BMAR 01

Marketing

* creation and communication of value to customers
* involves the customer’s maintenance of relationships that should last for lifetime
* link between society’s material requirements for its needs and wants
* must satisfy human needs and wants through the exchange process and the building of long-term relationships
* Interacting Components of Marketing

art and science of creating tangible products or services and finding the market, getting and retaining them to attain profitable operations.

American Marketing Association

“Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

Dr. Philip Kotler

“A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others.”

Company & Market

Customer & Competition

2 Interacting Components of Marketing

Need

* consumer’s desire for a product or service
* product or service must have specific benefits that will satisfy this
* food, clothing, and shelter
* marketers must be able to provide them to human population

Wants

* higher-level human needs
* appeal more to the emotions
* development of technology and different electronic gadgets
* marketers must continuously improve technological inventions to sustain customer wants

Garovillas (2004)

“the marketing concept is a business philosophy, which holds that the key to achieving organizational goals consists of determining the needs and wants of target markets and delivering the satisfaction more effectively and efficiently than competitors do.”

Customer Oriented

Coordinated Activities

Performance Target Goals and Objectives

3 Concepts of Marketing

Customer Oriented

the whole marketing organization and its operating staff must be focused on determining what will satisfy the needs and wants of the target customers

Coordinated Activities

must start in the product planning process

Product

key element that the customer wants to buy that is worth his money

**Price**

customers would like to get his money’s worth

**Place** of Distribution

must be within the customer’s reach

Promotional Activities

must be appealing for the customer to decide which product to purchase

Performance Target Goals and Objectives

* these hinge on the increase in sales volume and customer’s patronage
* When planning is properly coordinated, it will result in the most effective way of satisfying the customer’s needs and wants


* sales volume and profit objective will be realized

Capturing Marketing Insights

Effective Financial Management System

Value of Human Resources

Production Process

Presence of Competitors

5 Factors for Developing Marketing Concepts

Capturing Marketing Insights

* overall direction must focus on its vision and mission
* organizational goals and objectives must be directed towards the creation of value to its customers
* functional areas in the marketing organization must be focused towards the building of long-lasting relationship with its target market

Effective Financial Management System

* this system in the procurement of quality and affordable materials for processing of the product is a vital component in effective operation of the marketing system
* competition in the market is based on affordable quality products where labor and materials interplay in their production
* financing the marketing program will develop effective sales program that will bring in sustainable profitability

Value of Human Resources

* all business activities need human resources in their operation
* employees must be committed in the production of quality products and the delivery of quality service
* they must develop work ethics and strong commitment to the marketing efforts of the organization
* sustainable development and progress rest with people who are willing to put all efforts towards the organizational objective of quality products and service

Production Process

* the process must conform to standards in terms of product quality
* the race to economic profitability is the production of products that shall satisfy the customer’s wants and needs
* the role of marketing is to sell more products, but it must conform to customer demand
* marketing efforts will turn them into profitable inventory

Presence of Competitors

* marketing outfit must develop strategies in capturing their target market and develop and sustained patronage
* marketing strategies must develop customer loyalty to the brand or the product

Traditional concept marketing

a marketing strategy a company uses to determine if it can produce a viable product consumer want or need, whether the company can produce enough products to fill the need, and the marketing method by which the need can be filled

Production

Marketing

Sales

Relationship

Societal

5 Traditional Approaches

Production Concept

focuses on the internal potentials of the company and not based on the desires and needs of the market

Marketing Concept

organization must try hard to find out and satisfy the needs and wants of consumers while at the same time accomplishing the organizational goals

Sales Concept

refers to the idea that people will buy more goods and services through personal selling and advertising done aggressively to push them in the market

Relationship Concept

an approach that centers on maintaining and improving value-added long-term relationships with current customers, distributors, dealers and suppliers

Societal Concept

views that organizations must satisfy the needs of consumers in a manner that gives for society’s benefit

Consumption of Goods

Consumer Satisfaction

Choice of Goods or Service

Quality of Life

4 Goals of Marketing and their Social Effects

Maximize the Consumption of Goods

* aggressive marketing strategies and policies had increased the consumption of goods and services
* demand of the market is tremendous
* sellers face many challenges on what products to offer
* buyers want quality products at reasonable price and the most convenient location.
* the marketing job is to stimulate greater product consumption
* greater production requires consumption of material inputs and more goods in the market that create more employment
* maximum consumptions generate economic development for the nation.

Maximize Consumer Satisfaction

* market demand is varied
* customer satisfaction is the challenge of the marketing organization
* measurement of customer satisfaction is difficult
* customer may be satisfied with the product the marketing people produce but it may harm the environment

Maximize Choice of Goods or Service

* the goal of marketing is to maximize the variety of the product in the market and provide consumers a wide assortment of choices
* the main objective is for customers to find the goods that will satisfy their biological needs as well as their emotional and social wants
* development of new products needs research but that will mean time and costs
* consumers must spend time studying the benefits of the production of goods

Maximize the Quality of Life

* the improvement of the quality of life is the target of marketing people
* the quality of life is difficult to measure
* life satisfaction is more than the physical comfort

Focusing on customer wants and needs

Integrating all the organization’s activities

Achieving the organization’s long-term goals

3 Goals of Marketing

Key performance indicators

* used to check that the marketing activities of a company are on track
* specific metrics which are used to track performance to make sure the firm is on track to meet specific objectives

Traditional marketing

* an umbrella term that covers the wide array of advertising channels we see daily
* may include print media, billboard and TV advertising, flyer and poster campaigns and radio broadcast advertising
* does not consider the customer they are selling to
* company-focused
* concerned with the market or industry in which the company operates in

Ansoff's Matrix

a theory that proposes products/services fall into one of four categories depending on the market and the product released

Product

Place

Promotion

Price

Packaging

Positioning

(6) 7 P's of Marketing Mix

Contemporary Marketing

* marketing strategies that are consumer focused
* offers products and services based on what the target market desires rather than what the company wants them to have, thereby, offering greater support for their customers and becoming able to take advantage of more advanced marketing funnels to track progress

B2B

B2C

Brand

Cloud

Telemarketing

Guerrilla

Push

Influencer

8 Types of Marketing

Search Engine Optimization

Pay per Click Advertising

Email

Referral

Affiliate

Video

Inbound

Green

8 Emerging Types of Marketing

Search engine optimization

concerned with increasing a business’ visibility and rankings on search engine result pages

Pay per Click Advertising

advertising presented on search engine result pages or web pages where the advertiser is only charged based on the number of times someone clicks on the ads to go to the advertiser's targeted website

Email Marketing

* marketing based on the distribution of messages through emails
* provides direct contact with customers and allows businesses to create relationships with their customers

Referral Marketing

* marketing where an individual or customer pleased with the results gotten from a product refers the product to another person
* can provide great results especially when the person referring is an Influencer in that industry

Affiliate Marketing

a prominent type of internet marketing where a third party promotes a product and earns commission

Video Marketing

* one of the most interactive types of online marketing
* a great way to raise awareness about a business or product
* a great way to pass messages to target customers

Inbound Marketing

* focuses on different tactics to draw consumers in and convince them to buy goods
* one the result-oriented types of marketing that uses content to drive results
* a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience (Content Marketing)

Green Marketing

refers to the process of selling products and/or services based on their environmental benefits


1. Being genuine
2. Educating the customers
3. Giving customers an opportunity to participate

Relationship Marketing

* involves creating, maintaining and enhancing strong relationships with customers and other stakeholders
* marketing is moving away from a focus on individual transactions and towards a focus on building value-laden relationships and marketing networks
* oriented more towards the long term
* requires that all the company’s departments work together with marketing as a team to serve the customer
* involves building relationships at many levels – economic, social, technical and legal – resulting in high customer loyalty
* a strategy designed for customer loyalty, interaction, and long-term engagement to be fostered
* designed to develop strong connections with customers by providing them with information directly suited to their needs and interests by promoting open communication
* a facet of customer relationship management

Basic

Reactive

Accountable

Proactive

Partnership

5 Different Levels of Relationships

Basic

the company salesperson sells the product but does not follow up in any way

Reactive

the salesperson sells the product and encourages the customer to call whenever he or she has any questions or problems

Accountable

* the salesperson phones the customer a short time after the sale to check whether the product is meeting the customer’s expectations
* the salesperson also solicits from the customer any product improvement suggestions and any specific disappointments

Proactive

the salesperson or others in the company phone the customer from time to time with suggestions about improved product use or helpful new products

Partnership

the company works continuously with the customer and with other customers to discover ways to deliver better value

Customer Relationship

* development of an ongoing connection between a company and its customers
* involves marketing communications, sales support, technical assistance and customer service
* a big part of marketing
* an interaction with current customers and potential ones

Serrano

“Relationship Marketing includes activities aimed at developing and managing trusting and long-term relationships with larger customers.”

focuses on the long-term rather than the short-term.

focuses on partners and customers rather than on the company’s products.

puts more emphasis on customer retention and growth than on customer acquisition.

relies on cross-functional teams rather than on departmental-level work.

relies more on listening and learning than on talking.

5 Characteristics of Relationship Marketing

Consistent customer experience

Customer Feedback

Customer Profitability

Customer advocate

Innovation

5 Benefits in Developing and Implementing Customer Relationship

Understanding Customer Characteristics

Delivery and Meeting Expectations

Repeat Business

Prevents Negative Transition

Word-of-Mouth Marketing

Reduced Marketing Cost

Identification with the Company

Product Market Expansion

8 Benefits of Relationship Marketing

Understanding Customer Characteristics

* the company can segregate its customers into groups based on their characteristics like purchasing power, frequency and volume of sale transactions
* helps the company get valuable feedback from its customers and understand their needs and expectations

Delivery and Meeting Expectations

* if the company knows what its customers’ needs are, it will help reduce wastage due to trial and error methods
* it is easier to create a product if the features and specifications of the product are known

Repeat Business

* sellers should maintain good attitude to the buyers.
* by doing this, buyers will feel that they do not need to switch sellers.

Prevents Negative Transition

* trust and loyalty go hand in hand and it is super beneficial for all business
* helps prevent customers from turning to competitors

Word-of-Mouth Marketing

* satisfied existing customer is more likely to recommend a product/service to a prospective customer
* Apart from referrals, there are several other ways to increase customer satisfaction by employing methods of utilizing social networking websites, blogs, informal surveys, benefits on loyalty cards, timely response to complaints and requests
* retention equity is improved by enhancing customer satisfaction.

Reduced Marketing Cost

benefits also include lesser costs and more value creation

Identification with the Company

* the benefits are reaped both by the company and the customers
* helps customers identify more with the company
* keeping your communication lines open and keeping in touch with the customers makes them feel like they are being valued

Product Market Expansion

the company’s employees must be ready to deliver beyond the company’s boundaries on customer demand

Customer loyalty

* founded on excellent customer services
* compasses other functions such as sourcing, operating, processing, communication, human resource services, administration, finance and accounting

Customer value

satisfaction derived from what a customer may experience or expect by choosing a particular action relative to the cost of that action

Basic and Expected Levels

Desired Customer Value

Unanticipated Customer Value

3 Levels of Customer Value

Basic and Expected Levels

include the basic requirements of conducting a business

Desired Customer Value

* involves what the customers want from the purchase or service experience
* first opportunity for a business to get ahead of the competition

Unanticipated Customer Value

pertains to an unexpected purchase or service experience that may go beyond what the customers desire

Strangers

Butterflies

True Friends

Freeloaders

4 Types of Customers

Strangers

* customers whose needs do not fit the company’s offerings
* the company does not need to invest and exert effort to win them

Butterflies

* not loyal to specific brand
* keep on looking for the best deals which may lead to patronizing other brands
* the company can enjoy profits from these customers only for a short period

True Friends

* have needs that match the company’s offerings
* make repeat purchases and patronize the brand as long as it satisfies their needs
* the company must invest in these customers and strengthen its relationship with them

Freeloaders

are loyal but not profitable because of the limited fit between their needs and the company’s offering

Communicate with customers frequently and effectively

Offer customer rewards

Conduct special events and provide sponsorship

Enhance customer service

Utilize languages to reach a wider customer base

5 Relationship Development Strategies

Communicate with customers frequently and effectively

* it is important to always get in touch with customers through e-mail and social networking sites especially in the new normal situation
* provide various means to give immediate feedback

Offer customer rewards

* customer loyalty programs, which include special discounts, freebies, perks, may work well for various types of products and services.
* encourage customers to remain loyal to the brand because they are rewarded for their patronage

Conduct special events and provide sponsorship

companies can hold or sponsor parties, concerts, contests, and the like to boost interaction among loyal customers and company representatives

Enhance customer service

some company outsource their services to third party organizations to cater complaints and inquiries, promote their latest offerings and provide technical support

Utilize languages to reach a wider customer base

marketers can create promotional materials in different languages to cater specific regions

Email and SMS

Social Networking Sites

Live Chat Support

3 Customer Services in Philippine Business Enterprises

Email and SMS

help businesses communicate with their clientele more easily

Social Networking Sites

have become a channel for netizens to ask for customer support

Live Chat Support

facilitates real time correspondence between customer and the company representative

Strategic Marketing

* general plan of action with the company vision and goals
* purpose of achieving a desired result such as profitability and high productivity
* puts heavier emphasis on external environmental scanning to develop strategies to respond to environmental forces that that confront the company
* the thinking process that outlines the course of action towards the achievement of a goal
* longer time frame, usually three to five years
* marketers should determine the objectives the company wants to achieve and how the outcomes will be measured.

Lambin (1993)

"the role of strategic marketing is to lead the firm towards attractive economic opportunities, that is, opportunities that are adapted to its resources and knowhow and offer a potential for growth and profitability.”

Mission Identification

Situation Analysis

Objective Setting

Marketing strategy development

Strategy evaluation and control

5 Steps in Strategic Marketing Process

Mission Identification

* mission statement
* defines what an organization is, why it exists, its reason for being, its primary customers, the products and services its produces, and its geographical area of operation

Situation Analysis

* assesses and evaluate the market, customers, competitors, and the company’s internal and external environment
* to identify the company’s strengths and weaknesses, as well as the available opportunities and threats

Objective Setting

* Specific, Measurable, Attainable, Reliable and Time-bound (SMART).
* enable a company to control its marketing plan and provide a consistent focus for all functions of an organization
* include sales revenues, market share and profits
* used as basis for strategy selection and development

Marketing strategy development

* involves market segmentation, identification of target market, positioning, selection of board marketing strategies, and the translation into action plan
* can be broadly classified into three categories:
* cost leadership
* differentiation
* focused

Strategy evaluation and control

* periodic monitoring and evaluation are needed
* necessary to identify deviations and make adjustments and corrections

Cost Leadership

* strategy primarily for achieving low-cost leadership among industry competitions
* can be achieved through low-cost supply contracts, overhead expense control, economies of scale, and comprehensive cost-cutting efforts, among others.

Differentiation

seeks to achieve superior product attributes and features that are different from industry competitors