Marketing Process

Marketing Process

Figure 1.1 presents a simple five-step model of the marketing process.

Figure 1.1: Marketing process.

01. Understanding the Marketplace and Customer Needs.

As a first-step, marketers need to understand customer needs, wants and marketplace within which they operate.

(a) Customer Needs, Wants and Demands

Needs: Human needs are states of felt deprivation. These needs were not created by marketers; they are a basic part of the human makeup.

Needs aren’t only physical. Needs can be a social thing, for example, social class, belonging to a certain society and need of self-expression.

Wants: Want is a basic problem which is shaped by culture and personality.

For example, if we always manage to satisfy our wants, it transforms into a need.

Demands: Demand are human wants that are backed by buying power.

If we, financially, are strong enough and can allow ourselves to buy a $780 iPhone, it means that we’ve transformed our want/need into a demand.

(b) Market offerings-Product, Service and Experiences

Market offerings are some combination of products, services and experiences offered to a market to satisfy consumer needs or wants.

Product: A product is anything that can be offered to a market for use or consumption that might satisfy a need or want.

Example: Camera, earphone, smartphone, game pad etc.

Service: Service is any activity or benefit that one party offer to another which is essentially intangible and does not result in the ownership of anything.

Experiences: Experience means achieved real knowledge about anything.

(c) Customer Value and Satisfaction

Customer Value: Customer Value is the differences between the values customer gains from using a product and cost of the product.

For example, a lady feels attractiveness after coloring her hair in Persona. For these she has to pay some money also. In this case, the differences between benefit from Persona and extended money is called value.

Customer Satisfaction: Customer Satisfaction is depended on customer's expectations and products effectiveness.
For example, a customer use fair and lovely to increase fairness within four weeks. If she gets result within three weeks then she will get satisfaction.

(d) Exchange and Relationships

Exchange: Exchange is the act of obtaining a desired objective from someone by offering something in return.
Relationship Marketing: Relationship marketing is to build and maintain a long term relationship with customer.

(e) Markets: According to Philip Kotler & Gary Armstrong, "A market is the set of all actual and potential buyers of a product or service. Idea of market is created from the idea of transaction.

Figure: A Modern Marketing System.

02. Designing a Customer-Driven Marketing Strategy.

(a) Selecting Customers to Serve

• Market segmentation
• Target marketing

The first thing you need to decide is whom you will serve. Since you can't serve all customers in every way, you need to divide the market into segments and then select which of those segments you'll go after.

(b) Choosing a Value Proposition

• Differentiation
• Market positioning

The second thing you need to decide how you will target your customers and you do this by differentiating and positioning yourself in the marketplace. You need to ensure that you differentiate your brand from your competitors by creating strong value propositions.

(c) Marketing Management Orientation/ Marketing Management Concepts: There are five concepts under which organizations can design and carry out their marketing strategies.

1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal marketing concept/ Holistic marketing concept

1. Production concept: It is the oldest concept in business. It holds that consumers prefer products that are highly available and highly affordable.

2. Product concept: The product concept holds that consumers favor those products that offer highest quality performance or innovative features.

3. Selling concept: This concept holds that consumers will buy products only if the company promotes/sell these products.

4. Marketing concept: The marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. 

 Figure: Marketing concept.

                           

5. Societal marketing concept: This concept calls upon the marketers to build social and ethical considerations into their marketing practices. You have to purchase for social welfare.

          Figure: Societal Marketing Concept.

03. Preparing an Integrated Marketing Plan and Program.

The marketers develop an integrated marketing program that deliver the intend value to target customer. The marketing program consists of the firm's marketing mix.

Marketing mix is the combination of four elements called the 4p's (product, price, 

place, promotion).

Figure: Marketing mix. 

04. Building customer relationship.

(a) Customer Relationship Management

Customer Relationship Management is perhaps the most important concept of modern marketing. Customer Relationship Management the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Relationship Building Blocks: Customer Value and Satisfaction

The key to building lasting customer relationships is to create superior customer value and satisfaction.

• Customer-perceived value: It is the differences between all the benefits and all the costs of a market offering relative to those of competing offers.
• Customer satisfaction: It depends on the customers expectations and products effectiveness.

(b) Partner Relationship Management

Marketers must not only be good at customer relationship management, they must also be good at partner relationship management. Major changes are occurring in how marketers partner with others inside the company to jointly bring more value to customers.

1. Partner inside the company:

• All employees customer focused.
• Teams coordinates efforts toward customers.

2. Marketing partners outside the company:

• Supply chain management
• Strategic Alliances

05. Capturing Value from Customers.

(a) Creating customer loyalty and retention

The aim of customer relationship management is to create not just customer satisfaction, but customer delight. In turn, delighted customers remain loyal and talk favorably to others about the company and its products.

(b) Growing share of customers

The portion of the customers purchasing that a company gets in its product categories is called share of customers. Thus banks want to increase "share of wallet," Car companies want to increase "share of garage."

(c) Building customer equity

Customer equity is the total combined customer lifetime values of all of the company's customers. Companies should manage customer equity carefully.