- slide 31
 Building Customer Relationships
Partner Relationship Management
• Partners inside the company is every
function area interacting with customers
– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
Chapter 1- slide 32
 Building Customer Relationships
Partner Relationship Management
• Supply chain is a channel that stretches
from raw materials to components to final
products to final buyers
• Supply management
• Strategic partners
• Strategic alliances

Chapter 1- slide 33
 Capturing Value from Customers
Creating Customer Loyalty and Retention
• Customer lifetime value is the value of the
entire stream of purchases that the
customer would
make over a
lifetime of
patronage.

Chapter 1- slide 34
 Capturing Value from Customers
Growing Share of Customer

Share of customer is the portion of the

customer’s purchasing that a company gets
in its product categories.

Chapter 1- slide 35
 Capturing Value from
Customers
Customer equity is
the total combined
customer lifetime
values of all of the
company’s
customers.

Chapter 1- slide 36
 Capturing Value from Customers
Building Customer Equity
• Building the right relationships with the
right customers involves treating
customers as assets that need to be
managed and maximized.
• Different types of customers require
different relationship management
strategies
– Build the right relationship with the right
customers

Chapter 1- slide 37
Chapter 1- slide 38
 The Changing Marketing
Landscape

Major Developments

Rapid
Digital age
globalization

Ethics and
Not-for-profit
social
marketing
responsibility

Chapter 1- slide 39
So, What Is Marketing?
Pulling It All Together

Chapter 1- slide 40
REVISION
 Which of the following reflects the
marketing concept?

• A) "The supplier is king."

• B) "Marketing should be viewed as hunting and not
gardening."
• C) "This is what I make; won't you please buy it?"
• D) "This is what I want; won't you please make it?"
• E) "Customers need to be told where they want to go."
• Answer: D
• Reflective Thinking
• Skill: Application
 Answer: D

Reflective Thinking
Skill: Application
 Some fast-food restaurants offer tasty and convenient food at
affordable prices, but in doing so they contribute to a national
obesity epidemic and environmental problems. These fast-food
restaurants overlook the philosophy .

• A) marketing concept
• B) product concept
• C) production concept
• D) societal marketing concept
• E) selling concept
 Answer: D

•Reflective Thinking
•Skill: Application
 Members of the sales team at Dekko International visit only
prospective customers who purchase a minimum of $50,000 of
insulated wire per year. Dekko is using .

• A) selective relationship management

• B) a frequency marketing program
• C) a club marketing program
• D) demarketing
• E) a value proposition
 Answer: A

• Reflective Thinking
• Application