Athens University of Economics and Business
Marketing of Financial Services Paulina Papastathopoulou, Ph.D. Lecturer in Marketing Department of Marketing and Communications
1
Athens University of Economics and Business
Introduction to Marketing Management
2
1
What is marketing?
Marketing is a social and managerial process by which individuals obtain what they need and want through creating, offering and exchanging products of value with others (Kotler 1997).
3
Definitions of marketing-related concepts (I)
Instincts. Human nature is full of instincts, such as hunger, thirst, protection against the forces of the environment etc. Needs. They are requirements for basic satisfaction.
Food, water, clothing, safety, belonging, esteem Needs are not created by marketing, they exist in human nature
Wants. They are desires for specific need satisfiers
They are numerous and may differ from person to person They are changing by the passage of time They are shaped by the political, economic, cultural and technological environment of a society 4
2
Definitions of marketing-related concepts (II)
Demands. They are wants for specific products, backed by an ability and willingness to acquire them.
A want is transformed to a demand when backed by purchasing power
Product. It is anything that can satisfy a need or a want. It can be a physical good, a service or an idea
Every physical good is surrounded by a number of services In most cases when people buy a physical good, they buy it for the services that it provides Broad-minded manufacturers focus on the services that surround their physical goods, not on the physical good itself 5
Peripheral services Installation Packaging
Delivery & terms of payment
Size Brand
After sales
Quality
Kotler, 1986,
Principals of Marketing
service
Core product Appearance
Warranties Product characteristics 6
3
Definitions of marketing-related concepts (III)
Value. It is the estimate of the consumer of the extent to which a product can satisfy his/her needs
Consumers can choose from a set of products Every product offers both functional value and symbolic value Different products provide different levels of value Customers seek value maximization Since products are purchased at a cost, customers usually have to make a tradeoff between value maximization and ability to buy the right product 7
Definitions of marketing-related concepts (IV)
Total customer value. It represents the aggregation of benefits that a customer expects from a good, a service or an idea Total customer cost. It is the aggregation of costs (monetary and non-monetary) that customers have to pay in order to locate, evaluate, purchase, use and divest a good, a service or an idea 8
4
Definitions of marketing-related concepts (V)
Customer delivered value. It is the difference between total customer value and total customer cost. Customer satisfaction. It depicts a customer’s feelings of pleasure or displeasure, emanating from comparing a good’s, a service’s or an idea’s actual performance with his/her pre-purchase expectations 9
Definitions of marketing-related concepts (VI)
Exchange. It is the process of obtaining a desired product from someone by offering something in return Transaction. It is a process of value trading between one or two parties Monetary transactions: A pays $100 to B, in order to acquire a desired value. Barter transactions: Non-monetary transactions, whereby products are traded for other products
10
5
Definitions of marketing-related concepts (VII)
Market. It is the total number of potential customers (consumer or organisational) who have similar needs or wants and who are willing and able to engage in an exchange process that will result in the satisfaction of their needs or wants Market segmentation. The process of investigating the total market in order to detect sizeable parts, consisting of customers with similar and specific needs and wants 11
Definitions of marketing-related concepts (VIII)
Targeting. It is the process of choosing one or more market segments and of concentrating corporate resources on them, in order to meet their needs and wants in the best way
12
6
The Marketing Mix
The marketing mix consists of a set of tools that companies operationalise and blend in order to pursue their marketing objectives in the target market. The traditional 4 P’s of the marketing mix are The product The price The promotion The place
13
The Stages of Marketing Adoption by Companies
Stage 1: Marketing is advertising, sales, promotion, and publicity Stage 2: Marketing is smiling and a friendly atmosphere Stage 3: Marketing is innovation Stage 4: Marketing is positioning of products Stage 5: Marketing is analysis, planning, implementation and control 14
7
Marketing Management
Marketing management is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational needs (American Marketing Association)
15
Specific marketing work vs Marketing management (I)
Marketing work refers to specific marketing mixrelated tasks and the people who perform it have clearly defined tasks e.g., Sales people do the sales Communications people do the advertising Statisticians do marketing research Front-line staff in service organisations deal with customer service
16
8
Specific marketing work vs Marketing management (II)
Marketing management is performed at a higher level of abstraction than marketing work, and involves compiling marketing programs that are a long-term guide for the dayto-day execution of a bundle of specific marketing tasks, e.g.,
Decisions on the composition of the product range (new product development, product modification, product elimination) Decisions on what segments to target Pricing decisions Logistics and distribution decisions 17
Types of a business’s orientation
The orientation of a business refers to the philosophy that underlies marketing efforts: The production orientation The product orientation The sales orientation The marketing orientation
18
9
The production orientation
The philosophy of the firm is premised on the belief that customers will buy those products that are widely available and low in cost. Managerial emphasis is placed on:
producing what is compatible and synergistic with the existing production methods and technology maximizing production efficiency (large production batches, standardized product) minimizing the production cost (economies of scale) achieving extensive distribution (making the product available in as many selling points as possible)
The philosophy ignores:
the concept of value the advantages of adapting the production process to the requirements of different segments of a market
19
The product orientation
The philosophy of the firm is based on the assumption that customers will prefer products that offer quality, performance and possess innovative features
Managerial emphasis in based on:
producing superior products modifying or improving them over time
This philosophy often results in:
omission to involve customers in the process of developing new products or improving existing ones ignorance of the extent to which customers are willing to pay for superior quality and performance arrogance towards competitors marketing myopia 20
10
The sales orientation
This philosophy is based on the assumption that customers do not purchase enough of the firm’s product, when they are not pushed.
Managerial emphasis is placed on: bombarding
customers with messages and material aiming at stimulating them buy more
This philosophy often results in: irritating
and alienating customers negative word of mouth communication about the firm practices 21
The marketing orientation (I)
This philosophy is based on the principal that the best way to achieve corporate objectives is the concentration of all corporate resources on satisfying the needs and wants of target markets more effectively than competitors Managerial emphasis is placed on:
the understanding that the market has segments of customers with different requirements putting customers first involving customers in the process of developing and improving products a willingness to change the way things are done in the firm in order to meet customers’ requirements more effectively orchestrating all functional areas towards the achievement of customer satisfaction (which is not the responsibility of the marketing department alone)
22
11
The marketing orientation (II)
This philosophy results in: increased
customer satisfaction enhanced customer loyalty positive word-of-mouth communication improved business performance
23
The sub-disciplines of marketing
Consumer-products’ marketing Business to Business (B2B) marketing Retail marketing Wholesale marketing
Services marketing
Not-for-profit marketing International marketing 24
12
Further reading
Levitt, T., (1960), “Marketing Myopia”, Harvard Business Review, Vol. 38, No. 4, pp. 45-56. Kohli, A.K. and Jaworski, B.J., (1990), “Market Orientation: The Construct, Research Propositions and Managerial Implications”, Journal of Marketing, Vol. 54, April, pp. 1-18.
25
13
