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Summary Principles of Marketing, ISBN: 9781292269610 Marketing
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Chapters 1 to 3 and 5 to 7 are described using texts, graphs and pictures.
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Marketing & SalesChapter 1, marketing: creating customer value and engagement
What is marketing?
- Marketing: is a process by which companies create value for customers and build
strong customer relationships to capture value from customers in return.
The marketing process:
A simple model of the marketing process.
- Marketing: the process by which companies engage customers, build strong
customer relationships and create customer value in order to capture value from
customers in return.
Understanding the marketplace and customer needs, there are five core customer and
marketplace concepts:
1. Needs, wants and demands
2. Market offerings (goods, services and experiences)
3. Value and satisfaction
4. Exchanges and relationships
5. Markets
1. Customer needs, wants and demands
- Needs: marketers cannot create this needs.
o States of deprivation
o Physical: food, clothing, warmth and safety
o Social: belonging and affection
o Individual: knowledge and self-expression
- Wants: a German customer needs food but wants a sausage and beer…
o Form that needs to take as they are shaped by culture and individual
personality
- Demands
o Wants backed by buying power
2. Market offerings, products, services and experiences
- Market offerings: are some combination of products, services, information,
experiences offered to a market to satisfy a need or want.
- Marketing myopia: the mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by these products.
, For example, an owner of a Ferrari they don’t only buy it because they want it is an
expression of their status, taste and style.
3. Customer value and satisfaction expectations
- Marketers
o Set the right level of expectations
o Not too high or low
- Customers
o Value and satisfaction
4. Exchanges and relationships
- Exchange: is the act of obtaining a desired object from someone by offering
something in return. Companies want to build strong relationships by delivering
customer value. The customer also feels a relationship and is buying your products or
services.
5. Markets, the set of all actual and potential buyers of a product or service. These
buyers share a particular need or want that can be satisfied through exchange
relationships.
In the figure you can see that the company and competitors research the market and
interact with consumers to understand their needs. Then they create and exchange
market offerings, messages and other marketing content with consumers, either
directly or through marketing intermediaries. Each part in the system is affected by
major environmental factors (social, demographic, technological, economic, natural,
political). Each company adds value for the next level and the arrows represent
relationships that must be developed and managed.
,Designing a customer value-driven marketing strategy and plan
- Marketing management: is the art and science of choosing target markets and
building profitable relationships with them
o What customers will we serve? (what is our target market)
o How can we best serve these customers? (what’s our value proposition)
Selecting customers to serve, the company does this by dividing the market into segments of
customers (market segmentation) and selecting which segments it will go after (target
marketing)
- Market segmentation: refers to dividing the markets into segments of customers
- Target marketing: refers to which segments to go after
Choosing a value proposition
- Value proposition: is the set of benefits or values a company promises to deliver to
customers to satisfy their needs.
Marketing management orientations (marketing strategies):
- Production concept: is the idea that consumers will favour products that are available
or highly affordable, therefore the company should focus on improving production
and distribution efficiency.
- Product concept: is the idea that consumers will favour products that offer the most
quality, performance and features and that the organization should therefore devote
its energy to making continuous product improvements.
- Selling concept: is the idea that consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effort. It focusses on creating
sales transactions rather than on building long-term, profitable customer
relationships.
- Marketing concept: is the idea that achieving organisational goals depends on
knowing the needs and wants of the target markets and delivering the desired
satisfactions better than competitors do.
, - Societal marketing concept: the idea that a company’s marketing decisions should
consider customers’ wants, the company’s requirements, consumers’ long-term
interests and society’s long-run interests. It overlooks possible conflicts between
consumer short-run wants and consumers long-run welfare.
Preparing an integrated marketing plan and program, the company’s marketing strategy
outlines which customers it will serve and how it will create value for these customers. Next,
the marketer develops an integrated marketing programme that will actually deliver the
intended value to target customers. To deliver it they use the marketing mix.
- The marketing mix: set of tools (four Ps) the firm uses to implement its marketing
strategy. It includes product, price, promotion and place.
- Integrated marketing program: comprehensive plan that communicates and delivers
the intended value to chosen customers.
Building customer relationships
Customer relationship management (CRM)
- The overall process of building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.
Relationship building blocks: customer value and satisfaction, the key to building customer
relationships is to create superior customer value and satisfaction. Satisfied customers are
more likely to be loyal customers and give the company a larger share of their business. A
customer buys from a firm that offers the highest customer-perceived value (the customer’s
evaluation of the difference between all the benefits and all the costs of a marketing offer
relative to those of competing offers). To some consumers value means, paying more to get
more or sensible products for affordable prices. Customer satisfaction (the extent to which a
product’s perceived performance matches a buyer’s expectations). If the product’s
performance falls short of expectations the customer is dissatisfied. If performance matches
expectations, the customer is satisfied.
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