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MarketingLecture one: Introduction (chapter 1)
Marketing
- Marketing: the process by which companies engage customers, built customer relationships and
create customer value in order to capture value from customers in return (creating value)
- Social marketing: use of traditional marketing concepts and tools to encourage behaviour that
creates individual and societal well-being
- Engaging customers and managing profitable customer relationships through
creating/exchanging customer value
- Aim: create value for customers in order to capture value from customers in return
- Goals: attract new customers and keep/grow current customers by delivering value
- Marketing mix: a set of marketing tools that work together to engage customers, satisfy customer
needs and built customer relationships
The concept of value
- Value of a business: economic worth to owners (stock price, asset value)
- Value of a customer: economic worth of a customer to a company (dollar return of first purchase,
dollar return of subsequent purchases, customer lifetime value)
- Personal values: central beliefs about what is good or bad, right or wrong (e.g. a good mother keeps
her child safe from harm)
- Value for a customer: what a buyer perceives they gain from purchasing/using a product or service
- Promotion: selecting value proposition, communication means and content for the right
customers at the right time
The marketing process
1. Understanding 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
Understanding the marketplace and customer needs
Five core customer and marketplace concepts:
1. Customer needs, wants and demands: using data to play into these
- Needs: states of felt deprivation, includes physical, social and individual needs
- Wants: the form needs take as they are shaped by culture and individual personality
- Demands: wants that are backed by buying power
2. Market offerings: some combination of products, services, information or experiences offered to a
market to satisfy a need/want, do not result in ownership
- Market myopia: the mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products
- Smart marketers: look beyond the attributes of products/services they sell
3. Customer value and satisfaction: customers form expectations about the value and satisfaction
various market offerings deliver and buy accordingly
4. Exchanges and relationships: marketing consists of action taken to create, maintain and grow
desirable exchange relationships with target audiences
5. Markets: the set of all actual and potential buyers of a product or service
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,Customer value-driven marketing strategy and plan
- Marketing management: the art and science of choosing target markets and building profitable
relationships with them
1. Deciding on who to serve: divide the market into segments of customers and select which
segments it will go after
2. Deciding how to serve targeted customers (value proposition): choosing the set of
benefits it promises to deliver to customers to satisfy their needs
- Production concept: the idea that customers will value products that are available and highly
affordable → focus on improving production and efficiency
- Product concept: the idea that consumers will favour products that offer the most quality →
focus on making continuous product improvements
- Selling concept: idea that customers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort (inside-out view)
- Marketing concept: philosophy in which achieving organizational goals depends on knowing the
needs and wants of target markets and to satisfy better than competitors (outside-in view)
- Societal market concept: idea that a firm’s marketing decisions should consider consumers’ wants,
the company requirements and society’s and customers’ long-run interests
Customer relationship management, relationship building blocks
- Customer relationship management: the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction
- Aim: create customer satisfaction and delight
- Customer value: customer’s evaluation of the difference between all benefits and costs of a
marketing offer to those of competitors
- Customer satisfaction: the extent to which a product’s perceived performance matches a
buyer’s expectations
Customer relationship levels and tools
- Customer-engagement marketing: making the brand a meaningful part of consumers’
conversations/lives by fostering direct customer involvement in shaping brand conversations
- Customer brand advocacy: actions by which satisfied customers initiate favourable interactions
with others about a brand
- practice marketing by attraction: creating market offerings that engage consumers rather
than interrupt them
- Consumer-generated marketing: brand exchanges created by consumers by which consumers are
playing an increasing role in shaping their own brand experience
- Can be a time-consuming and costly process
- Partner relationship management: working closely with partners in other firm departments and
outside the company to jointly bring greater value to customers
Capturing value from customers
- Customer lifetime value: the value of the entire stream of purchases a customer makes over a
lifetime of patronage
- Share of customer: the portion of the customer’s purchasing that a company gets
- Customer equity: the total combined customer lifetime values of all of the firm’s customers
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, Lecture two: The company and environment (chapters 3 & 5)
The marketing environment
- Marketing environment: actors and forces outside marketing that affect marketing management’s
ability to build and maintain successful relationships with target customers
- Microenvironment: actors close to the company that affects its ability to service its
customers (company, suppliers, marketing intermediaries (resellers), competitors, public)
- Company: marketing managers have to work closely with all internal departments
- Marketing intermediaries: firms that help a company promote and sell its goods
- Competitors: provide greater customer value/satisfaction than a competitor
- Public: any group that has an interest/impact on a firm’s ability to achieve objectives
- Customers: aim of value delivery network is engaging target customers
- Macroenvironment: forces outside the firm and how the firm matches those, affect the
microenvironment
Major forces in a firm’s macroenvironment
- Demographic environment: analyze changing age and family structure, geographic population
shifts, educational characteristics and population diversity
- Natural environment: the physical environment and natural resources that are needed as inputs by
marketers or that are affected by marketing activities
- Trends: raw material shortages, increased pollution and increased government intervention
- Environmental sustainability: meeting present needs without compromising future needs
- Economic environment: economic factors affecting consumer purchasing power and spending
patterns
- Technological environment: forces that create new technologies, creating new products and market
opportunities (most dramatic force currently shaping)
- Should be watched closely: companies that do not keep up with technological
advancements will have outdated products/services
- Political environment: laws, government agencies and pressure groups that influence and limit
various organizations and individuals in a given society
- Enactment of business legislation: protect firms from each other, protect consumers from
unfair business practices and protect interest of society against unstrained business behaviour
- Cause-related marketing: lets firms ‘do well by doing good’ by linking purchases of a firm’s
products with benefiting worthwhile causes
- Critics: more a strategy for selling than for giving, it is cause-exploitative marketing
- Cultural environment: institutions and other forces that affect society’s basic values, perceptions,
preferences and behaviours
- Core beliefs and values: passed on from parents to children
- Secondary beliefs and values: more open to change
Responding to the marketing environment
- Passively: the marketing environment is an uncontrollable element to which must be reacted/adapted
- Proactive: develop strategies to change the environment, take aggressive actions to affect the publics
and forces in their marketing environment
- Whenever possible, smart marketing managers take a proactive rather than a reactive approach to the
marketing environment
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