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
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 Influence 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
Feelings of trust in provider,
reduced anxiety, great comfort
in knowing what to expect.
o Social Benefits
A sense of familiarity, social
relationship with providers.
o Special Treatment Benefits
Getting benefit of the doubt, a
special deal or price,
preferential treatment.
For Organization
o Increasing Sells
o Free Advertising
through word-of-
mouth
o Lower Costs
o Employee Retention
Customer Satisfaction
Customer Retention Quality Services
And Increased Profits
Employee Loyalty
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 equity
The total combined customer lifetime
Key Concepts values of all customers.
Measures a firms performance, but
o Attracting, retaining and in a manner that looks to the future.
growing customers
o Customer relationship levels and tools
Target market typically dictates type
o Building customer of relationship
relationships and Basic relationships
customer equity Full relationships

Customer loyalty and retention

programs
Adding financial benefits
Adding social benefits
 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
o Apologize if its our own fault
o If the problem can be fixed, fix it
o 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