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Marketing Fundamentals Final Exam Notes
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CHAPTER 1- WHAT IS MARKETINGMarketing: Is a process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.
UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS
Needs: States of felt deprivation
Wants: Form human needs take as they are shaped by cultural and individual personality
Demands: Human wants that are backed by buying power
Marketing cannot create needs, but wants
MASLOW THEORY OF NEEDS:
Marketing offers: Combination of product, services, information or experiences, offered to a
market to satisfy a need or want.
A product is anything that can be offered to a market to satisfy a need or want. It might be:
A Good- physical; food
A Service- intangible; education
A Mixture of the two; restaurant
MARKETING TERMS
Exchange: Act of obtaining a desired object from someone by offering something in return.
Marketing actions try to create, maintain and grow desirable exchange relationships
Transaction: A trade of value between two parties
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,Market: The entire set of actual or potential people or organizations who might will buy or obtain
your product offering
A Market is a set of actual and potential buyers:
-Search of products
-Interact with companies to obtain information
-Make purchases
Marketing is about building and maintaining exchange relationship with target audiences,
Selecting Customers to Serve: As a marketer, you´re not always trying to increase demand.
Some marketing jobs involve demarketing or reducing or shifting demand for a particular product
or service.
Value: Difference between the value of the customer gains from owing and using a product and
the cost of obtaining it.
The company must also decide how it will serve targeted customers- how it will differentiate
and position itself in the marketplace.
Consumer Satisfaction: Depends on how well the product lives up to the customer expectations.
Perception: A satisfied customer is one who perceives your product to be of value and to have
satisfied the need felt
A brand´s value proposition: Set of benefits or values it promises to deliver to customer
expectations.
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.
MARKETING PROCESS
Modern Marketing System
Simple Marketing System
DESIGNING A CUSTOMER VALUE-DRIVEN MARKETING STRATEGY
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,A brand´s value proposition: set of benefits or values it promises to deliver to customers to satisfy
their needs.
MARKETING MANAGEMENT
Marketing management: Art and science of choosing target markets and building profitable
relationships with them:
-What customers will we serve (target market)
-Hoe can we best serve these customers (value proposition)
Orientations: There are 5 concepts under which organizations design and carry out their
marketing strategies.
1. Production: The idea that consumers will favour products that are available and highly
affordable; therefore, the organization should focus on improving production and
distribution efficiency.
When demand is high, keep producing enough of the item to reduce the cost of producing it.
Sometimes this approach is effective, and even today some things are most effectively marketed
this way; but generally, it´s not the best way to sell something.
2. Product: The 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.
Consumers will favour products that offer the most quality performance and features. But,
defining your business by the product you sell rather than by what your customer need is the
classic “Better Mousetrap”.
3. Selling: The idea that consumers will not buy enough of the firm’s products unless the
firm undertakes a large-scale
selling and promotion effort.
Companies must undertake a large-
scale sales and promotion effort in
order to make their consumers buy.
4. Marketing: 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.
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, Determining needs and want of
target markets delivering the
desired satisfaction. Customer
focus and value are path to sales
and profit.
5. Societal Marketing: The 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.
Marketing should also improve the consumer´s and
society´s well-being. Marketing today includes the
obligation to examine societal issues as well.
CUSTOMER RELATIONSHIP MANAGEMENT
CRM: Process of building and maintaining profitable customer relationships by delivering
superior customer value and satisfaction.
Customer lifetime value: Value of total purchases that a customer would make over a lifetime
of patronage.
Customer perceived value: The difference between total customer value and total customer cost.
Attracting and retaining customers can be a difficult task. Customers often face a bewildering
array of products and services from which to choose. A customer buys from the firm that offers
the highest customer-perceived value. Importantly, customers often do not judge values and costs
“accurately” or “objectively.” They act on perceived value. To some consumers, value might
mean sensible products at affordable prices. To other consumers, however, value might mean
paying more to get more
Customer satisfaction: Extend to which a product´s perceived performance matched a buyer´s
expectations.
Outstanding marketing companies go out of their way to keep important custom- ers satisfied.
Most studies show that higher levels of customer satisfaction lead to greater customer loyalty,
which in turn results in better company performance. Companies aim to delight customers by
promising only what they can deliver and then delivering more than they promise. Delighted
customers not only make repeat purchases but also become willing marketing partners and
“customer evangelists” who spread the word about their good experiences to others.
Share of customer: Share of the customer purchasing in their product categories.
BUILDING CUSTOMER RELATIONSHIPS
Customer equity: Total combined customer lifetime values of all company’s customers.
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