Introduction to

Marketing &
Some Key Concepts
Session 1
 What is Marketing?
o Marketing is managing profitable customer relationships by
Attracting new customers
Retaining and growing current customers
Reclaiming lost customers
o Marketing is NOT synonymous with sales or advertising
o Kotlers definition:
A process by which companies create value for customers and build strong
relationships to capture value from customers in return.

o A simple Model of Marketing Process:

Create value for customers and

build customer relationships
Capture value
Understand Design a Construct a Build profitable from customers
marketplace, customer -driven marketing program relationships and in return
and customer marketing that delivers create customer
needs & wants strategy superior value delight Capture value
from customers
to create profits
and customer
loyalty
Selling vs. Marketing
A. MARKETING CONCEPT
Starting Point Focus Means Ends

Target Customer Integrated Profit by

Market Needs Marketing Customer
Satisfaction

B. SELLING CONCEPT
Starting Point Focus Means Ends

Factory Products Selling & Profit by

Promoting Sales
Revenue
Understanding marketplace, and customer
needs & wants: Core Marketing Concepts
o Needs (feeling), wants o Customer Value and
(form), and demands satisfaction (as per
(backed by buying power)
expectation)

o Marketing offers goods,

services and experiences o Exchange and
to satisfy relationships

Many Things Can Be Marketed!

o Goods o Markets (a set of
o Places
o Services o Properties actual buyer-seller)
o Experiences o Organizations
o Events o Information
o Persons o Ideas
Markets to Concentrate
o Customer Markets
o Referral Markets
o Supplier Markets
o Internal Markets
 Designing a customer-driven marketing
strategy: Marketing Management

The art and science of choosing target markets and

building profitable relationships with them.
Plan

o Selecting customers to serve

Evaluate Implement
o Choosing a value proposition to deliver
o Management Orientations (Concepts) The Process

1. The Production Concept: widely available products with low costs.

2. The Product Concept: Quality, performance and innovative products.
3. The Selling Concept: Aggressive selling & promotion effort
4. The Marketing Concept: Determining needs & wants of target market,
delivering desired satisfaction more effectively & efficiently than competitors
5. The Societal Concept: Enhancing consumers & societys well-being
Preparing A Marketing Plan & Program
MARKETING PLAN

Situation Analysis

Objectives

Target Market Selection

Feedback &
Marketing Strategy Modification

Product Pricing Promotion Distribution

Strategy Strategy Strategy Strategy

IMPLEMENTATION

EVALUATION
 Building Customer Relationship
The development and maintenance of long-term, cost-
effective relationships with individual customers,
suppliers, employees, and other partners, perhaps even
with competitors, for mutual benefit.

Goals of Relationship Marketing

Enhancing
To build & maintain a
base of committed Retaining

customers who are Satisfying

profitable for the Getting
Organization
Benefits of Relationship Marketing
For Customers
o Confidence Benefits For Organization
Feelings of trust in provider,
reduced anxiety, great comfort o Increasing Sells
in knowing what to expect. o Free Advertising
through word-of-
o Social Benefits mouth
A sense of familiarity, social o Lower Costs
relationship with providers.
o Employee Retention

o Special Treatment Benefits

Getting benefit of the doubt, a
special deal or price,
preferential treatment.
Transaction & Relationship Marketing
Characteristic Transaction Marketing Relationship Marketing
Focus Single-sell Customer Retention

Orientation Product feature Product benefit

Time Short-term Long-term

Customer service Relatively low Key component

priority

Customer contact Low to moderate Frequent

Quality concern Moderate High

Degree of customer Low High

commitment
Customer Relationship Management
o CRM is the overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction.

o Marketers must be concerned with the lifetime value of

the customer.

o It costs 5 to 10 times MORE to attract a new customer

than it does to keep a current customer satisfied.
 CRM

Key Concepts o Customer value/satisfaction

o Attracting, retaining and
growing customers
o Loyalty and retention
o Building customer
relationships and
customer equity
Meeting (exceeding) expectations
creates satisfaction (Customer
Delightness!)
Perceptions are key
Benefits of loyalty
Loyalty increases with satisfaction levels
Delighting consumers should be the goal

o Growing share of customer

Cross-selling
 CRM
o Customer relationship levels and tools
Target market typically dictates type
Key Concepts of relationship
Basic relationships
o Attracting, retaining and Full relationships
growing customers Customer loyalty and retention
programs
Adding financial benefits
o Building customer
Adding social benefits
relationships and
customer equity o Customer equity
The total combined customer lifetime
values of all customers.
Measures a firms performance, but
in a manner that looks to the future.
 Lifetime Value of a Customer
Creates Life-time Revenue and thus the
Profitability of the Customer to the
Organization.
o Length of average lifetime
o Average revenues generated per relevant time
period over the lifetime
o Sales of additional products/services over time
o Referrals generated by the customer over time
Lifetime Value of a Customer: an example
o If a 10-persons organization had Tk. 1,000 per month business
for the organization, assuming 10 year lifetime for a customer,
the value of the customer to the organization will become:
Tk. 1,000/month X 12/year X 10 years = Tk. 120,000

o If the happy customer creates at least one new customer via

word-of-mouth,
Tk. 120,000 X 2 new customers = Tk. 240,000

o If an average sales person serves 50 customers each day,

Tk. 240,000 X 50 Customers = Tk. 12,000,000

o Thus an average employee of the organization is managing a

Tk. 12,000,000 portfolio of lifetime business for it.
 Your Customers
1. Existing Customers 2.Potential Customers
3. Lost Customers
Lost Customer Programs
o Know who the lost customers are
o Find out why they left
o Establish if the problem can be fixed
Apologize if its our own fault
If the problem can be fixed, fix it
If can not, monitor the situation to see if:
Our own abilities change
Customers preferences or personnel change
 Retention Strategies

Foundation to Retain:
o Quality Offered in the Core Service
o Careful Market Segmentation & Targeting
o Continuous Monitoring of Relationships
 Customer is NOT Always Right
All customer relationship may not be beneficial,
and that every customer is not right all the time:

o Customer from the Wrong Segment

o If the customer is NOT Profitable in long-run

o If the customer is difficult to work with, placing

stress on organization and its employees by:
Refusing to follow policies of organization
Verbal/physical abuse of employees