UNDERSTANDING MARKETING AND MARKETING PROCESS Chapter 1 UNDERSTANDING MARKETING AND MARKETING PROCESS

Many people think of Marketing only as selling and advertising. However, selling and advertising is only the tip of the marketing iceberg. Although they are important, they are only two of many marketing functions.

Originally the term Market stood for the place where buyers and sellers gathered to exchange their goods, such as a village square. Marketers work to understand the needs and wants of specific markets and to select the markets that they can serve best. In turn they develop products and services that create value and satisfaction for customers in these markets. The result is profitable long-term customer relationships.

Market is the set of all actual and potential buyers of a product or service.

Today, Marketing must be understood not in the old sense of making a sale- but in the new sense of Satisfying customer needs.

Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products of value with others.

Core marketing concepts NEEDS: The most basic concept underlying marketing is that of human need. ‘Human needs are states of felt deprivation’. They include basic physical needs for food, clothing, warmth and safety.

WANTS: Wants are described in terms of objects that will satisfy needs They are shaped by culture and individual personality. Example: If an American needs food wants big Mac Donald, French fries etc. if a person in Mauritius needs food wants a mango, rice, lentils and beans etc.

DEMANDS: Given there wants and resources, people demand products with benefits that add up to the most value and satisfaction. ‘When back by buying power wants become demand’.

What are marketing offers? MARKETING OFFERS- ‘Products, Services and Experiences’

Marketing offers are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing offers are not limited to physical products.

In addition to tangible products, marketing offers include services, activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel etc.

‘Marketing occurs when people decide to satisfy needs and wants through exchange’. Exchange is the act of obtaining a desired object by offering something in return. Transaction consists of a trade of value between two parties.

CUSTOMER VALUE AND SATISFACTION Consumers usually face a broad range of products and services offered to them that might satisfy a given need. How do they make their choice among the given Marketing offers? Consumers make choices based on their perception of the value and satisfaction that various products and services deliver.

Customer Value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the product. Customer Satisfaction with a purchase depends on how well the product’s performance lives up to the customer’s expectations. Customer satisfaction is a key influence on future buying behavior.

Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and discourage the products to others.

CUSTOMER RELATIONSHIP MANAGEMENT Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Thus, today’s companies are going beyond designing strategies to attract new customers and create transactions with them. They are using customer relationship management to retain current customers and build profitable, long term relationships with them. The new view is that ‘Marketing is the science and art of finding, retaining and growing profitable customers’.

MARKETING MANAGEMENT ‘The Art and Science of choosing target markets and building profitable relationships with them’. This involves getting, keeping and growing customers through creating, delivering and communicating superior customer value. Thus, marketing management involves managing demand, which in turn involves managing customer relationships.