Marketing

Prof. Dr. Mile Vasić

mile.vasic@srh.de
Defining Marketing
Part I
Defining Marketing

Content
What Is Marketing?

Understanding the Marketplace and Customer Needs

Designing a Customer Value–Driven Marketing Strategy and Plan

Managing Customer Relationships and Capturing Customer Value

The Changing Marketing Landscape

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Defining Marketing

What Is Marketing?
Marketing – engaging customers and managing profitable customer relationships.

attract new keep current

customers customers
by delivering satisfaction
by offering great value

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Defining Marketing

What Is Marketing?
WHO needs marketing and WHY?

Proft orientied companies

Non-profit oriented companies

Public companies/institutions

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Defining Marketing

What Is Marketing?
What do you think how much money conpany invest in marketing anually?

Depends on the industry:

• Technology and Software: 11%
• Retail and E-commerce: 5-10%
• Healthcare and Pharmaceuticals: 6% (up to 14% for aggressive growth companies)
• Financial Services: 7-10%
• Manufacturing and Industrial: 5-7.5%

• 5-10% in avarage
• 25-50% on digital marketing

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Defining Marketing

What Is Marketing?
Are you familiar with the various job roles in marketing, and would you consider
working in marketing?

Would you be interested in any of these roles? If so, which ones and why?

CMO (Chief Marketing Officer)

VP of Marketing
Director of Marketing
Marketing Analyst
Marketing Assistant
Marketing Associate
Marketing Coordinator
Marketing Consultant
Marketing Manager
Marketing and Promotions Manager
Marketing Specialist

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Defining Marketing

What Is Marketing?

understanding creating
customer needs value

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Defining Marketing

What Is Marketing?
Five-step model of the marketing process for creating and capturing customer value

Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson Education Limited, 2018, pp. 30

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Defining Marketing

Understanding the Marketplace and

Five core customer and marketplace concepts: Customer Needs

1. needs, wants, and demands;

2. market offerings (products, services, and experiences);
3. value and satisfaction;
4. exchanges and relationships; and
5. markets.

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Defining Marketing

Understanding the Marketplace and

Needs - States of felt deprivation (basic requirements). Customer Needs
Customer Needs, Wants, and
Wants - The form human needs take as they are shaped by culture and individual Demands
personality (ways to fulfill the needs).
Five core customer and marketplace concepts:

Demands - Human wants that are backed by buying power (means) become demands. 1.
2.
needs, wants, and demands;
market offerings (products, services, and
experiences);
3. value and satisfaction;
4. exchanges and relationships; and
5. markets.

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Defining Marketing

Understanding the Marketplace and

Market offerings – Some combination of products, services, information, benefits or Customer Needs
experiences offered to a market to satisfy a need or want. Market Offerings – Products,
Services, and Experiences

Five core customer and marketplace concepts:

’’benefits or experiences’’???
1. needs, wants, and demands;
2. market offerings (products, services, and
experiences);
3. value and satisfaction;
4. exchanges and relationships; and
5. markets.

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Defining Marketing

Understanding the Marketplace and

Exchange – the act of obtaining a desired object from someone by offering Customer Needs
something in return. Exchanges and Relationships

Five core customer and marketplace concepts:

1. needs, wants, and demands;

2. market offerings (products, services, and
experiences);
3. value and satisfaction;
4. exchanges and relationships; and
5. markets.

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Defining Marketing

Understanding the Marketplace and

Market – the set of all actual and potential buyers of a product or service with similar Customer Needs
needs and wants. Market

Five core customer and marketplace concepts:

Customers
Stakeholders 1. needs, wants, and demands;
2. market offerings (products, services, and
Competition experiences);
... 3. value and satisfaction;
4. exchanges and relationships; and
5. markets.

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Defining Marketing

Designing a Customer Value–Driven

Marketing Management - the art and science of choosing target markets and Marketing Strategy and Plan
building profitable relationships with them. Customer Value–Driven Marketing
Strategy

1. Which customers will we serve? (target market), and

2. How will we serve them best? (value proposition)

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Defining Marketing

Designing a Customer Value–Driven

Marketing Management - the art and science of choosing target markets and Marketing Strategy and Plan
building profitable relationships with them. Customer Value–Driven Marketing
Strategy

Selecting Customers to Serve

1. Which customers will we serve? (target market), and
2. How will we serve them best? (value proposition)

• Market Segmentation
• Targeting

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Defining Marketing

Designing a Customer Value–Driven

Marketing Management - the art and science of choosing target markets and Marketing Strategy and Plan
building profitable relationships with them. Customer Value–Driven Marketing
Strategy

Choosing a Value Proposition

1. Which customers will we serve? (target market), and
2. How will we serve them best? (value proposition)

A value proposition is the set of benefits a brand promises to deliver to satisfy

customers’ needs.

"Why should I choose this brand over others?„

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Defining Marketing

Designing a Customer Value–Driven

Marketing strategies are guided by different philosophies: Marketing Strategy and Plan
Customer Value–Driven Marketing
The Production Concept: Focuses on making products available and affordable. This Strategy
approach improves production and distribution efficiency.
Marketing Management Orientation

The Product Concept: Emphasizes product quality and innovation.

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Defining Marketing

Designing a Customer Value–Driven

Marketing strategies are guided by different philosophies: Marketing Strategy and Plan
Customer Value–Driven Marketing
The Selling Concept: Relies on aggressive selling and promotion, often used for Strategy
unsought goods. This approach focuses on making sales rather than building long-term
Marketing Management Orientation
customer relationships.

The Marketing Concept: Centers on understanding and satisfying customer needs better
than competitors. It’s a customer-focused approach that seeks to deliver value and build
strong relationships.

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Defining Marketing

Designing a Customer Value–Driven

Marketing strategies are guided by different philosophies: Marketing Strategy and Plan
Customer Value–Driven Marketing
The Societal Marketing Concept: Considers both customer satisfaction and societal well- Strategy
being. It emphasizes sustainable and socially responsible marketing that benefits both
Marketing Management Orientation
consumers and society.

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Defining Marketing

Designing a Customer Value–Driven

4P of Marketing Mix Marketing Strategy and Plan
Preparing an Integrated Marketing
Product: Creating a product that satisfies customer needs. Plan and Program
Price: Setting a price that reflects the value of the product.
Place: Making the product available to customers.
Promotion: Communicating the value of the product to customers.

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Defining Marketing

Managing Customer Relationships and

• customer relationship management (CRM), and Capturing Customer Value
• strategies for deeper customer engagement in the digital and social marketing Engaging Customers and Managing
Customer Relationships

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Defining Marketing

Managing Customer Relationships and

• customer relationship management (CRM), and Capturing Customer Value
• strategies for deeper customer engagement in the digital and social marketing Engaging Customers and Managing
Customer Relationships

Customer Relationship Management

CRM is a critical modern marketing concept, encompassing the overall process of building and
maintaining profitable customer relationships by delivering superior value and satisfaction; it
involves acquiring, engaging, and growing customers.

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Defining Marketing

Managing Customer Relationships and

Relationshiop building blocks Capturing Customer Value
Engaging Customers and Managing
Value + Satisfaction = Loyalty Customer Relationships

Customer Relationship Management

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Defining Marketing

Managing Customer Relationships and

Customer satisfaction Capturing Customer Value
Engaging Customers and Managing
• exceptional customer service Customer Relationships
• low pricing
Customer Relationship Management

HIGH satisfaction LOW profitability

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Defining Marketing

Managing Customer Relationships and

Customer Relationship Levels and Tools Capturing Customer Value
Engaging Customers and Managing
Levels of Relationships Customer Relationships
Basic Relationships
Customer Relationship Management
Full Partnerships
Marketing Tools
Frequent-Flier Programs
Room Upgrades
Discounts
Loyalty programs

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Defining Marketing

Managing Customer Relationships and

Customer-engagement marketing - Making the brand a meaningful part of Capturing Customer Value
consumers’ conversations and lives by fostering direct and continuous customer Engaging Customers and Managing
involvement in shaping brand conversations, experiences, and community. Customer Relationships

Customer Engagement and Today’s

Digital and Social Media

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Defining Marketing

Managing Customer Relationships and

Partner relationship management - Working closely with partners in other Capturing Customer Value
company departments and outside the company to jointly bring greater value to Engaging Customers and Managing
customers. Customer Relationships

Partner Relationship Management

• Internal Coordination: Ensuring all departments align with marketing goals.
• External Partnerships: Working with suppliers, distributors, and other channel
partners.

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Defining Marketing

Managing Customer Relationships and

Capturing Customer Value
Capturing Value from Customers

customer value

customer loyalty
market share
equity

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Defining Marketing

Managing Customer Relationships and

Capturing Customer Value
Capturing Value from Customers

Creating Customer Loyalty and

Retention
customer relationship
management customer satisfaction

loyalty

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Defining Marketing

The Changing Marketing Landscape

Major Trends and Forces Shaping Marketing
The Digital Age: Online, Mobile, and Social Media Marketing
Websites
social media
mobile ads and apps
online video
Email
blogs, and other.
Social Media Marketing
Mobile Marketing

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Defining Marketing

Key Terms
Marketing Production Concept
Needs Product Concept
Wants Selling Concept
Demands Marketing Concept
Market offerings Societal Marketing Concept
Exchange Customer Relationships
Market Management (CRM)
Marketing Management Customer-engagement marketing
Value proposition Partner relationship management

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Defining Marketing
Part II
Defining Marketing

Content
Company-Wide Strategic Planning: Defining Marketing’s Role

Designing the Business Portfolio

Planning Marketing: Partnering to Build Customer Relationships

Marketing Strategy and the Marketing Mix

Managing the Marketing Effort and Marketing Return on Investment

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Defining Marketing

Company-Wide Strategic Planning:

Strategic planning – the process of developing and maintaining a strategic fit between Defining Marketing’s Role
the organization’s goals and capabilities and its changing marketing opportunities.

Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson Education Limited, 2018, pp. 65
Defining Marketing

Company-Wide Strategic Planning:

Mission statement – a statement of the organization’s purpose—what it wants to Defining Marketing’s Role
accomplish in the larger environment. Defining a Market-Oriented Mission

What is our business?

Who is our customer?
What do our customers value?
What should our business become?
Defining Marketing

Company-Wide Strategic Planning:

1. Translate the broad mission: If the mission is “to be the top choice for office Defining Marketing’s Role
supplies,” an objective might be “increase sales to businesses by 20% in one Setting Company Objectives and
year.” Goals
2. Assign specific objectives: A sales manager might have the goal “get 50 new
business customers in the next three months.”
3. Develop business objectives: “Increase total sales by 15% this year by getting
more customers and keeping existing ones.”
4. Set marketing objectives: “Make more small businesses aware of our brand by
25% in the next six months.”
5. Create strategies and programs: “Start a special ad campaign, run sales
promotions, and improve our website.”
6. Define detailed action plans: “For the ad campaign, create 10 online ads, send
out a promotional flyer, and hold 5 online events for small businesses in the next
two months.
Defining Marketing

Designing the Business Portfolio

Business portfolio – The collection of businesses and products that make up the
company.

Planning a business portfolio involves two main steps:

1. analyze the current business portfolio and determine which businesses should
receive more, less, or no investment
2. shape the future portfolio by developing strategies for growth and downsizing.
Defining Marketing

Designing the Business Portfolio

Portfolio analysis - The process by which management evaluates the products and
businesses that make up the company. Analyzing the Current Business
Portfolio

First step is to identify strategic business units (called SBUs)

• A division
• A product line
• A single brand
• ....

Second step is to evaluate how stronbg and attractive each SBU is.
Defining Marketing

Designing the Business Portfolio

uses „Growth-share matrix„ to evaluate their different business
units (called SBUs). There are four types of SBUs: Analyzing the Current Business
Portfolio
Stars: These are businesses or products with high growth and high market share. They
need a lot of investment to keep growing, but eventually, their growth slows, and they
become "cash cows."

Cash Cows: These have a high market share but low growth. They are strong and bring in a
lot of money with little investment, helping the company fund other projects.

Question Marks: These have low market share in fast-growing markets. They require a lot
of money to hold or grow, and management has to decide whether to invest in them to
turn them into stars or phase them out.

Dogs: These have low growth and low market share. They may make enough to support
themselves but aren't likely to be big money-makers.
Photo Source: https://www.resene.co.nz/paintdec/articles/the-
boston-matrix.htm
Defining Marketing

Designing the Business Portfolio

Product/market expansion grid - A portfolio-planning tool for identifying company
growth opportunities through market penetration, market development, product Developing Strategies for Growth and
development, or diversification. Downsizing

Market penetration - Company growth by increasing sales of

current products to current market segments without changing the
product.

Market development - Company growth by identifying and

developing new market segments for current company products.

Product development - Company growth by offering modified or

new products to current market segments.

Diversification - Company growth through starting up or acquiring Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson
Education Limited, 2018, pp. 71

businesses outside the company’s current products and markets.

Defining Marketing

Marketing Strategy and the

Marketing strategy - The marketing logic by which the company hopes to create Marketing Mix
customer value and achieve profitable customer relationships.

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Defining Marketing

Marketing Strategy and the

Managing Marketing Marketing Mix
Strategies and the
Marketing Mix

Source: Philip Kotler, Gary Armstrong, and Marc Oliver

Opresnik. Principles of Marketing: Global Edition. 17th ed.,
Pearson Education Limited, 2018, pp. 74 43
Defining Marketing

Marketing Strategy and the

Market segmentation - Dividing a market into distinct groups of buyers who have Marketing Mix
different needs, characteristics, or behaviors and who might require separate marketing Customer Value–Driven Marketing
strategies or mixes. Strategy

Market segment - A group of consumers who respond in a similar way to a given set of
marketing efforts.

Market targeting - Evaluating each market segment’s attractiveness and selecting one or
more segments to serve.

Positioning - Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers.

Differentiation - Actually differentiating the market offering to create superior customer

value.

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Defining Marketing

Marketing Strategy and the

The Four Ps of the Marketing Mix Marketing Mix
Developing an Integrated Marketing
Mix

Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson Education Limited,
2018, pp. 78
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Defining Marketing

Marketing Strategy and the

The Four As of the Marketing Mix Marketing Mix
Developing an Integrated Marketing
Mix

Acceptability Affordability Accessibility Awareness

(Product) (Price) (Place) (Promotion)

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Defining Marketing

Managing the Marketing Effort and

Managing Marketing Marketing Return on Investment
Managing the Marketing Effort

Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson Education Limited, 2018, pp. 79
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Defining Marketing

Managing the Marketing Effort and

Marketing Analysis Marketing Return on Investment
Managing the Marketing Effort
SWOT analysis - An overall evaluation of the company’s strengths (S), weaknesses
(W), opportunities (O), and threats (T).

Source: Philip Kotler, Gary Armstrong, and Marc Oliver Opresnik. Principles of Marketing: Global Edition. 17th ed., Pearson Education Limited, 2018, pp. 80
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Defining Marketing

Key Terms
Strategic planning Value delivery network
Mission statement Marketing strategy
Business portfolio Market segmentation
Portfolio analysis Market segment
Market penetration Market targeting
Market development Positioning
Product development Differentiation
Diversification SWOT analysis
Value chain Marketing return on investment - (marketing ROI)

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Defining Marketing

Assignments
1. Watch Video Philip Kotler on Marketing https://www.youtube.com/watch?v=sR-qL7QdVZQ&t=210s
and write a summary of the most important points or insights you gained from the professor's talk.
2. Business Principles and Concepts Case Studies and Exercises – Exercise 012: Analysis of the 4Ps for
a Product X
3. Learning Diary

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Thank you!
Prof. Dr. Mile Vasić
mile.vasic@srh.de