Chapter 1: Marketing Principles and Practice
> Objectives
1. Define the marketing concept
2. Understand the concepts of exchange in marketing and the marketing mix
3. Explain how marketing has developed over the twentieth century and into the twenty-first
century.
4. Describe the three major contexts of marketing application, i.e. consumer goods, business-to-
business, and services marketing.
5. Understand the positive contribution marketing makes to society.
1.1 What is marketing?
> Marketing
= Marketing is a social and managerial process by which individuals and groups obtain what they
need and want through creating and exchanging products and value with others.
> Exchange
= the act of obtaining a desired object from someone by offering something in return
Exchange creates value, gives people more consumption choices or possibilities!
Vb. pokemon kaarten uitwisselen -> voor geld, voor vrienden(creeert waarde want je
vriendin wordt blij)
> Value
Value => customer value: the consumer’s assessment of the product’s overall capacity to satisfy his
or her needs
> Marketing applies to…
1. Physical products
2. Services
3. Retail
4. Experiences
5. Events
6. Film, music & theater
7. Places
8. Ideas
9. Charities and non-profits
10. People
-> Marketing applies anywhere “buyers” have a choice
1.2 What is the difference between customers and consumers?
A consumer is always the end user of a product or service, but might not have purchased it. A
customer becomes a consumer if they make a purchase and use the product or service themselves.
(example: old spice)
1.3 Market Orientation (= now what the customers need)
= The organization-wide generation of market intelligence pertaining to current and future customer
needs, dissemination of the intelligence across the departments, and organization-wide
responsiveness to it.
= Organisation-wide belief in delivering customer value
- Understanding consumer needs even better than consumers themselves do
- Creating products that meet existing and latent needs, now or in future
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,Customers cenctricity is also: (example: Amazon Key)
- NOT trying to please ALL customers
- Fulfilling needs in a PROFITABLE way
1.4 Marketing’s Intellectual Roots!!
1. Industial economics influences
- Supply and demand (price, quantity)
- Theories of income distribution, scale of operation, monopoly, competition,
2. Psychological influences
- Consumer behaviour, motivation research, information processing
- Persuasion, consumer personality, customer satisfaction, …
3. Sociological influences
- How groups of people behave: Demographics, class, motivation, customs, culture
- How communication passes through opinion leaders, …
4. Anthropological influences
- Qualitative approaches in researching consumer behaviour
5. Computer science influences
- Digitization, recommendation systems, apps, …
1.5 Differences between Sales and Marketing
- sales = tip of the iceberg
MARKETING SALES
Tends toward long-term satisfaction of Tends towards short-term satisfaction of
customer needs customer needs; part of the value delivery
process as opposed to designing and
development of customer value processes
Tends to greater input into customer design of Tends to lesser input into customer design of
offering (co-creation) offering
Tends to high focus on stimulation of demand Tends to low focus on stimulation of demand;
more focused on meeting existing demand
1.6 Wh at do Marketers do?
The core competencies of the marketer are to generate customer insights,
champion the customer and hence customer, and develop marketing
strategy.
> Technical competencies include:
- risk and reputation management
- brand
- integrated marketing communications
- digital integration
- product management
- monitoring and measuring effectiveness
- customer experience (see Chapter 5); and
- partnership marketing, including managing channel partners
> Marketing within organizations:
= Marketing should develop further in enhancing a firm’s relationships
with its customers and in terms of the power wielded inside companies.
- Marketers do not control all the marketing mix elements.
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,- Marketing is present in all aspects of an organization, since all departments play a role in creating,
delivering, and satisfying customers.
1.7 marketing as Exchange
What can customers and other stakeholders bring of
value, other than purchases?
1.8 The Marketing mix and 4Ps
> Marketing mix: (PPPP)
- Product
- Price
- Place
- Promotion
> 4C’s
- customer
- cost
- communication
- convenience
1.9 The extended Marketing Mix
> Extension 4 to 7 P’s for services:
- Physical evidence: to emphasize that the tangible components of services were strategically
important.
- Process: to emphasize the importance of the service delivery. When processes are standardized, it
is easier to manage customer expectations.
- People: to emphasize the importance of customer service personnel, sometimes experts and often
professionals interacting with the customer. How they interact with customers, and how satisfied
customers are as a result of their experiences, is of strategic importance.
+ the “new” P: Personalization (example: Netflix, Starbucks, …)
1.10 Relationship Marketing, Service-Dominant Logic, and Co-creation
> Relationship marketing:
- Shift from customer acquisition through a transactional manner towards retaining customers long-
term by better management of customer relationships
- Relationships with stakeholders (e.g., suppliers, employees, press, general public)
> Loyal customers:
- Will increase their purchases over time
- Are cheaper to promote to
- Who are happy with their relationship with a company refer it to others
- Are prepared to pay a (small) price premium
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, > Customer relationship management (CRM)
= The process of acquiring detailed information about individual customers and carefully building and
managing customer relationships by delivering superior value.
(vb. Colruyt kaart dat je kan scannen)
- Touchpoints: moment of purchase, contacts with sales teams, payments, surveys, …
> Marketing automation:
= Marketing automation is a category of technology that allows companies to streamline, automate,
and measure marketing tasks and workflows, so they can increase operational efficiency and grow
revenue faster
> Marketing automation VS CRM:
> Selective relationship management
- Customer lifetime value = prediction of all the value a business will derive
from their entire relationship with a customer
- Maximizing profit over customer’s lifetime.
- Losing customer = losing lifetime’s worth of purchases and referrals
> Service-dominant logic:
= Marketing paradigm that sees service as the fundamental basis of exchange (het zelfde maar
andere absis gebruikt)
> Co-creation: (example: Lays)
- Because offerings are inherently service-based, customers become co-creators of the service
experience: the value-in-use of the offering is specified by the customer, often after the sale has
taken place.
- Organizations can use co-creation to differentiate their offerings.The co-creation experience is
about the joint creation of value, in which customers take part in an active dialogue and co-construct
personalized experiences.
1.11 Marketing’s Impact on Society
> Macromarketing (2 positive things):
= The study of the effect that marketing processes, activities, and institutions have on the economy
and society of a nation.
- Marketing plays an important role in developing and transforming society:
- Marketing of non-profits
- Innovations
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