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Summary Marketing an Introduction Chapters: 1,2,3,5,6,7,8,9,12,13 | IB Year 1 | Hva
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Chapter 1 Creating Customer Value and EngagementMarketing is the process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value form customers in return.
The marketing process:
Needs states of felt deprivation, this includes basic physical needs for food, clothing, warmth, and
safety: social needs for belonging and affection: and individual needs for knowledge and self-
expression.
Wants the form human needs take as they shaped by culture and individual personality.
Demands, human wants that are backed by buying power
Market offerings, some combination of products, service, information, or experiences offered to a
market to satisfy a need or want.
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. They are so taken with
their products that they focus only on existing wants and lose sight of the underlying customer
needs.
→ They forget that the product is only a tool to fulfill a customer problem/need.
Exchange, the act of obtaining a desired object form someone by offering something in return.
Market, the set of all actual and potential buyers of a product or service.
A Modern Marketing System:
Marketing Management, the art and science of choosing target markets and building profitable
relationships with them.
− Selecting Customer to Serve, (market segmentation, target marketing)
− Choosing a Value Proposition, (differentiate and position itself in the market)
− Marketing Management Orientations, (engaging target customers)
1
,There are 5 alternative concepts under which organizations design and carry out their
marketing strategies:
− Production Concept, the idea that customers will favor products that are available and
highly affordable: therefore, the organization should focus on Improving production and
distribution efficiency.
− Product Concept, the idea that customers will favor products that offer the most quality
performance, and features: therefore, the organization should devote its energy to making
continuous product improvements.
− Selling Concept, the idea that customers will not buy enough of the firm’s products,
unless the firm undertakes a large-scale selling and promotion effort.
− The Marketing Concept, a philosophy in which advertising organizational goals depends
on knowing the needs and wants of the target markets and delivering the desired
satisfactions better than competitors do.
Selling and Marketing Concepts Contrasted
− The Societal Marketing Concept, 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.
Three Considerations Underlying
the Societal Marketing Concept
Customer Relationship Management, the overall process of
building and maintaining profitable customer relationships by delivering superior customer value
and satisfaction.
Partner Relationship Management, working closely with partners in other company departments
and outside the company to jointly bring greater value to customers.
Customer-Perceived Value, the customers evaluation of the difference between all the benefits
and all costs of the market offering relative to those of competing offers.
Customer Life-Time Value, the value of the entire stream of purchases a customer makes over a
lifetime of patronage.
Customer Satisfaction, the extent to which a product’s perceived performance matches a buyer’s
expectations.
2
,Customer-Engagement Marketing, making the brand a meaningful part of consumers’
conversations and lives by fostering direct and continuous customer involvement in shaping
brand conversation, experiences, and community.
Customer-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, the portion/share of the customer’s purchasing that a company gets in its
product categories.
How to Increase the share?
− Firms can offer greater variety to current customers.
− Create programs to cross-sell and up-sell, to market more products and services to
existing customers.
Customer Equity, the total combined customer lifetime values of all the company’s current and
potential customers.
→ In other words, it’s a measure of the future value of the company’s customer
base. The more loyal the customers, the higher the ‘equity’ will be.
Customer Relationship Groups:
The point: different types of customers require
different engagement and relationship
management strategies. The goal is to build
the right relationships with the right customers.
Digital and Social Media Marketing, using digital marketing tools to engage customers anywhere,
at any time, via their digital devices.
3
, Chapter 2 Company and Marketing Strategy
• Partnering to Build Customer Engagement, Value, and Relationships.
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:
A mission statement is a statement of the organization’s purpose - what it wants to accomplish in
the larger environment. A mission statement acts as an invisible hand that guides people in the
organization.
Mission statements should be market oriented and defined in terms of satisfying basic customer
needs.
Business portfolio pertains to the mix of business units and product lines that fit together in a
logical way to provide synergy and competitive advantage for the corporation.
Business portfolio planning involves two steps:
− The company must analyze its currents business portfolio and determine which business
should receive more, less, or no investment.
− It must shape the future portfolio by developing strategies for growth and downsizing.
A portfolio analysis is a process in which management evaluates the products and businesses
that make up the company. The best business portfolio is the one that best fits the company’s
strengths and weaknesses to opportunities in the environment.
The best-known portfolio-planning method is the BCG Growth-Share Matrix.
4
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