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Summary Marketing CAB3
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Summary of all the marketing chapters covered in the exam.
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Marketing summary Principles of Marketing 18th edition
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Summary: Principles of Marketing 18e Global Edition - Marketing (MAN-BCU2008)
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Chapter 1Objective 1-1 Define marketing and outline the steps in the marketing process
Marketing is engaging customers and managing profitable customer relationships. The twofold goal of
marketing is to:
1. Attract new customers by promising superior value
2. Keep and grow current customers by delivering value and satisfaction
Marketing must be understood in the sense of satisfying customer needs. Selling and advertising are
only part of a larger marketing mix → set of marketing tools used to engage customers, satisfy
customer needs, and build customer relationships.
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.
By creating value for customers, marketers capture value from customers in return. The five-step
marketing process is:
1. Understand the marketplace and customer needs and wants
2. Design a customer value-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Engage customers, build profitable relationships, and create customer delight
5. Capture value from customers to create profits and customer equity
Objective 1-2 Explain the importance of understanding the marketplace and customers and
identify the five core marketplace concepts
Marketers need to understand customer needs and wants and the marketplace in which they operate.
Needs: States of felt deprivation. They include basic physical needs for food, clothing, warmth, and
safety. Social needs for belonging and affection. Individual needs for knowledge and self-expression.
Wants: The form human needs take as they are shaped by culture and individual personality. Are
described in terms of objects that will satisfy those needs.
Demands: Human wants that are backed by buying power.
Outstanding marketing companies go to great lengths to learn about and understand their customers’
needs, wants, and demands.
Market offerings: Some combination of products, services, information, or experiences offered to a
market to satisfy a need or want. It also includes other entities, such as persons, places,
organizations, information, ideas, and causes.
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. They forget that a product is only a
tool to solve a consumer problem. These sellers will have trouble if a new product comes along that
serves the customer’s needs better of less expensively.
Customers form expectations about the value and satisfaction that various market offerings will deliver
and buy accordingly. Satisfied customers buy again and tell others about their good experiences.
Marketers should set the right level of expectations. Too low may satisfy those who buy buy fail to
attract enough buyers. Too high, buyers will be disappointed.
,Exchange: The act of obtaining a desired object from someone by offering something in return.
Marketing occurs when people decide to satisfy needs and wants through exchange relationships.
Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships
with target audiences involving a product, service, idea, or other object. Companies want to build
strong relationships by consistently delivering superior customer value.
Market: The set of all actual and potential buyers of a product or service. These buyers share a
particular need or want. Marketing means managing markets to bring about profitable customer
relationships. Activities such as consumer reseach, product development, communication, distribution,
pricing, and service are core marketing activities. Consumers do marketing when they:
1. Search for products
2. Interact with companies to obtain information
3. Make purchases
In addition to customer relationship management, today’s marketers must also deal effectively with
customer-managed relationships as customers are empowered and marketing is a two-way affair.
Marketing involves serving a market of final consumers in the face of competitors. Each party in the
system adds value for the next level and is affected by major environmental forces like demographic,
economic, natural, technological, politcal, social and cultural.
A company’s succes at engaging customers and building profitable relationships depends not only on
its own actions but also on how well the entire system serves the needs of final consumers.
Objective 1-3 Identify the key elements of a customer value-driven marketing strategy and
discuss the marketing management orientations that guide marketing strategy
Marketing management: The art and science of choosing target markets and building profitable
relationships with them. Aim is to engage, keep, and grow target customers by creating, delivering,
and communicating superior customer value. Two important questions are:
1. What customers will we serve? (target market)
This is done by dividing the market into segments of customers (market segmentation) and
selecting which segments it will go after (target marketing).
2. How can we best serve these customers? (value proposition)
A brand’s value proposition is the set of benefits or values it promises to deliver to consumers
to satisfy their needs. They answer the customer’s question about which brand to choose.
Companies must design strong value propositions that give them the greatest advantage in
their target markets.
,There are five concepts under which organizations design and carry out their marketing strategies:
1. Production concept: Idea that consumers will favor products that are available and highly
affordable. The organization should focus on improving production and distribution efficiency.
This concept can lead to marketing myopia and losing sight of the real objective → satisfying
customer needs and building customer relationships.
2. Product concept: Idea that consumers will favor products that offer the most quality,
performance, and features. The organization should devote its energy to making continuous
product improvements. This concept can also lead to marketing myopia.
3. Selling concept: Idea that consumers will not buy enough of the firm’s products unless the
firm undertakes a large-scale selling and promotion effort. This concept is typically practiced
with unsought goods, those that buyers do not normally think of buying. It focuses on creating
sales transactions rather than on building long-term, profitable customer relationships. Aim is
often to sell what the company makes rather than to make what the market wants.
4. Marketing concept: A philosophy in which achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired satisfactions better
than competitors do. Customer focus and value are the paths to sales and profits. Instead of a
product-centered make-and-sell philosophy, the marketing concept is a customer-centered
sense-and-respond philosophy. The job is not to find the right customers for your product but
to find the right products for your customers.
5. Societal marketing concept: Idea that a company’s marketing decisions should consider
consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s
long-run interests. This concept holds that marketing strategy should deliver value to
customers in a way that maintains or improves both consumers’ and society’s well-being. It
calls for sustainable marketing, socially and environmentally responsible marketing that meets
the present needs of consumers and businesses while also preserving or enhancing the ability
of future generations to meet their needs. Shared value recognizes that societal needs, not
just economic needs, define markets.
, 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 program that will actually
deliver the intended value to target customers → builds customer relationships by transforming the
marketing strategy into action. Consists of the firm’s marketing mix:
1. Product: To deliver its value proposition, the firm must create a need-satisfying market offering
2. Price: It must decide how much it will charge for the offering
3. Place: It must decide how it will make the offering available to target consumers
4. Promotion: It must engage target consumers, communicate about the offering, and persuade
consumers of the offer’s merits
The firm must blend each marketing mix tool into a comprehensive integrated marketing program that
communicates and delivers the intended value to chosen customers.
Objective 1-4 Discuss customer relationship management and identify strategies for creating
value for customers and capturing value from customers in return
First three steps in the marketing process all lead up to the fourth and most important step, building
and managing profitable customer relationships.
Customer relationship management: The overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction. It deals with all aspects
of acquiring, engaging, and growing customers. Relationships building blocks are:
1. 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. A customer
buys from the firm that offers the highest customer-perceived value.
2. Customer satisfaction: The extent to which a product’s perceived performance matches a
buyer’s expectations. Satisfied customers are more likely to be loyal customers. Smart
companies aim to delight customers by promising only what they can deliver and then
delivering more than they promise.
Customer-engagement marketing: Making the brand a meaningful part of consumers’ conversations
and lives by fostering direct and continuous customer involvement in shaping brand conversations,
experiences, and community. Today’s companies are using online, mobile, and social media to refine
their targeting and to engage customers more deeply and interactively. Today’s consumers are better
informed, more connected, and more empowered than ever before. Marketers are now embracing not
only customer relationship management but also customer-managed relationships, in which customers
connect with companies and with each other to help forge and share their own brand experiences.
Customer brand advocacy: Actions by which satisfied customers initiate favorable interactions with
others about a brand. Greater consumer empowerment means that companies can no longer rely on
marketing by intrusion. Instead, they must practice by attraction → creating market offerings and
messages that engage consumers rather than interrupt them. Succesful engagement marketing
means making relevant and genuine contributions to targeted consumers’ lives and interactions.
Consumer-generated marketing: Brand exchanges created by consumers themselves, both invited
and uninvited, by which consumers are playing an increasing role in shaping their own brand
experiences and those of other consumers. Might happen through uninvited consumer-to-consumers
exchanges in blogs, social media, etc. Increasingly, companies invite consumers to play a more active
role in shaping products and brand content. Brands must embrace this increased consumer
empowerment and master the digital and social media relationship tools.
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