SUNDAY (22/7/2018)

Market – A place where buyer meets seller to satisfy the needs and wants.
Buyer ; expects high quality products / pay less price
Seller ; high volume sales / high profit margin
Marketing – A place to study consumer needs and wants then create (R &D)
8 Ps
1. Products ; goods and services to satisfy consumer needs and wants
2. Place ; value – products and services (status and personality)
3. Packaging ; added value to products and services (attraction to consumer)
4. Price ; quality – personality and image / status
5. Promotion ; cultural value
6. People ; identify target market
7. Physical distribution channel – how to reach to them
8. Performance – product concept (what does it give back)

CORE CONCEPTS
Needs - emerge from a state felt deprivation
- distinguish among physical, social and individual
needs

Maslow’s Hierarchy of Needs

- deficiency needs
- growth needs

According to Maslow, an individual is ready to act upon the

growth needs if and only if the deficiency needs are met.
Wants - shaped by culture and individual experience
- different wants are based upon geographical
differences, gender, age, wealth etc
Demands - are wants backed by buying power
 - demands are often for a bundle or group of benefits
and may address a number of related needs and
wants
Exchanges - are the act of obtaining desired objects by offering
something in return (barter)
Transactions - are an actual trade of value between at least two
parties
- transaction marketing is part of the larger concept of
relationship marketing in which parties build long
term, economic ties to enhance quality and customer
– delivered value
Markets - are the set of actual and potential buyers of a product
- markets may be decentralized of centralized
- markets exist wherever something of value is desired
Marketers - are people seeking a resource from someone else
and willing to offer something of value in exchange

FIVE MARKETING PHILOSOPHIES

The Production Concept
- one of the oldest concept ; it holds that consumers favour products that are widely
available and low in cost
- management emphasizes production and distribution efficiency

(e.g Hong Kong – based Naxos)

The Product Concept
- it holds that consumers will favour those products that offer the most quality,
performance or innovation features
- may lead to marketing myopia or the tendency to too narrowly define the scope of
one’s business
The Selling Concept
- it holds that consumers, if left alone, will not buy enough of the organization’s
products – most often used today for unsought goods
- most firms practice the selling concept in response to over capacity ; they sell what
they make rather than what the market wants
The Marketing Concept
- this concept holds that the key to achieve the organizational goals consists in
determining the needs and wants of the target markets and delivering the desired
satisfactions more effectively and efficiently than competitors
- it links the company’s success with the consumer’s continuing satisfaction
- its outside – in approach starts with a well defined target markets, an analysis of their
needs and wants and then builds the company’s offering around meeting those
needs better than the competitors
The Societal Marketing Concept
- this concept adds to the marketing concept the idea that the company should
contribute to the betterment of society as a whole
 MARKETING AND SALES CONCEPT CONTRASTED
Comparison and Contrast
- Levitt notes that the selling focuses on the needs of the seller, marketing on the needs
of the buyer
- The marketing concept rests on the four principles
Target Markets
- Companies cannot serve everyone ; must identify and select smaller group of clearly
defined customers and develop a tailored marketing program
Customer Needs
- Marketers must probe customer needs which are often vaguely defined even to
customer, five distinct need types include
1. State Needs – the most explicit
2. Real Needs – underlying requirements
3. Unstated Needs – usually assumed to be part of the product offer by the
customer
4. Delight Needs – a surprise bonus of the purchase not expected
5. Secret Needs – often an unconscious motivator grounded in psychological
states
Coordinated Marketing
- Coordination requires (1) that the various marketing functions work as an integrated
whole and (2) that the marketing function must be well coordinated with the other
departments
Profitability
- The key to long – term company success is not to aim for profits as such but to achieve
them as by product of doing the job well
- All employees must see the connection between their performance and the customer
need satisfaction – profitability relationship
Companies can let their own success lock them into a rigid selling structure. As times change,
those companies fail to see the need for meeting new and emerging consumer needs. The
marketing concept helps the companies to focus on the customer need satisfaction, leading to
long – term success by customer retention
The Social Marketing Concept holds that the organization should determine the needs, wants
and interest of the target markets. In delivering the desired satisfactions more effectively than
the competition, the company should also maintain or improve both consumer’s and society’s
well being
Reasons for adopting the societal marketing concept ;
PROS
- Public expectations ; societal expectations of business have increased
- Long – run profits ; socially responsible marketing may lead to more secure long – run
profits
- Ethical obligation ; business should recognize that responsible actions are right for their
own sake
- Public image ; a good public image will help the firms to gain more customers, better
employees, access to money markets etc
- Better environment ; involvement by business can help solve the difficult social
problems, creating a better quality of life and more desirable community in which to
attract and hold the skilled employees
- Balance of responsibility and power ; marketers have a large amount of power in
society that requires an equally large amount of responsibility
- Stockholder interests ; socially responsible companies are considered less risky and
safer investments
- Possession of resources ; business has the financial resources, technical experts and
managerial talent to provide public causes

CONS
- Violation of profit maximization
- Dilution of purpose ; the pursuit of social goals dilutes business’s primary purpose
- Costs ; many socially responsible activities don’t pay their way
- Too much power ; business is already one of the most powerful institutions in society
- Lack of skills ; marketers may be poorly qualified to deal with social issues
- Lack of accountability ; there are no direct lines of social accountability from the
business sector to the public
- Lack of broad public support ; even favourable attitude are general and lack consensus
on specific action marketers should take on social issues
DEFINING CUSTOMER VALUE
Elements of Customer Value
Customer Delivered Value
- Delivered value is defined as the difference between total customer value and total
customer cost. Consumers also weigh psychological costs such as image, reputation
and decision – time
Customer Satisfaction
- Satisfaction is the level of a person’s felt state resulting from comparing a product’s
perceived performance (or outcome) in relation to the person’s expectations
- Expectations are based upon customer’s past buying experience, the opinions of
friends and associates and market and competitor information
 - Expectations may be realistic or unrealistic further, as the text observes, satisfaction
alone doesn’t retain customers

Total Customer Satisfaction aims at meeting, exceeding and then continually raising customer
expectations for product performance. To achieve this end, companies must track their
customer’s expectations, perceived company performance and customer satisfaction. The goal
; to create the customer delight – an emotional affinity for a product or service not just a
rational preferences. This kind of bond is required for obtaining high customer loyalty in an
increasingly competitive marketplace.
A key concept ; market engineering – the process of designing the whole company system to
deliver customer value at every level
VALUE CHAIN
The Generic Value Chain Primary Activities
Inbound Logistics
- Consist of those activities and their coordination that bring needed materials into the
business
- Value is added in the choice of materials and their integration into the business
operations in a timely manner
Operations
- The first step in developing materials into value – added products
- Operations add value through manufacturing innovations and process
Onbound Logistics
- Refer to the distribution system set up by the business
- As with inbound logistics, coordination and integration of the firm’s products and image
to create value
Marketing and Sales
- Marketing and sales educate consumer and position the firm’s products and image to
create value
Service
- Creates the value both by keeping the product’s performance in line with the customer
expectations and by demonstrating to the customer the firm’s commitment to meeting
customer needs
 SUPPORT ACTIVITES (these activities occur within each primary activity)
Firm Infrastructure – how the firm is set up permeates each primary activity and determines
the parameters of action each activity can take
Human Resource Management – recruitment, training and evaluation add value in relation to
the competition’s efforts
Technology Development – all primary activities must develop and maintain technological
advantages
Procument – every primary activity procures inputs of both material and expertise
RELATIONSHIP MARKETING
Retaining Customers
- Getting new customers cost money ; marketers need to think in terms of how much of
each aspect of promotion mix and marketing mix must be spent each time a new
customer is recruited
- Current customers will need fewer of these expensive resources to make their buying
decision than will potential customers
Cost of Lost Customers
- Once marketers realize that losing customers is expensive, they need to determine how
to identify why customers are lost to measure the actual cost of customer loss
- A large company should prepare frequency distribution indicating the percentage of
customers who defect for different reasons ; this analysis will utilize the marketing
information system to help determine the cost of customer loss / even small business
can use focus groups and surveys to identify loss centers on a personal computer
database
Customer’s Lifestyle Value
- When the revenues of each customers are factored in, it is possible to determine the
customer’s lifetime value – the amount of profit generated each year for the company
over the lifetime of that customer’s business with the company
LEVELS OF RELATIONSHIP MARKETING
Relationship marketing involves creating, maintaining and enhancing strong relationships with
the customers and other stakeholders. Levels of relationships with customers include ;
1. Basic – the company sales person sells the product but doesn’t follow up in any way
2. Reactive – the sales person sells the product and encourage the customer to call
whenever he or she has any questions or problems
3. Accountable – the sales person contacts the customer shortly after the sale to check
performance and seek the customer’s suggest for improvement
4. Proactive – the sales person contacts the customer from time to time with suggestions
about improved products use or helpful new products
 5. Partnership – the company work continuously with the customer and with another
customers to discover ways to deliver better value
TOTAL QUALITY MARKETING
Quality and Performance
Quality – the totality of features and characteristics of a product or service bear on its ability
to satisfy stated or implied needs
Performance Quality – refers to the level at which a product performs its function
Conformance Quality – refers to the freedom from defects and the consistency with which a
product delivers a specified level of performance
MARKETING STRATEGIES 2-2
PURSUING A TOTAL QUALITY MARKETING STRATEGY
1. Quality is in the eyes of the customer. A quality program must begin with the
customer’s needs and end with customer perceptions
2. Quality must reflect every company activity. Each functional area and each company
activity must understand and embody the total quality concept. A system cannot
consistently deliver quality concept if one or more of its components not operating
effectively
3. Quality requires total employee commitment – all company employees must be
personally committed to the total quality program / commitment requires both
professional and personal pride in the outcome
4. Quality requires high – quality partners. Value chain members of the customer delivery
system must also embody total quality commitment
5. Quality can always be improved