Summary of the course of International Marketing taught in the BSC of International Business. A detailed summary of the 18th edition of the book Principles of Marketing by Gary Armstrong and Philip Kotler. A detailed summary of the whole course including figures, definitions, and examples. The summ...
Marketing summary Principles of Marketing 18th edition
Marketing Management summary of the entire course
Summary: Principles of Marketing 18e Global Edition - Marketing (MAN-BCU2008)
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Rijksuniversiteit Groningen (RuG)
International Business
International Marketing For IB (EBP661C05)
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CHAPTER 1: MARKETING - CREATING CUSTOMER VALUE AND ENGAGEMENT
Today’s successful companies (e.g. Emirates) have one thing in common: they are strongly customer
focused and heavily committed to marketing. These companies share a passion for satisfying customer
needs in well-defined target markets. They motivate everyone in the organization to help build lasting
customer relationships based on creating value.
Due to dramatic technological advances and deep economic, social, and environmental changes,
customer relationships and value are now especially important.
WHAT IS MARKETING?
Marketing is engaging customers and managing profitable customer relationships.
- The goal is to attract new customers by promising superior value and to keep and grow current
customers by delivering value and satisfaction.
- Sound marketing is critical to the success of every organization; large for-profit firms (Coca-Cola,
Microsoft) use marketing as well as non-for-profit organization (colleges, hospitals, museums)
- New marketing approaches don’t just blast out messages to the masses but they reach you
directly, personally, and interactively with the aim of becoming part of your life and to enrich
your experiences with brands → they want to help you live their brands
Marketing: the process by which companies engage customers, build strong customer relationships, and
create value in order to capture value from customers in return.
● Not “telling and selling” but “satisfying customer needs”
● “The aim of marketing is to make selling unnecessary”
● Selling and advertising are only part of a larger marketing mix
● It involves building profitable, value-laden exchange relationships with customers
Marketing process
In steps 1-4, companies work to understand consumers, create customer value, and build strong
customer relationships. In step 5, companies reap the rewards of creating superior customer value.
UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS (step 1)
Customer needs, wants, and demands
➔ Needs: states of felt deprivation which include basic physical needs (food, clothing, warmth, and
safety), social needs (belonging and affection), and individual needs (self-expression and
knowledge)
➔ Wants: the form human needs take as they are shaped by culture and individual personality
, ◆ These are shaped by one’s society and are described in terms of objects that will satisfy
those needs → an American needs food but wants a Big Mac and fries
➔ Demands: human wants that are backed by buying power
◆ Given their wants and resources, people demand products and services with benefits
that add up to the most value and satisfaction
All levels of a company stay close to customers to understand their needs, wants, and demands.
Market offerings - products, services, and experiences
Consumer’s needs and wants are fulfilled through market offerings; some combination of products,
services, information, or experiences offered to a market to satisfy a need or want.
● Market offerings include physical products, services (banking, airline, hotel), and other entities
(persons, places, organizations, information, and ideas)
Marketing myopia refers to the mistake of paying more attention to specific products a company offers
than to the benefits and experiences produced by these products.
● They focus only on existing wants and lose sight of underlying customer needs
● They forget that a product is only a tool to solve a consumer problem
● These sellers will have trouble if a new product comes along that services the customer’s need
better or less expensively - the customer will have the same need but will want the new product
● Smart marketers go beyond the attributes of the products and create brand experiences
Customer value and satisfaction
Customers form expectations about the value and satisfaction that various market offerings will deliver
and buy accordingly.
➔ Satisfied customers buy again and tell others about their good experiences
➔ Dissatisfied customers often switch to competitors and disparage the product to others
Marketers therefore must be careful to set the right level of expectations:
➔ If expectations are too low, they may satisfy those who buy but fail to attract enough buyers
➔ If expectations are too high, buyers will be disappointed
Customer value and customer satisfaction are key building blocks for developing and managing
customer relationships.
Exchanges and relationships
Exchange: the act of obtaining a desired object from someone by offering something in return.
● Marketing occurs when people decide to satisfy their needs and wants through exchanges
● The marketer tries to bring about a response (more than simply buying) to some market offering
● Marketing consists of actions taken to create, maintain, and grow desirable exchange
relationships with target audiences involving a product, service, idea, or other object
Markets: the set of actual and potential buyers of a product or service
● Marketing means managing markets to bring about profitable customer relationships. This takes
work and involves activities such as consumer research, communication, distribution, pricing...
● Both sellers and buyers carry out marketing - technology has empowered consumers and has
made marketing a truly two-way affair
, ○ Sellers search for and engage buyers, identify their needs, design good market offerings,
set prices for them, promote them, and store and deliver them
○ Consumers market when they search for products, interact with companies, and make
their purchases
● As a result, in addition to customer relationship management, marketers must also deal with
customer-managed relationships → by no longer only asking “How can we influence our
customers?” but also “How can our customers influence us?” and “How can our customers
influence each other”
DESIGNING A CUSTOMER-VALUE DRIVEN MARKETING STRATEGY AND PLAN
Customer value - driven marketing strategy (step 2)
Once a company understands consumers and the marketplace, marketing management defined as the
art and science of choosing target markets and building profitable relationships with them, designs a
customer value-driven marketing strategy by answering two questions:
1. What customers will we serve (what’s our target market)?
The company does this by dividing the market into segments of customers (market segmentation) and
selecting which segments it will go after (target marketing).
● The goal is not to serve as many customers as possible but to select only customers that it can
serve well and profitably
● Marketing management is customer management and demand management
2. How can we serve these customers best (what’s our value proposition)?
The company must decide how it will differentiate and position itself in the marketplace.
This is done through a brand’s value proposition is the set of benefits or values it promises to deliver to
consumers to satisfy their needs. Through this a company answers the customer’s question of “Why
should I buy your brand rather than a competitor’s?”.
Marketing management orientations
When designing strategies, the interests of customers, the organization, and society often conflict.
Five alternative concepts under which organizations design and carry out their marketing strategies:
1. Production concept: idea that consumers will favor products that are available and highly
affordable; so the organization should focus on improving production and distribution efficiency
a. Although useful in some situations, it can lead to marketing myopia where companies
focus too narrowly on their own operations losing sight of the real objective
2. Product concept: idea that consumers will favor products that offer the most quality,
performance, and features; so the organization should devote its energy to making continuous
product improvements
a. Focusing only on the company’s products can also lead to marketing myopia
3. Selling concept: idea that consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort
a. Commonly used with unsought goods which are those that buyers do not normally think
of buying, such as life insurance or blood donations
, b. Risks: it focuses on creating sales transactions rather than on building long-term,
profitable customer relationships, aim is often to sell what the company makes rather
than to make what the market wants, assumes customers are coaxed into buying the
product and if they don’t like it, they will forget their disappointment and buy it later
4. Marketing concept: 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
a. Customer focus and value are the paths to sales and profits
b. It is a customer-centred sense-and-respond philosophy rather than product centered
make-and-sell philosophy → find the right product for customer
5. Societal marketing concept: 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
a. Marketing strategy should deliver value to customers in a way that maintains or
improves both the consumer’s and society’s well-being
b. It calls for sustainable, socially and environmentally responsible marketing that meets
present needs while also preserving the ability of future generations to meet their needs
c. The concept of shared value recognizes that societal needs define markets
Preparing an integrated marketing plan and program (step 3)
An integrated marketing program actually delivers the intended value to target customers.
● It builds customer relationships by transforming the marketing strategy into action
● Consists of the firm’s marketing mix, these tools are classified into groups called the four Ps:
○ Product: creation of a need-satisfying market offering to deliver on its value proposition
○ Price: how much it will charge for the offering
○ Place: how it will make the offering available to consumers
○ Promotion: must engage target consumers, communicate about the offering, and
persuade consumers of the offer’s merits
● These four tools must be blended into a comprehensive integrated marketing program that
communicates and delivers the indeed value to chosen customers
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