This summary includes:
- Chapters: 1 to 3, 6 to 12, 14, 16 of the book: Marketing, An introduction (14th edition)
- Relevant notes from lectures/seminars
(Written in English, in accordance with the book)
Chapter 1 – Defining marketing and the marketing process
Marketing = the process by which companies engage customers, build strong customer relationships
and create customer value in order to capture value from customers in return
The marketing process: creating and capturing customer value
1. Understand 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
Step 1: Understanding the marketplace and customer needs
‘Needs, wants and demands’ -> People have needs (basic, social and individual). People have wants
following needs and shaped by culture and individual personality. People have demands when their
wants are backed by buying power.
Market offerings = some combination of products, services, information, or experiences offered to a
market to satisfy a need or want
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
-> A customer doesn’t NEED a drill, it NEEDS a hole in the wall
Market = the set of all actual and potential buyers of a product or service
Marketing is no longer only being carried out by sellers. Because of our technological process, a lot of
marketing is being done by customers. Customers can influence sellers or other customers.
Market management = the art and science of choosing target markets and building profitable
relationships with them
-> To design a winning marketing strategy, you must answer two questions:
1. What customers will we serve? (market segmentation -> target marketing)
2. How can we serve these customers best? (Differentiation and positioning, Value proposition)
Five different marketing strategy concepts:
1. The production concept
- consumers favour products that are available and highly affordable
- management should focus on improving production and distribution efficiency
Risk: could lead to marketing myopia
2. The product concept
- consumers favour products that offer the most in quality, performance and innovative features
- focus on making continuous product improvements
Risk: can also lead to marketing myopia
3. The selling concept
- consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and
promotion effort
,- usually done with unsought products (life insurance f.e.)
Risk: no focus on building long-term relationships
4. The marketing concept
- customer focus and value are the paths to sales and profits
- “the job is not to find the right customers for your product but to find the right products for your
customers”
Risk: often times people don’t know what they want (Ford: “If I asked people what they wanted they
would have said faster horses”)
5. The societal marketing concept
- wants to think about long-run welfare for customers
- sustainable, socially and environmentally responsible marketing
- ‘shared value’ = focusses on creating economic value in a way that also creates value for society
Three considerations societal marketing:
1. Society (human welfare)
2. Consumers (want satisfaction)
3. Company (profits)
The major marketing mix tools: (4 broad groups, 4 p’s)
1. Product
2. Price
3. Place
4. Promotion
Customer relationship management = the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction
Customer-perceived value = the customer’s evaluation of the difference between all the benefits and
all the costs of a marketing offer and all the costs of a marketing offer relative to those of competing
offers
-> The key is create a marketing offer which the customer perceives as the best value and then
delivering on that expectation to create lasting customer relationships
Customer satisfaction = the extent to which a product’s perceived performance matches a buyer’s
expectations
Customer-engaged marketing = making the brand a meaningful part of consumers’ conservations
and lives by continuous customer involvement in shaping brand conservations, experiences, and
community
Brand advocacy = satisfied customers who initiate favourable interactions with others about the
brand
Consumer-generated marketing = 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
,Share of customer = portion of customers’ purchasing that a company gets in its product categories
Customer equity = the total combined customer lifetime value of all of the company’s customers
4 types of loyalty (Attitude loyalty, Behaviour loyalty):
- (low, low) = No loyalty
- (low, high) = False loyalty -> they buy a lot but not because they like the brand
- (high, low) = Latent loyalty -> they don’t buy a lot (yet) but they are fan of the brand
- (high, high) = Real loyalty
4 types of customers:
1. Strangers (low profitability, low loyalty) = don’t invest in this relationship. Make profit on every
transaction
2. Butterflies (high profitability, low loyalty) = don’t invest in this relationship. Make profit on their
transactions whilst they are around
3. True friends (high profitability, high loyalty) = invest in this relationship. Make them true believers,
who will advertise your company for free
4. Barnacles (low profitability, high loyalty) = don’t invest in this relationship. ‘Fire’ them if you don’t
make any money on their transactions
Customer Lifetime Value (CLV) = Expected customer profits / (1+r)^t
Customer Equity = Sum of all CLV’s
4 major trends that are changing the marketing landscape:
1. The digital age
- social media marketing
- mobile marketing
- big data and artificial intelligence
2. The growth of not-for-profit marketing
3. Rapid globalization
4. The call for sustainable marketing practises
, Chapter 2: Company and marketing strategy
Strategic planning = the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities
Steps in strategic planning:
1. Defining the company mission
Mission statement = statement of the organization’s purpose, what it wants to accomplish in the
larger environment
-> should be market-oriented not product-oriented (products eventually become outdated)
2. Setting company objectives and goals
-> objectives and goals should be defined to help the company fulfil the mission statement
3. Designing the business portfolio (all businesses and products that make up a company)
-> First the company must determine which current businesses should receive more, less or no
investments. Secondly the company must shape the future portfolio by developing strategies for
growth and downsizing.
4. Planning marketing and other functional strategies
Strategic Business Units (SBU) = the key businesses that make up a company
-> Two important dimensions to analyse SBU’s:
- the attractiveness of the SBU’s market or industry
- the strength of the SBU within that market or industry
Firms can market 1 main brand for different products (Individual branding = cheaper and less
effective) or firm can market every single brand they have differently (Family branding = more
expensive and more effective). Or they can do a combination of both.
Marketing planning happens on 4 levels:
- Corporate level
- Division level
- Business unit level
- Product level
Growth-share matrix (developed by Boston Consulting Group):
Horizontal: Relative market share
Vertical: Market growth rate
Four types of SBU’s (market share, market growth):
1. Stars (high, high): need heavy investments to grow, will turn into cash cows eventually
2. Cash cows (high, low): established and successful, needs less investments to keep its market share
3. Question marks (low, high): require a lot of cash to maintain or grow. Can turn into stars or die out
4. Dogs (low, low): may generate enough cash to maintain themselves but are not worth much more
-> disadvantage of using this matrix: focus is on existing products
Four strategies for SBU’s
1. Build its share: invest more
2. Hold its share: invest just enough to keep market share
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