Summary: Principles of Marketing, Global Edition, ISBN: 9781292341132 Marketing I (MRKT_1)
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Marketing I (MRKT_1)
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Vrije Universiteit Amsterdam (VU)
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Principles of Marketing
Summary Principles of Marketing, all information needed for the final test is here, everything from the slides, lectures and the book that you need to know. This document is all you need to get a good grade from Marketing 1.
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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Economie en Bedrijfseconomie
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Summary – Marketing
Chapter 1 – Creating Customer Value and Engagement
1.1 - What is Marketing?
Marketing is the process by which
companies engage customers, build
strong relationships and create customer
value in order to capture value from
customers in return. The two goals of
marketing are to attract new customers
by promising superior value and to keep
and to grow current customers by
delivering value and satisfaction.
Marketing must be understood in the
sense of satisfying customer needs.
1.2 - Understanding the Marketplace
and Customer Needs
Companies go to great lengths to learn
about and understand their customers’ needs, wants and demands. This understanding helps them
to design want-satisfying market offerings and build value-laden customer relationships by which
they can capture customer lifetime value and greater share of customer. The result is increased
long-term customer equity for the firm. The five-core customer and marketplace concepts:
1. Customer Needs, Wants and Demands; Human needs are states of felt deprivation, these
are basic part of the human makeup. Wants are the form human needs take as they are
shaped by culture and individual personality. When backed by buying power, wants become
demands. Given their wants and resources people demand products and services with
benefits that add up the most value and satisfaction.
2. Market Offerings (Products, Services and Experiences); Consumers’ needs and wants are
fulfilled through market offerings, some combination of products, services, information or
experiences offered to a market to satisfy a need or want. Market myopia is 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 problem to
solve a consumer problem.
3. Customer Value and Satisfaction; 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. Dissatisfied customers
often switch to competitors and disparage the product to others.
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
consistently delivering superior customer value.
5. Markets; A market is 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.
Companies address needs, wants and demand by putting forth a value proposition, a set of benefits
or values that companies promise to consumers to satisfy their needs. The value proposition is
fulfilled through a market offering, which delivers customer value and satisfaction, resulting in long-
term exchange relationships with customers.
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,1.3 - Designing a Customer Value-Driven Marketing Strategy and Plan
To design a good marketing strategy, the company must first decide whom it will serve. It does this
by dividing the market into segments of customers and selecting which segments it will serve
targeted customers. This is marketing management, the art and science of choosing target markets
and building profitable relationships with them. There are five concepts under which organizations
design and carry out their marketing strategies:
1. Production concept; Idea that consumers will favour products that are available and highly
affordable. Therefore, the organization should focus on improving production and
distribution efficiency and bring cost down.
2. Product concept; Idea that consumers will favour products that offer the most quality,
performance and features. Therefore, the organization should devote its energy to making
continuous product improvements.
3. Selling concept; Idea that consumers will not buy enough of the firm’s product unless the
firm undertakes large-scale selling and promotion effort.
4. Marketing concept; 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. The job is not to find the right customers for your product but to find the
right products for
your customers.
5. Social 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 interest. 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.
Nowadays there is a shift from product-driven marketing towards customer-driven marketing.
1.4 - Managing Customer Relationships
Customer relationship management is the process of engaging customers and building and
maintaining profitable customer relationships by delivering superior customer value and satisfaction.
A customer buys from the firm that offers the highest customer-perceived value, the customer’s
evaluation of the difference between all benefits and all the costs of a market offering relative to
those of competing offers. Customer-engagement marketing aims to make a brand a meaningful
part of consumers’ conversations and lives through direct and continuous customer involvement in
shaping brand conversations, experiences and community. Beyond building brand loyalty and
purchasing, marketers want to create customer brand advocacy, action by which satisfied
customers initiate favourable interactions with others about a brand. Consumer-generate marketing
is 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. In addition to being good at customer relationship management, marketers must also be
good at partner relationship management which is working closely with partners in other company
departments and outside the company to jointly greater value to customers.
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, The customer lifetime value is the value of the entire stream of purchases a customer makes over a
lifetime of patronage. Beyond retaining good customers to capture customer lifetime value, good
customers relationship management can help marketers increase their share of customer, the
portion of the customer’s purchasing that a company gets in its products categories. The aim of
customer relationship management and customer engagement is to produce high customer equity,
the total combined customer lifetime values of all the company’s customers. The aim of customer
relationship managements is to produce high customer equity, the total combined customer
lifetime values of all the company’s customers. The key to building
lasting relationships is the creation of superior customer value and
customer satisfaction, the extent to which a product’s perceives
performance matches a buyer’s expectations. In return for creating
value for targeted customers, the company captures value from
customers in the form of profits and customer equity.
1.5 - The Changing Marketing Landscape
The digital age has created exciting new ways to learn about, engage and relate to individual
customers. As a result, advances in digital social and mobile media have taken the marketing world
by storm. Online, mobile and social media marketing offer exciting opportunities to target customers
more selectively and engage them more deeply. The Internet of Things (IoT) is a global environment
where everything and everyone is digitally connected to everything and everyone else. Digital and
social media marketing is using digital marketing tools such as websites, social media, mobile apps
and ads, online videos, email and blogs to engage consumers anywhere, at any time, via their digital
device. The key is to blend the new digital technologies and approaches with traditional marketing
to create a smoothly integrated marketing strategy and mix.
Chapter 2 – Company and Marketing Strategy
2.1 - Company-Wide Strategic Planning: Defining Marketing’s Role
Each company must find the game plan for long-run survival and growth that makes the most sense
given its specific situation, opportunities, objectives and resources. Strategic planning is the process
of developing and maintaining a strategic fit between the organization’s goals and capabilities and
its changing marketing opportunities.
Strategic planning involves developing a
strategy for long-run survival and growth and
it consist of four steps, as shown in the
picture. The company’s mission should be market oriented, realistic, specific, motivating and
consistent with the market environment. The mission is then transformed into detailed supporting
objectives and goals, which in turn guide decisions about the business portfolio. Then each business
and product unit must develop detailed marketing plans in line with the company-wide plan. Many
companies develop formal mission statements, a statement of the organization’s purpose, like what
it wants to accomplish in the larger environment. Marketing strategies and programs must be
developed to support marketing objectives.
2.2 - Designing the business portfolio
Guided by the company’s mission statement and objectives, management plans its business
portfolio, the collection of businesses and products that make up the company. The firm wants to
produce a business portfolio that best fits its strengths and weaknesses to opportunities in the
environment. For this a portfolio analysis, whereby management evaluates the products and
businesses that make up the company, is required. In this it must analyse and adjust its current
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