What is Marketing?

Chapter 1
 What is marketing?
Social definition
• marketing is a societal process
by which individuals and groups
obtain what they need and want
through creating, offering, and
exchanging products and
services of value freely with
others
Managerial definition
• Marketing (management) is the
process of planning and
executing the conception,
pricing, promotion, and
distribution of ideas, goods, and
services to create exchanges that
satisfy individual and
organizational goals . (AMA
definition)
 Marketing encompasses

Target segment Customer needs,

wants, demands

positioning
Marketing tools:
Ps Customer
relationship
Market management
Marketing as a System
 Understanding the market place and
customer needs and wants

1st : customer needs and wants:

Needs are states of felt deprivation. They include physical needs
for food, warmth, and safety, social need s for belongings.
Wants are the form human needs take as they are shaped by
culture and individual personality. For example, eating fata and
meat in ElAdha Feast is a want.
A Muslim needs food to break the fast during Ramadan but
wants dates according to Sona.
When backed by buying power wants become demands
marketers do not create needs: Needs preexist marketers

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 Understanding Customer Needs, Wants, and Demands

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

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

Demands • Wants backed by buying power

Ch 1 -6 Copyright © 2011 Pearson Education

 2ND : Market offerings:
Product , services and experiences
Customer needs and wants are fulfilled through market
offerings. They include products, services, ideas,
information, organizations.
It is important for markets to pay attention to pay
attention to t he benefits behind offerings and the way
they will fulfill needs and wants

3rd : customer value and satisfaction

Two building blocks for developing and managing
customer relationships

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4th : Market
The market is a set of actual and potential buyers of a product. These buyers share a particular need or
want that can be satisfied through exchange relationships.
Marketing means managing markets to bring about profitable customer relationships. This needs work
which represented in searching for buyers, identify their needs design good market offerings, set prices
for them, promote them and store and deliver them. Activities such as consumer research, product
development , communication, distribution, pricing and service are core marketing activities.

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 Target Segment
• Not all consumers are my customers
• Whom will I direct my products to?
• Who is willing to buy my product?
• What are the characteristics and the profile of those who buy my
product?
 Key Customer Markets

consumer
global

business
Nonprofit and
governmental
 Marketers and Prospects

• Eight demand states are possible:

• 1. Negative demand—Consumers dislike the product and may even pay to avoid it.

• 2. Nonexistent demand—Consumers may be unaware of or uninterested in the product.

• 3. Latent demand—Consumers may share a strong need that cannot be satisfied by an existing product.

• 4. Declining demand—Consumers begin to buy the product less frequently or not at all.

• 5. Irregular demand—Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

• 6. Full demand—Consumers are adequately buying all products put into the marketplace.

• 7. Overfull demand—More consumers would like to buy the product than can be satisfied.

• 8. Unwholesome demand—Consumers may be attracted to products that have undesirable social consequences.
 Product Offering

• Goods Physical goods

• Services are promises
• Events
• Persons
• Places
• Experiences
• Cities
• Organizations
• ideas
Branding
 Capturing customer value
The outcomes of creating customer value is :
Customer loyalty and retention: Losing a customer means losing more than a single
sale. It means losing the entire stream of purchases that the customer would make
over a lifetime of patronage, which is known as customer lifetime value.
Share of market and share of customer: the share producers get of the customers’
purchasing in their product categories.
Customer lifetime value is the value of the entire stream of purchases that the customer would
make over a lifetime of patronage.
Customer equity: The total combined customer lifetime values of all of the company’s
customers.
the more loyal the firm’s profitable customers, the higher its customer equity.
Customer equity may be a better measure of a firm’s performance than current sales or
market share.

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Building the right relationships with the right
customers
Companies should view customers as assets that need to be managed and
maximized. But not all customers, not even all loyal customers are good
investment. Then which customers should the company acquire and retain?
The company can classify customers according to their potential profitability and
manage its relationships with them accordingly.

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 Customer relationship groups
Projected loyalty

Short-term customers Long-term customers

Potential profitability

Butterflies True Friends

Profitability
High

Strangers Barnacles
profitability
Low

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Butterflies: are potentially profitable but not loyal. There is a good fit between their
needs and the company offerings. However, like real butterflies, they might fly to
other suppliers. Efforts to convert butterflies into loyal customers are rarely
successful.
Strangers: show low potential profitability and little projected loyalty . There is little
fit between the company offerings and their needs. The relationship management
strategy for these customers is simply : Don’t invest anything in them.
True Friends: are both profitable and loyal. There is a strong fit between customer
needs and company offerings. The firm tries to strengthen the relationship with
these customers, retain and grow them. It wants to turn true friends to true
believers.
Barnacles: are highly loyal but not profitable. There is limited fir between the
company offerings and their needs. However, they might turn to be profitable if the
company consider their needs through careful design to their offerings. But, if they
failed to turn them profitable, better to get rid of them.

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The evolution of marketing philosophies
 Principles of marketing Dr. Rasha
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Marketing and exchanging value

• Marketing occurs when people decide to satisfy needs and wants

through exchange relationships. Exchange is the act of obtaining a
desired object from someone by offering something in return.
• Marketing is about actions taken to build and maintain desirable
exchange relationships with target audience involving a product,
service idea or other object.
 The New Marketing Realities

• Technology and internet: effect on opportunities, consumer behaviour

• The competition has increased beyond home market boundaries:

Companies should also track competitors from outside their home markets
• Brand manufacturers are faced by powerful retailers that market their own
store brands
• From marketing to individuals to marketing that cares about social concern
• New Company Capabilities
• Changing Channels
The End