CREATING CUSTOMER VALUE AND SATISFACTION

what is marketing?
Marketing is a social managerial process by which individuals and groups obtain what they need and want through creating and exchanging products with others.

The marketing function

The marketing function not only deals with the production and distribution of products and services, but it also is concerned with the ethical and social responsibility functions found in the domestic and global environment.

What is marketing management?

Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

3 stages of marketing management practice

Entrepreneurial Marketing. Most companies are started by individuals who live by their wits. Formulated Marketing. As small companies achieve success, they inevitably move towards formulated marketing. Entrepreneurial Marketing. If companies lose their passion and marketing creativity, they must restablish their companies with entrepreneurship at the local level.

5 marketing management philosophies

The Production Concept; holds that consumers will favor products that are available and highly affordable. Here, the management focus on improving production and distribution. E.g. Henry Fords Model T, TI watches. The Product Concept; holds that consumers favor products that offer the most quality, performance and innovative features. Here, the organization should focus on making continuous product improvement. The Selling Concept; holds that consumers do not buy enough products if there are not large-scale selling and promotion effort. Most companies use the selling concept when they have overcapacity. This concept focuses on creating sales transactions rather than on building long-term, profitable relationships with customers. The Marketing Concept; holds that achieving organizational goals (making profit) depends on understanding the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. E.g. Disney, McDonalds, Bosch are customer-driven companies. The Societal Marketing Concept; holds that the organization should not only satisfy the needs and wants but also improve both customers and societys well-being. This philosophy focus on customer long-term welfare, since today we have environmental problems, resource shortages, population growth etc. E.g.Critics against fast-food restaurants that food has a lot of fat and salt harmful for health, a lot of packaging increasing waste and pollution. Here, the companies try to balance (1) company profits, (2) consumer wants, (3) societys interests.

New Product Development Process

What is a new product ?
A product that opens an entirely new market A product that adopts or replaces an existing product A product that significantly broadens the market for an existing product An old product introduced in a new market An old product packaged in a different way An old product marketed in a different way

FACTS:
(1)One study estimated that as many as 80% of new product failed. (2)Only about 40% of new products are around after five years.

What is New Development Process?

Product

New product development is the process of developing original products, product improvements, product modifications, and new brands through the firms own R&D effort.

Reasons Why So Many New Products FAIL!!!

(1)Market size may have been overestimated. (2)The actual product may have not been designed as well as it should have been. (3)The product may have been incorrectly positioned

in the market, priced too high or advertised poorly. (4)A new product may have been pushed though in spite of poor marketing research finding. (5)The cost of producing the product may have been higher than expected. (6)Sometimes competitors fight back harder than expected.

Success Factors
(1)Unique superior product (2)A well defined product concept (3)Others factors include a.Senior management commitment b.Relentless innovation c.A smoothly functioning new product development process. (4)In all to create successful new product a company must understand its consumer, market, competitors and develop products that deliver superior customer. (5)The solution lines in strong new product planning and it setting up a systematic new product development process for finding growing new product.

The New Product Development Processes

Idea Generation. The first step in the new product development process is Idea Generation which is the systematic search for new product ideas. Idea Screening. The second step in the new product development process is idea screening which involves screening new product ideas in order to spot good ideas and drop poor ones as soon possible. Concept Development and Testing.The third stage in the process is concept development and tasting. Concepts may take on several forms: (1)A product idea is an idea for a possible product that the company can see itself on the market. (2)A product concept is a

detailed version of the new product idea stated in meaningful consumer terms. (3)A product image is the way consumer perceives an actual and potential product. (a)Concept development involves developing product ideas into some alternative product concept finding out how attractive each concept is to consumer and choosing the best one. (b)Concept tasting involves testing the concepts with a group of target consumer to find new ways to make product concepts more real to concepts test subjects. Marketing Strategy Development. The fourth step is Marketing Strategy Development which involves designing an initial marketing strategy for a new product based on the product concept. A marketing strategy statement should be produced. Business Analysis. The next step is Business Analysis which is the review of the sales, cost and profits projection for a product to find out whether these factors satisfy the companys objective. Product Development. The sixth step is product development which involves developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product. This step calls for a large jump in investment. Test Marketing. The seventh step is test marketing which is the stage at which the product and marketing program are introduced into more realistic marketing settings. Test marketing lets the marketer get experience with marketing the product. The basic purpose is to test the product itself in real markets. The amount of test marketing varies with each new product. (1) Not all products are test marketed. (2) Simple line extensions and copies of competitor products are often not test market. Commercialization. The eighth and final step is the new product development process is Commercialization. This step is introducing a new product in to the market.

The company bringing out a new product must make the following decision: (1) When? When is the time right to introduce the new product? (2)Where? The company must decide whether to lunch the new product in a single location, a region, several regions, and the national market.

What is Product Life Cycle (PLC)?

Product Life Cycle (PLC) is the course of a products sales and profits over its lifetime.

5 stages of PLC
Product Development Stage begins when the company finds and develop a new product idea. Introduction Stage is a period of slow sales growth as the product is being introduced in the market. Growth Stage is a period of rapid market acceptance and increasing profits. Maturity Stage is a period of slow down in sales growth because the product has achieved acceptance by most potential buyers. Decline Stage is the period when sales fall off and profits drop. The PLC Concept can describe a product class, a product form, or a brand: Product Class have the longest life cycles. ex. Gas-powered cars Product Forms tends to have the standard PLC shape. ex. Minivans Brand can change quickly because of changing competitive attacks and responses. ex. Ford Taurus

Applications of the Product Life Cycle

The PLC can also be applied to styles, fashions, and fads.

1. A Style is a basis and distinctive mode of expression. 2. Fashion is a currently accepted or popular style in a given field. (e.g. Preppie look in clothing) 3. Fad is a fashion that enters quickly, is adopted with fast zeal, peaks early, and declines away fast.

Marketing promotion mix

Promotion is the process of communication between the company that sells the product and the potential customer, with the purpose of influencing the attitudes and behavior. There are specific promotional tool that are supporting chosen promotional goal. The promotional mix represents a combination of different promotional tools. The basic elements of promotional mix are Advertising, Public Relations, and Sales Promotion. Advertising is communication with current and potential customers and consumers, done through paid mass media. The channels of communication can be TV, radio, Internet,billboards,etc.

Public Relationship ( PR ) is communication toward public, but is turned more to reputation and image of the company, than to its products. The PR activity can be a press conference, TV interview with company representative, press article about donation of the company to charity or about latest environmental project.

Sales Promotion represents a set of different promotional activities that has the goal of animating customers for purchasing. This can be value offer ( discount ), quantity offer ( 2+1 ), prize drawings, merchandising, direct contact by animators in retail outlet, etc.