Introduction to

Marketing
What Is Marketing?
Marketing is all around you, in good old traditional forms
and in a host of new forms, from websites and mobile apps
to online videos and social media.
M a r k e t i n g...?

 Selling?

 Advertising?

 Making products available online?

All of the above, plus much more!

 Marketing…is about…

“Identifying and meeting human and social needs”

“Meeting needs profitably”

“Generating customer value at a profit”

“Managing profitable customer relationships

by delivering superior value to customers”
What is Marketing?
◼ No single correct definition or approach

◼ Common subject matters:

 The ability to satisfy customers,
 The identification of favorable marketing opportunities,
 The need to create an edge over competitors,
 The capacity to make profits to enable a viable future for
the organization,
 The use of resources to maximize a business’ market
position,
 The aim to increase market share mainly in target
markets
 …
 Marketing: Creating Customer Value
and Engagement
Amazon.com’s deep-down
passion for creating
customer engagement,
value, and relationships
has made it the world’s
leading online retailer.

Amazon has become the

model for companies that
are obsessively and
successfully focused on
delivering customer value.

Copyright © 2016 Pearson Education, Inc.

What is Marketing?
The Marketing Process

Copyright © 2016 Pearson Education, Inc.

Marketing is ___________.
1. the same as advertising and sales
2. not used by small corporations
3. about satisfying customer needs
4. making a profit
Marketing is ________.
1. the same as advertising and sales
2. not used by small corporations
3. about satisfying customer needs
4. making a profit
Understanding the Marketplace and
Customer Needs :
Core Concepts of Marketing

Needs, wants,
and demands

Markets Products
and services

Exchange, Value and

and relationships satisfaction
Core Concepts of Marketing
◼ Needs, wants, and ◼ Need
demands  State of felt deprivation
 Basic human requirements
◼ Marketing offers: ◼ e.g. needs food
including products, ◼ Wants
services and  Needs directed to specific
experiences objects
 The form of needs as
◼ Value and satisfaction shaped by culture and the
individual
◼ Exchange and ◼ e.g. wants a BigMac
relationships ◼ Demands
◼ Markets  Wants which are backed by
buying power
What is marketed here?
Who markets?
▪ Marketing campaigns

▪ Market offerings are not limited to physical products

Core Concepts of Marketing
◼ Needs, wants, and ◼ Marketing offering
demands
◼ Marketing offers:
including products,
services and
experiences
◼ Value and satisfaction
◼ Exchange and
relationships
◼ Markets
 Combination of
products, services,
information or
experiences offered
to a market that
satisfy a need or
want
 Offer may include
services, activities,
people, places,
information or ideas
Core Concepts of Marketing
Products
Anything that can be Offered to a Market to Satisfy a Need or Want

Experiences Persons Places

Organizations Information Ideas

Services
Activities or Benefits Offered for Sale That Are Essentially
Intangible and Don’t Result in the Ownership of Anything
Various “marketing offers” to
satisfy a given need

How do consumers choose

among products & services?
Core Concepts of Marketing

◼ Needs, wants, and

◼ Customers form
demands expectations regarding
◼ Marketing offers: value
including products, ◼ Marketers must deliver
services and value to consumers
experiences ◼ Set the right level of
◼ Value and satisfaction expectations (not too low or
high)
◼ Exchange and
relationships
◼ Markets
Customer Value and Satisfaction
Customers
• Value and
satisfaction
Marketers
• Set the right
level of
expectations

??? What is the benefit of

having a satisfied customer?
Core Concepts of Marketing
◼ Exchange
◼ Needs, wants, and  The act of obtaining a
demands desired object from
◼ Marketing offers: someone by offering
including products, something in return
services and ◼ One exchange is not the
experiences goal, relationships with
◼ Value and satisfaction several exchanges are the
goal
◼ Exchange and ◼ Relationships are built
relationships through delivering value and
◼ Markets satisfaction
 Marketing network:
company and all its
supporting stakeholders
Core Concepts of Marketing
◼ Market
◼ Needs, wants, and
demands
◼ Marketing offers:
including products,
services and
experiences
◼ Value and satisfaction
◼ Exchange and
relationships
◼ Markets
 Set of actual and
potential buyers of a
product
 These buyers share a
particular need or
want that can be
satisfied through
exchange relshps
 Marketing means
managing markets to
bring about profitable
customer relshps
Simple Marketing System
Communication

Products/services
Industry Market
(a collection (a collection
of sellers) Money of buyers)

Information
Copyright © 2016 Pearson Education, Inc.
Designing a Customer-Driven
Marketing Strategy
◼ Marketing management : the art and science
of choosing target markets & building
profitable relationships with them.

 This definition must include answers to 2

questions:
◼ What customers will we serve?

◼ How can we best serve these customers?

 Getting, keeping, and growing customers
through creating, delivering, and
communicating superior customer value
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
 Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

A brand’s value proposition →

is the set of benefits or values it
promises to deliver to customers
to satisfy their needs.

the answer to the customer’s

question: “Why should I buy your
brand rather than a competitor’s?”
Vine gives you “the best way to see and share
life in motion” through “short, beautiful, looping
videos in a simple and fun way for your friends
and family to see.”
Copyright © 2016 Pearson Education, Inc.
Value Propositions…

• BMW promises “the ultimate driving machine”

• New Balance’s Minimus shoes are “like
barefoot only better.”
• Facebook helps you “connect and share with
the people in your life”
• YouTube “provides a place for people to
connect, inform, and inspire others across the
globe.”
Only the best is good enough for Lexus customers
Designing a Customer-Driven
Marketing Strategy
◼ Marketing management involves → managing
demand → managing customer relationships
 Marketers aim to influence the level, timing and
composition of demand to meet organizational
goals.
◼ Marketing management is concerned
 not only with finding and increasing demand,
 but also with changing or even reducing it

 Demarketing : marketing to reduce demand

temporarily or permanently (the aim is not to destroy
demand but to reduce or shift it)
 How a company approaches to marketplace?

 Whatphilosophy (should) guide a company’s

marketing efforts?

Marketing philosophy…
◼ How marketing has become
“marketing” as we understand it
and apply its practices today?
 Evolution of Marketing Thought
◼ Production Era (1850s-1920s)
 Industrial revolution; mass production
 Few products and little competition
◼ Sales Era (1920s-1950s)
 The focus was on personal selling and advertising
 Sales seen as the major means for increasing profits
◼ Mktg Era (1950s-present)
 Customer orientation replaced the “hard sell” of the sales-led era
 Determination of the needs and wants of customers before
introducing products or services
◼ Relationship Marketing Era: 1990s-
 Marketing era has recently shifted from being “transaction-based” 
to focusing on “relationships”
 Both attracting and retaining customers
Evolution of Marketing Thought:
New Era(s) in Marketing
Service Dominant Logic (2000s and beyond)
views all interactions within an economy are
service-to-service interactions

Marketing is a process by which companies and

customers co-create value together through
experience and build strong customer
relationships in order to capture value from
customers in return.
Marketing Management Orientations

Societal
Production Product Selling Marketing
marketing
concept concept concept concept
concept
Production Concept
◼ Consumers will favor those products that are
widely available and higly affordable.
◼ Managers concentrate on achieving high
production efficiency and wide distribution.

◼ The assumption is valid at least in 2 situations :

 The demand for a product exceeds supply (suppliers will
concentrate on finding ways to increase production)
 The product’s cost is high and has to be decreased to
expand the market.
Product Concept

◼ Consumers will favor those products that offer

the most quality, performance and features.
◼ Managers in product-oriented organizations
concentrate on making superior products and
improving them over time.
◼ The assumption  the customers will admire
well-made products and can evaluate product
quality and performance
◼ This concept may lead to marketing myopia
Selling Concept
◼ Consumers will not buy enough of the firm’s
products unless it undertakes a large scale
selling and promotion effort
 Consumers must be convinced of buying company
products
 Company is powerful in generating effective selling and
promotion to stimulate more buying
◼ Agressive selling & promotion

◼ Mostly used by firms which have overcapacity.

◼ The aim is “to sell what they make” rather than
“make what the market wants.”
◼ Short-term profits are more important
(customer dissatisfaction may occur)
Marketing Concept
◼ Achieving organizational goals depends on
knowing the needs and wants of the target
markets and delivering the desired satisfactions
better than competitors do

◼ 4 pillars of modern marketing :

1. Target market
2. Customer needs
3. Integrated marketing
4. Profitability through customer satisfaction
Marketing and Sales Concepts Contrasted
Starting
point Focus Means Ends

Existing Selling and Profits through

Factory products promotion sales volume

(a) The selling concept

Customer Integrated Profits through

Market needs marketing customer
satisfaction

(b) The marketing concept

 Customer Integrated Profits through
Market needs marketing customer
satisfaction

1. Target market : homogenous group of customers

to whom the company wishes to appeal

2. Customer needs
 Consumers may not be fully conscious of their needs
 It may not be easy to articulate these needs
 They may use words that require some interpretation
 Customer-oriented thinking → to define customer
needs from the customer’s point of view
 Sales revenue New customers + Repeat customers
 “Customer Retention” vs. “Customer Attraction”
 Customer value and customer satisfaction are building
blocks of customer relationship management
 Customer Integrated Profits through
Market needs marketing customer
satisfaction

3. Integrated Marketing
1) Various marketing functions must work together for
customer satisfaction (coordination of 4Ps; marketing
mix elements)
◼ Marketing Mix : controllable variables the company puts
together to satisfy its target market(s).
Product: Product variety, quality, design, features, brand name,
packaging, sizes, services, warranties, returns
Price: List price, discounts, allowances, payment period, credit
terms
Promotion: Sales promotion, advertising, sales force, public
relations, direct marketing
Place: Channels, coverage, assortments, locations, inventory,
transport
Marketing Concept - The 4 P’s
 The 4 P’s → The 4 Cs

Marketing
Mix

Product Place

Convenience
Customer
Solution Price
Promotion

Customer
Cost Communication
 Customer Integrated Profits through
Market needs marketing customer
satisfaction

Integrated Marketing (cont.)

2) Marketing must be well coordinated with other
departments in the company;
all departments have to work together to satisfy
customers’ needs and wants

4. Profitability through customer satisfaction

 To achieve profits as a result of creating superior
customer value
Selling – Marketing...

“There will always be need for

some selling. But the aim of marketing
is to make selling unnecessary. The aim
of marketing is to know and understand
the customer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer
who is ready to buy.”
Peter Drucker
Societal Marketing Concept
◼ Company’s negative effects on
society
◼ Conflict between consumer
wants and long-term social
welfare
◼ 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
Societal Marketing Concept

Copyright © 2016 Pearson Education, Inc.

Modern Marketing Concept
Traditional Organization Chart

Top
Management

Middle Management

Front-line people

Customers
Modern Marketing Concept
Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Top
manage-
ment
Building Customer Relationships
Customer Relationship Management (CRM)
◼ The overall process of building and maintaining profitable
customer relationships by delivering superior customer
value and satisfaction
Relationship Building Blocks • The aim → to
increase “consumer
Customer Customer
perceived value satisfaction
lifetime value”!
• to gain a greater
• The difference • The extent to proportion of an
between total which a product’s
customer value perceived
existing
and total customer performance customer’s
cost matches a buyer’s purchases over
expectations a long period
 Building Customer Relationships
Customer Relationship Management

Customer Relationship Levels and Tools

Frequency
Basic Relationships Full Partnerships
Marketing
– low-margin – high-margin
Programs –
customers customers
reward customers

Copyright © 2016 Pearson Education, Inc.

 Building Customer Relationships
The Changing Nature of Customer Relationships

◼ Relating for the long term uses customer

relationship management to retain current
customers and build profitable, long-term
relationships
 Focus has shifted to:
◼ keeping current customers, and
◼ building lasting relationships based on superior
satisfaction and value
 It costs 5 to 10 times as much to attract a new customer
as it does to keep a current customer satisfied.
Building Customer Relationships
Engaging Customers
Customer-Engagement and Today’s Digital and Social Media

Customer-Engagement Marketing makes the

brand a meaningful part of consumers’
conversations and lives,
by fostering direct and
continuous customer
involvement,
in shaping brand conversa-
tions, experiences, and
community.
Copyright © 2016 Pearson Education, Inc.
Building Customer Relationships
Engaging Customers
Customer Engagement and Today’s Digital and Social Media

Customer engagement
and the social media:
Hertz’s “Share It Up”
social media campaign

Hertz System, Inc .

Copyright © 2016 Pearson Education,
 Building Customer Relationships
Engaging Customers

Consumer-Generated Marketing

Brand exchanges created by consumers

themselves—both invited and uninvited—by
which consumers are playing an increasing role
in shaping their own brand experiences and
those of other consumers.

Copyright © 2016 Pearson Education, Inc.

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
 Building Customer Relationships
Partner Relationship Management

◼ Partners inside the company → every

function area interacting with customers
 Electronically
 Cross-functional teams
◼ Partners outside the company → how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
 Capturing Value from Customers
Creating Customer Loyalty and Retention

◼ Customer lifetime value (CLV) is the value

of the entire stream of purchases that the
customer would
make over a
lifetime of
patronage
◼ CLV shows true
worth of a customer
 Capturing Value from Customers
Growing Share of Customer

Share of customer is the portion of the

customer’s purchase that a company gets
in its product categories
 Achieved through offering greater variety,
cross-sell and up-sell strategies.
Capturing Value from Customers
Customer equity is
the total combined
customer lifetime
values (CLVs) of all
of the company’s
customers
◼ A measure of the
firm’s performance
Müşteri özsermayesi, şirketin tüm müşterilerinin toplam birleşik müşteri yaşam boyu değerleridir (CLV'ler)
 Capturing Value from Customers
Building Customer Equity

◼ Building the right relationships with the

right customers involves → treating
customers as assets that need to be Doğru müşterilerle doğru

managed and maximized ilişkiler kurmak, → müşterilere

yönetilmesi ve en üst düzeye
çıkarılması gereken varlıklar
olarak davranmayı içerir

◼ Different types of customers require

different relationship management
strategies
Build the right relationship with the
right customers
 Capturing Value from Customers
Building Customer Equity

FIGURE 1.5
Customer
Relationship
Groups

Copyright © 2016 Pearson Education, Inc.

The Changing Marketing Landscape

◼ Digital Age
◼ Changing Economic Environment
◼ Growth of Not-for-Profit Marketing
◼ Rapid Globalization
◼ Sustainable Marketing
The Changing Marketing Landscape
We live in the age of Internet of Things, where everything
is connected to everything else.

Digital and social media marketing

involves using digital marketing tools such
as websites, social media, mobile ads and
apps, online videos, email, and blogs that
engage consumers anywhere, at any time,
via their digital devices.
The Changing Marketing Landscape
◼ Social media provide exciting opportunities to extend
customer engagement and get people talking about a
brand.
◼ Mobile marketing: Using mobile channels to stimulate
immediate buying, make shopping easier, and enrich the
brand experience.
◼ Big Data and AI: Brands can use big data to gain deep
customer insights, personalize marketing offers, and
improve customer engagements and service.
The Changing Marketing Landscape
Not-for-profit marketing is growing, as sound marketing
can help organizations attract membership, funds, and
support.
The Changing Marketing Landscape
◼ Rapid Globalization: Managers around the world are
taking both local and global views of the company’s:
 Industry
 Competitors
 Opportunities

▪ Sustainable Marketing: Corporate

ethics and social responsibility have
become important for every
business.