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Introduction to Marketing: Value Exchange Process

Introduction to Marketing: Value Exchange Process. Prof Agus W. Soehadi PhD aws@pmbs.ac.id. Hugo Boss. What is Marketing?. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services

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Introduction to Marketing: Value Exchange Process

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  1. Introduction to Marketing: Value Exchange Process Prof Agus W. Soehadi PhD aws@pmbs.ac.id

  2. Hugo Boss

  3. What is Marketing? Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges (maintain relationship) that satisfy individual and organizational objectives (AMA 2004)

  4. Nike

  5. What is Marketing? Starting point Means Ends Focus The Selling Concept Existing products Selling and promoting Profits through sales volume Factory The Marketing Concept Customer needs Integrated marketing Profits through customer value Market

  6. Indo Mie

  7. MODERN MARKETING SYSTEM Company (marketer) Marketing Intermediaries Final Users Suppliers Competitors

  8. MARKETING PROCESS Capture value from customers in return Create value for customers and build customer relationships Construct an integrated marketing programs that delivers superior value Build profitable relationships and create customer delight Capture value from customers to create profit and customer equity Understand the marketplace and customer needs wants Design a customer-driven marketing strategy

  9. The Marketing Process • A simple model of the marketing process: • Understand the marketplace and customer needs and wants. • Design a customer-driven marketing strategy. • Construct a marketing program that delivers superior value. • Build profitable relationships and create customer delight. • Capture value from customers to create profits and customer quality. Gabbot (2004)

  10. Holcim

  11. Needs, Wants, & Demands • Need:State of felt deprivation including physical, social, and individual needs. • Physical needs: • Food, clothing, shelter, safety • Social needs: • Belonging, affection • Individual needs: • Learning, knowledge, self-expression Gabbot (2004)

  12. Needs, Wants, & Demands • Wants:Form that a human need takes, as shaped by culture and individual personality. • Wants + Buying Power = Demand Gabbot (2004)

  13. Need / Want Fulfillment • Needs and wants are fulfilled through a Marketing Offer: • Some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Gabbot (2004)

  14. Services Activity or benefit offered for sale that is essentially intangible and does not result in ownership. Need / Want Satisfiers • Products: • Persons • Places • Organizations • Information • Ideas • Brand Experiences: “. . . dazzle their senses, touch their hearts, stimulate their minds.” Gabbot (2004)

  15. Mercedes-Benz

  16. Products Needs, wants, and demands THE CONCEPT OF EXCHANGE (Why people buy?) Kotler (2006)

  17. Marketing as an exchange WHAT IS EXCHANGED • There are many definitions and models of how exchange takes place but importantly we must ask ‘what is being exchanged. • Meanings associated with exchange: • Utilitarian exchange • Symbolic exchange • Hedonic exchange • Composite exchange

  18. Marketing as an exchange Utilitarian exchange • This type of exchange is referred to as economic exchange. Goods are given in return for money or other goods. Symbolic exchange • Symbolic exchange is an exchange where the transaction involves psychological or social characteristics.

  19. Marketing as an exchange Hedonic exchange • Hedonic exchange refers to an exchange where the transaction involves satisfying five senses Composite exchange • Composite exchange refers to an exchange that has both utilitarian and symbolic meaning.

  20. Starbucks Coffee

  21. Exchanging value • Holbrook extracts three key sources of customer value: • 1. Interaction • 2. Comparison • 3. Experience • Interaction, comparison and experience form a value system.

  22. Exchanging value Customer value is: • 1. A trade off between product quality and the price • 2. A trade off between a set of benefits and specific categories of costs • 3. The hierarchy of derived benefits obtained from particular product attributes when using the product • 4. The resulting emotional, practical and logical worth associated with the product • 5. A trade off between received value and desired value

  23. Conclusion Company (marketer) Marketing Intermediaries Final Users Suppliers Competitors Value Exchange

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