Lecture notes
The Nature of Marketing
- Module
- Marketing
- Institution
- The University Of Manchester (UOM)
Brief introduction to marketing. Describes what customers value in a product. Differenciates between efficiency and effectiveness.
[Show more]
Content preview
Chapter – 1The Nature of Marketing
INTRODUCTION
The modern concept of marketing is far broader than the classical concept which was product
oriented. It focuses on not just the product but also the customers that use it. It aims at providing
customer satisfaction through an integrated effort. The effort that is put in by all the departments
of the organisations, say finance, production and others. It also aims at maintaining an outside-in
focus i.e. focusing on what customers’ value and then innovating on them. Through such an
approach, the modern marketing embarks on achieving all the organizational goals.
CUSTOMER VALUE
It is the difference between ‘perceived benefits’ and ‘perceived sacrifice’. Perceived benefits arise
from the product, its image and other conveying benefits. Perceived sacrifice is associated with the
total cost associated with buying the product. It is not just the monetary cost but also in terms of
time and energy involved in buying. It has four forms – Price, Performance, Emotional and
Relational values.
1) Price value – It is the most powerful motivator as consumers may perceive that it is
cheaper than those offered by its competitors. This has been exploited in the air, food and other
industries. These industries charge for the extra features the consumers want but enjoy a broader
consumer base.
2) Performance value – Customers are concerned with the product’s performance as well.
Functionality and Quality are the two major aspects of performance value. UK electronic product
manufacturer, Dyson produced washing machined with two counter-rotating drums, thus providing
an extra performance feature.
3) Emotional value – Proper marketing strategies and brand image play a significant role in
building up a company’s emotional value. This value helps by creating a bond with the customer
and eventually differentiating it from its competitors. The customers always remain loyal to the
company. This explains why customers like to pay huge premium for luxury brands.
4) Relational value – It is the quality of service a customer receives and is an important
motivator to. Good quality service builds up a high level of trust. The notion of the ‘lifetime value of
the customer’ is recognised by the company of potential sales, profits that come from a repeat
customer. Customer Relationship Management (CRM) is becoming important both in services and
organizational businesses. The role of social media is also important in building relational value.
These values clearly define a company’s Unique Selling Point (USP) or Customer Value Proposition.
These values help a firm to earn profits.
Effectiveness and Efficiency
Efficiency is concerned with inputs and outputs. It produces goods economically i.e. it does things
right. It exploits the potential of offering low prices or offer medium-high prices for greater
profitability.
Effectiveness on the other hand means doing the right things. It implies operating in attractive
markets and making products that consumers want to buy. It helps the firm to survive in the
market.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller BMAN. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £0.00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53068 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now