READINGS WEEK 1
CHAPTER 1
Marketing: the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customer, clients, partners, and
society at large
- The aim is to know and understand the customer so well that the product or service fits
him and sells itself.
Marketeer’s market ten main types of entities: Goods, services, events, experiences, persons,
places, properties, organizations, information, ideas
Needs: the basic human requirements
- Become wants when directed to specific objects that might satisfy the needs.
Demands: wants for a specific product backed by an ability to pay.
Marketeers cannot create needs, they can create wants.
There are five types of needs:
- Stated needs: the customers’ stated wants.
- Real needs: The real qualities and efforts a person needs to develop or utilize that lead
to the results they desire
o the customer wants a car whose operating cost is low.
- Unstated needs: the customers’ expectations (e.g. good service).
- Delight needs: what the customer would like additionally.
- Secret needs: needs the customer keeps for himself (status).
Value proposition: set of benefits that satisfy the needs of customers.
- Intangible but made tangible through an offering from a known source (a brand).
Offering: can be a combination of products, services, information, and experiences.
The marketer uses three kinds of marketing channels to reach the target market:
- Communication channels: deliver and receive messages form target buyers and
include newspapers, radio, internet, etc.
- Distribution channels: help display, sell, or deliver the physical product or service to
the buyer or user.
- Service channels: to carry out transactions with potential buyers (e.g.
warehouses/insurance companies)
Group communication options can be divided into three categories:
- Paid media: all of which allow marketers to show their ad or brand for a fee.
- Owned media: communication channels marketers own.
- Earned media: WOM, buzz or viral marketing methods (voluntarily).
Value: the sum of tangible and intangible benefits and costs.
Customer value triad: combination of quality, service and price (QSP).
, - Value perceptions increase with quality and service but decrease with price.
Marketing environment consists of:
- Task environment: actors engaged in producing, distributing, and promoting the
offering.
- Broad environment: consists of 6 components.
o Demographic: population which includes size and growth rate of populations,
age distribution, ethnic mix, educational levels, and household patterns.
o Economic: all about purchasing power and income.
o Social-cultural: about relationships with ourselves, others, firms, and society.
Core beliefs: beliefs passed form parents to their children.
Secondary beliefs: values more open to change.
Subcultures: groups with shared values and beliefs.
o Natural: all information about the changing environment.
o Technological: fast forwarding with technological environment.
o Political-legal: government agencies and laws.
Marketeers need to pay attention to the trends and developments in these and adjust
their marketing strategies as needed.
There are three transformative forces changing marketing realities
1. Technology: digitalization of society (sharing information as power).
2. Globalization: companies can now take marketing ideas and lessons from one country
and apply them to another.
o Increased competition.
3. Social responsibility: Marketing effects society as a whole, so we must consider the
ethical, environmental, legal, and social context of their activities.
Marketing philosophies that guide a companies’ marketing efforts:
- Production concept: consumers prefer products that are widely available and
inexpensive.
- Product concept: consumers favor products offering the most quality, performance or
innovative features.
- Selling concept: consumers, if left alone, won’t buy enough of the organization’s
products.
- Marketing concept: the job is to find the right product for your customer, instead of
the right customer for your product.
- Holistic marketing concept: everything matters in marketing.
There are four components that characterize the holistic marketing concept:
- Relationship marketing: aims to build mutually satisfying long-term
relationships with stakeholders (customers, employees, marketing
partners, and members of the financial community).
o Ultimate outcome: a marketing network with mutually
profitable business relationships.
- Integrated marketing: occurs when marketers combine marketing activities to create,
communicate, and deliver value for consumers so the whole is perceived as greater
than the sum of its parts.
o Many different marketing activities can create, communicate, and deliver value
, o Marketers should design and implement each marketing activity with all other
activities in mind.
- Internal marketing: task of hiring, training, and motivating able employees who want
to serve customers well.
- Performance marketing: understanding the financial and nonfinancial returns to
business and society from marketing activities and programs
o (e.g. customer satisfaction, product quality, and customer loss rate).
Marketing mix: marketing activities (4P’s – according to the book)
- Product
- Price
- Promotion
- Place.
The modern marketing management’s four P’s:
- People (instead of product): reflects internal marketing and the fact that people are
critical to the marketing success.
- Processes (instead of place): reflects all the creativity, discipline, and structure brought
to the marketing management.
- Programs (instead of promotion): reflects all the firm’s consumer-directed activities.
- Performance (instead of price): reflects the range of possible outcome measures that
have financial and nonfinancial
implications.
Tasks that make up successful marketing
management and marketing leadership:
- Developing and implementing marketing
strategies and plans.
- Capturing marketing insights.
- Connecting with customers
- Building strong brands
- Creating value
- Delivering value
- Communicating value
- Managing the marketing organization for
long term success.
CHAPTER 2
The value creation and delivery have three
phases:
- Choose the value (STP): segmentation, targeting, and positioning.
- Providing the value (4Ps): identifying specific product features, prices and
distribution.
- Communicating the value: choosing communication channels to announce and
promote the product.
Value chain: tool for identifying ways to create more customer value by making use of the
primary and support activities
, Core competency: resources and capabilities that exist of the strategic advantages of a
business. These make up the essence of the business. Has three characteristics:
- It is a source of competitive advantage and makes a significant contribution to
perceived customer benefits.
- It has applications in a wide variety of markets
- It is difficult for competitors to imitate.
Strategic marketing plan: lays out the target markets and the firm’s value proposition, based
on an analysis of the best market opportunities.
Tactical marketing plan: specifies that marketing tactics.
Mission statement: reflects a vision (shared sense of purpose, direction, and opportunity) that
provides direction for the next 10 to 20 years. Good mission statements have 5 characteristics:
1. They focus on a limited number of goals
2. They stress the companies’ major policies and values.
3. They define the major competitive spheres within which the company operate.
4. They take a long-term view.
5. They are short, memorable, and meaningful.
Strategic business unit (SBU) has three characteristics:
- Is a single business, or a collection of related businesses, that can be planned
separately from the rest of the company.
- Has its own set of competitors.
- Has a manager responsible for strategic planning and profit performance, who controls
most of the factors affecting profit.
The purpose of identifying SBU is to develop separate strategies and assign appropriate
funding.
Reviewing opportunities for improving existing businesses (in steps):
1. Market-penetration strategy: company considers whether it could gain more market
share with its current product in their current markets.
2. Market-development strategy: consider whether it can find or develop new markets for
its current products.
3. Product-development strategy: considers whether it can develop new products for its
current markets.
4. Diversification strategy: review opportunities to develop new products for new
products.
A business can increase sales and profits through (value chain).
- Backward integration: acquire one or more of its suppliers to gain more control or
generate more profit.
- Forward integration: acquire some wholesales or retailers.
- Horizontal integration: acquire one or more competitors, provided the government
does not bar the horizontal integration.
Strategic planning: the aim is to shape the companies’ businesses and products, so they yield
the target profits and growth. It takes place at four organizational levels:
- Corporate: design a strategic plan to guide the whole firm and decide on the resource.
- Division: establish a plan covering the allocation of funds.
- Business unit: designs a plan to carries the main strategic plan.
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