1. MARKETING MANAGEMENT 14th edition
Defining Marketing
for the
21st Century
Kotler Keller

2. Good Marketing is No Accident
Boston Beer Company, maker of Samuel Adams, constantly innovates

3. What is Marketing? Marketing is an organizational function
and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships
in ways that benefit the
organization and its stakeholders.

4. What is Marketing? Marketing Defined:
“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others”
Marketing is about managing profitable customer relationships
Attracting new customers
Retaining and growing current customers

5. What is Marketing Management?
Marketing management is the
art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.

6. Selling is only the tip of the iceberg
“There will always be need for
some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”
Peter Drucker

7. Core Marketing Concepts

8. Understanding the Marketplace
Need
State of felt deprivation
Example: Need food
Wants
The form of needs as shaped by culture and the individual
Example: Want a Big Mac
Demands
Wants which are backed by buying power
Core Concepts
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

9. Understanding the Marketplace
Core Concepts
Marketing offer
Combination of products, services, information or experiences that satisfy a need or want
Offer may include services, activities, people, places, information or ideas
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

10. Understanding the Marketplace
Core Concepts
Value
Customers form expectations regarding value
Marketers must deliver value to consumers
Satisfaction
A satisfied customer will buy again and tell others about their good experience
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

11. Value and Satisfaction
Perceived Value
The customer’s evaluation of the difference between benefits and costs.
Customers often do not judge values and costs accurately or objectively.
Customer Satisfaction
Product’s perceived performance relative to customer’s expectations.

12. Understanding the Marketplace
Core Concepts
Exchange
The act of obtaining a desired object from someone by offering something in return
One exchange is not the goal, relationships with several exchanges are the goal
Relationships are built through delivering value and satisfaction
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

13. For an exchange to occur….
There are at least two parties.
Each party has something that might be of value to the other party.
Each party is capable of communication and delivery.
Each party is free to reject the exchange offer.
Each party believes it is appropriate or desirable to deal with the other party.

14. Understanding the Marketplace
Core Concepts
Market
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

15. What is Marketed? Goods Services Events & Experiences Persons
Places & Properties
Organizations
Information
Ideas

16. Demand States Nonexistent Latent Negative Irregular Declining Full
Overfull
Unwholesome

17. Structure of Flows in a Modern Exchange Economy

18. A Simple Marketing System

19. The marketplace isn’t what it used to be…
Changing technology
Globalization
Deregulation
Privatization
Empowerment
Customization
Convergence
Disintermediation

20. Company Orientations
Production
Product
Selling
Marketing

21. Marketing Management Philosophies
Consumers favor products that are
available and highly affordable.
Improve production and distribution.
Consumers favor products that offer
the most quality, performance, and
innovative features.
Consumers will buy products only if
the company promotes/ sells these
products.
Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
markets & delivering superior value.
Production Concept
Product Concept
Selling Concept
Marketing Concept
Holistic Marketing Concept

22. The Selling and Marketing Concepts Contrasted

23. Holistic Marketing Dimensions

24. The Four P’s

25. Marketing Mix and the Customer
Four P’s
Product
Price
Place
Promotion
Four C’s
Customer solution
Customer cost
Convenience
Communication

26. The New Four Ps People Processes Programs Performance
If we update them to reflect the holistic marketing concept, we arrive at a more representative set that encompasses modern marketing realities: people, processes, programs, and performance, as in Figure 1.5.
People reflects, in part, internal marketing and the fact that employees are critical to marketing success.
Processes reflects all the creativity, discipline, and structure brought to marketing management. Programs reflects all the firm’s consumer-directed activities. It encompasses the old four Ps as well as a range of other marketing activities that might not fit as neatly into the old view of marketing.
We define performance as in holistic marketing, to capture the range of possible outcome measures that have financial and nonfinancial implications (profitability as well as brand and customer equity), and implications beyond the company itself (social responsibility, legal, ethical, and community related).
Performance
CHP: 1&5-26

27. Marketing-Mix Strategy

28. Factors Influencing Marketing Strategy

29. Marketing Management Tasks
Developing marketing strategies
Capturing marketing insights
Connecting with customers
Building strong brands
Shaping market offerings
Delivering value
Communicating value
Creating long-term growth

30. Create or Satisfy Needs?
Marketing Debate
Does Marketing
Create or Satisfy Needs?

31. MARKETING MANAGEMENT 14th edition5
Creating
Customer Value, Satisfaction, and Loyalty
Kotler Keller

32. Value and Satisfaction
Perceived Value
The customer’s evaluation of the difference between benefits and costs.
Customers often do not judge values and costs accurately or objectively.
Customer Satisfaction
Product’s perceived performance relative to customer’s expectations.

33. Determinants of Customer Perceived Value
Total customer benefit
Total customer cost
Product benefit
Monetary cost
Services benefit
Time cost
Personal benefit
Energy cost
Image benefit
Psychological cost

34. Determinants of Customer-Delivered Value
Total
customer
value
Product
value
Personal
value
Customer-
delivered
value
Total
customer
cost
Monetary
cost
Energy
cost

35. Loyalty A deeply held commitment to re-buy
or re-patronize a preferred product
or service in the future despite situational
influences and marketing efforts having
the potential to cause switching behavior.

36. The Value Proposition The whole cluster of benefits the
company promises to deliver

37. Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor competitive performance

38. Product and Service Quality
Quality is the totality of features and
characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.

39. Total Quality Management
TQM is an organization-wide
approach to continuously
improving the quality of
all the organization’s processes,
products, and services.

40. Maximizing Customer Lifetime Value
Profitability
Customer
Equity
Lifetime
Value

41. Customer-Product Profitability Analysis

42. Framework for CRM Identify prospects and customers
Differentiate customers by needs
and value to company
Interact to improve knowledge
Customize for each customer

43. CRM Strategies Reduce the rate of defection Increase longevity
Enhance “share of wallet”
Terminate low-profit customers
Focus more effort on high-profit customers

44. Mass vs. One-to-One Marketing
Average customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
One-way message
Economies of scale
One-to-One
Individual customer
Customer profile
Customized market offering
Customized production
Economies of scope
Share of customer

45. Customer Retention
Acquisition of customers can cost 5 times more than retaining current customers.
The average company loses 10% of its customers each year.
A 5% reduction to the customer defection rate can increase profits by 25% to 85%.
The customer profit rate increases over the life of a retained customer.

46. The Marketing Funnel
Figure 5.4 shows the main steps in attracting and retaining customers in terms of a funnel. The marketing funnel identifies the percentage of the potential target market at each stage in the decision process, from merely aware to highly loyal. Consumers must move through each stage before becoming loyal customers. Some marketers extend the funnel to include loyal customers who are brand advocates or even partners with the firm.
CHP: 1&5-46

47. The Customer-Development Process
Suspects
Prospects
Disqualified
First-time
customers
Repeat
customers
Clients
Members
Partners
Ex-customers

48. Building Loyalty
Partnership
Proactive
Accountable
Reactive
Basic

49. Forming Strong Customer Bonds
Add financial
benefits
Add social
benefits
Add structural
ties