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marketing I summary VU
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Summary of the course marketing I, given at the Vu in Amsterdam in your 1st year.
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MARKETING FOR E&BE | Summary (RUG)
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Samenvatting Principles of Marketing, ISBN: 9781292220178
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Marketing Fundamentals Notes
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Marketing 1 summaryLecture 1
What is marketing?
4 P’s: product, place, price, promotion.
Marketing is engaging customers and managing profitable customer relationships.
Marketing is an organizational function and a set of processes for creating, communicating and
delivering value to customers, and for managing customer relationships in ways that benefit the
organization and its stakeholders.
Understand the marketplace and customer needs and wants.
Design a customer value-driven marketing strategy.
Construct an integrated marketing program that delivers superior value.
Engage customers, build profitable relationships and create customer delight.
Capture value from customers to create profits and customer equity.
The 5 core marketplace concepts:
- Customer needs, wants and demands.
- Market offerings.
- Customer value and satisfaction.
- Exchange.
- Markets.
Needs = states of felt deprivation.
Wants = shaped by culture and personality.
Demands = willing and able to buy.
Market offerings = products and services, experiences.
Exchange is the act of obtaining a desired object from someone by offering something in return.
Marketing actions try to create, maintain and grow desirable exchange relationships.
A market is a set of actual and potential buyers. Consumers enter a market when they:
- Search for products.
- Interact with companies to obtain information.
- Make purchases.
Marketing myopia is management’s failure to recognize the scope of its business. To avoid marketing
myopia, companies must broadly define organizational goals oriented toward consumer needs
(rather than products).
The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand
the customer so well that the product or service fits him and sells itself.
Luxury products People do not buy the ‘product’. They buy lifestyle and self-expression, success
and status, memories, hopes, and dreams.
,Value proposition = the whole cluster of benefits a company promises to deliver.
Marketing management is the art and science of choosing target markets and building profitable
relationships with them.
What customers (segment) will we serve (target market)?
How can we best serve these customers (value proposition – positioning – differentiation)?
A brand’s value proposition is the set of benefits or values it promises to deliver to costumers to
satisfy their needs.
Production concept + Product concept + Selling concept + Marketing concept
= Societal marketing concept.
Starting point Focus Means Ends
The selling Factory Existing products Selling and Profits through sales
concept promoting volume
The marketing Market Customer needs Integrated Profits through customer
concepts marketing satisfaction
Integrated marketing program: a comprehensive plan that communicates and delivers intended
value.
Customer relationship management: the overall process of building and maintain profitable
customer relationships by delivering superior customer value and satisfaction.
Relationship building blocks
- Customer-perceived value:
The difference between total customer perceived benefits and customer cost.
- Customer satisfaction:
The extent to which perceived performance matches a buyer’s expectations.
Customer lifetime value = the value of the entire stream of purchases that the customer would make
over a lifetime of patronage.
Customer equity = the total combined customer lifetime values of all of the company’s customers.
Different types of customers require different engagement and relationship management strategies.
,Lecture 2
Strategic planning = the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities, and its changing marketing opportunities.
Corporate level Business unit, product and market level
planning
Defining setting designing
marketing
the company the
and other
company objectives business
functional
mission and goals portfolio
strategies
The mission statement is the organization’s purpose; what it wants to accomplish in the larger
environment. A mission statement should:
- Not be myopic in product terms.
- Be meaningful and specific.
- Be motivating.
- Emphasize the company’s strengths.
- Contain specific workable guidelines.
- Not be stated as making sales or profits.
The business portfolio is the collection of businesses and products that make up the company.
Portfolio analysis is a major activity in strategic planning whereby management evaluates the
products and business that make up the company.
Strategic business units (SBU) can be a:
Company division.
Product line within a division.
Single product or brand.
Analyzing the current business portfolio:
Identify strategic business units (SBUs).
Assess the attractiveness of its various SBUs.
Decide how much support each SBU deserves.
BCG growth share matrix
Problems with matrix approaches:
- Difficulty in defining SBUs and measuring market
share and growth.
- Time consuming.
- Expensive.
- Focus on current businesses, not future planning.
Existing products New products
Existing markets Market penetration Product development
New markets Market development Diversification
,Downsizing is when a company must prune, harvest, or divest businesses that are unprofitable or
that no longer fit the strategy.
Partnering with other company departments.
Value chain is a series of departments that carry out value creating activities to design, produce,
market, deliver, and support a firm’s products.
Partnering with others in the marketing system.
Value delivery network is made up of the company, suppliers, distributors, and ultimately customers
who partner with each other to improve performance of the entire system.
Market segmentation is the division of a market into distinct groups of buyers who have different
needs, characteristics, or behaviors and who might require separate products or marketing mixes.
Market segment is a group of consumers who respond in a similar way to a given set of marketing
efforts.
The process of evaluating each market segment’s attractiveness and selecting one or more segments
to enter is called market targeting.
Market positioning is the arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers.
Differentiation begins with the positioning process:
Segmenting Targeting Positioning
Acceptable Affordable
Managing the marketing effort – marketing analysis.
SWOT analysis
Positive Negative
Internal Strengths: Weaknesses:
Internal capabilities that help the Internal limitations that may interfere with a
company reach its objectives. company’s ability to reach its objectives
Externa Opportunities: Threats:
l External factors that the company may Current and emerging factors that may
be able to exploit to its advantage. challenge the company’s performance.
,Market planning – parts of a marketing plan
Executive summary.
Marketing situation.
Threats and opportunities.
Objectives and issues.
Marketing strategy.
Action programs.
Budgets.
Controls.
Marketing implementation:
Turning marketing strategies and plans into marketing actions to accomplish strategic marketing
objectives.
Addresses who, where, when and how.
Lecture 3
A company’s marketing environment
The marketing environment includes the actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with target customers.
1. Microenvironment consists of the actors close to the company that affect its ability to serve
its customers - the company, suppliers, marketing intermediaries, customer markets,
competitors, and publics.
2. Macroenvironment consists of the larger societal forces that affect the microenvironment –
demographic, economic, natural, technological, political and cultural forces.
Microenvironment
- The company.
Other company groups are taken into account (Finance, purchasing, top management etc.).
- Suppliers.
Provide the resources to produce goods and services. They treat as partners to provide
customer value.
- Marketing intermediaries.
Firms that help the company to promote, sell and distribute its goods to final buyers.
Resellers, Marketing services agencies, financial intermediaries, physical distribution firms
- Competitors.
Firms must gain strategic advantage by positioning their offerings strongly against
competitors’ offerings in the minds of consumers.
- Publics.
Any group that has an actual or potential interest in or impact on an organization’s ability to
achieve its objectives.
- Customers.
Consumer markets, business markets, reseller markets, government markets, international
markets.
Macroenvironment
1) Demographic environment
- Demography is the study of human populations.
- Demographic environment involves people, and people make up markets.
- Demographic trends include changing age and family structures, geographic population
shifts, educational characteristics, and population diversity.
, - General marketing is important in segmenting people by lifestyle or life stage instead of age.
- Demographic trends: changing in family or in the workforce. Geographic shifts in population:
change in where people work (telecommunicating, home office).
- Markets are becoming more diverse: international, national, ethnicity, gender, disabled.
2) Economic environment
Changes in consumer spending
- Value marketing involves offering financially cautious buyers greater value – the right
combination of quality and service at a fair price.
- Income distribution: over the past several decades, the rich have grown richer, the middle
class has shrunk and the poor have remained poor.
3) The natural environment
= the physical environment and the natural resources that are needed as inputs by marketers or that
are affected by marketing activities.
Trends in natural environment: Growing shortages of raw materials, increased pollution, increased
government intervention, and developing strategies that support environmental sustainability.
Environmental sustainability involves developing strategies and practices that create a world
economy that the planet can support indefinitely.
4) Technological environment
- Most dramatic force in changing the marketplace.
- New products, opportunities.
- Concern for the safety of new products.
5) Political and social environment
Legislation regulating business is intended to protect: companies from each other, consumers from
unfair business practices, and the interests of society against unrestrained business behavior.
6) Cultural environment
- The cultural environment consists of institutions and other forces that affect a society’s basic
values, perceptions and behaviors.
- Core beliefs and values are persistent and are passed on from parents to children and are
reinforced by schools, churches, businesses, and government.
- Secondary beliefs and values are more open to change and include people’s view of
themselves, others, organizations, society, nature and the universe.
- Major cultural values of a society are expressed in the way people view:
Themselves (themselves vs. others), society (patriots vs. reformers), nature (harmony vs.
master it, finite and fragile), universe (religion, spirituality).
Views on responding to the marketing environment:
Proactive Reactive
Take aggresive actions Watch and react to
to affect forces in the forces in the
environment. environment.
Lecture 4
, Customer insights are fresh marketing information-based understandings of costumers and the
marketplace that become the basis for creating customer value, engagement, and relationships.
Managing marketing information
Companies are forming customer insights teams.
- Include all company functional areas.
- Collect information from a wide variety of sources.
- Use insights to create more value for their customers.
Marketing information system (MIS) refers to the people and procedures dedicated to assessing
information needs, developing the needed information, and helping decision makers to use the
information to generate and validate actionable customer and market insights.
Marketers obtain information from:
Internal data
Consumer & market information from data sources within company network.
Marketing intelligence
Systematic collection & analysis of publicly available information about consumers, competitors,
marketplace.
Marketing research
Systematic design, collection, analysis and reporting of data relevant to a specific marketing
situation.
Marketing research process:
Problem & Interpreting
Developing the Implementation
research and reporting
research plan of research plan
objectives results
- Exploratory - Primary data. - Collecting the - Interpret findings
Research - Secondary data. Information - Draw conclusions
- Descriptive research - Processing - Report to management
- Causal research - Analyzing
Secondary data consists of information that already exists, having been collected for another
purpose.
Gathering secondary data
Advantages:
Lower cost
Obtained quickly
Cannot collect otherwise
Disadvantages – data may not be:
Relevant, accurate
Current
Impartial
Primary data collection
Research approaches
Observational research, Ethnographic research, Survey research, Experimental research.
Contact methods
Mail/telephone, focus group, online marketing research, online behavior tracking.
Sampling plan
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