MARKETING MIDTERM SUMMARY
Week 1 - Chapters summary
Chapter 1 - Scope of Marketing for New Realities
The value of marketing
- Business functions won’t matter without su cient demand for products and services so the
rm can make pro t
- Financial success often depends on marketing ability
- Successful marketing builds demand for products and service which in turn creates jobs
- Many companies have a chief marketing o cer (CMO)
- Marketers must choose features, prices, and markets and decide how much to spend on
advertising, sales, and online and mobile marketing
- Skillful marketing is a never-ending pursuit, those that fail to carefully monitor their customers
and competitors continuously improve their value o erings and marketing strategies or satisfy
their employees, stockholders, suppliers and channel partners in the process
The scope of marketing
- What is marketing?
- About identifying and meeting human and social needs (meeting needs pro tably)
- Marketing: activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging o erings that have value for customers, clients, partners, and society at
large (AMA, 2013)
- Marketing management: art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and communicating superior customer
value
- Selling is not the most important part of marketing, the aim is to know and understand the
customer so well that the product or service ts him and sells itself (Peter Drucker)
- Ideally marketing should result in a customer who is ready to buy
- What is marketed?
- 10 main types of entities
- Goods: physical goods, bulk of most countries’ production and marketing e orts
- Services: many market o erings mix goods and services
- Events: time-based events
- Experiences: by orchestrating several services and goods a company can create, stage, and
market experiences
- Persons: people becoming brands, self-branding
- Places: cities, states, regions, and whole nations compete to attract tourists, residents,
factories, and company headquarters
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, - Properties: intangible rights of ownership to either real property (real estate) or nancial
property (stocks and bonds)
- Organizations: museums, corporations and non-pro ts use marketing to boost their public
images and compete for audiences and funds
- Information: essentially what books, school and universities produce, market and distribute
- Ideas: every market o ering includes a basic idea
- Who markets?
- Marketer: someone who seeks a response from another party (prospect), if two parties are
seeking to sell something to each other both are called marketers
- Increasingly marketing is not done only by marketing department, marketers now must
properly manage all possible touch points
- Interdepartmental teamwork needed
- What is a market?
- Traditionally: market as physical place where buyers and sellers gather to buy and sell goods
- Economists: market as collection of buyers and sellers who transact over a particular
product or product class
- Marketers: market described as customer groups
- Key customer markets: consumer, business, global and nonpro t
- Also e.g. product markets (shoe market), geographic markets (the Chinese market),
demographic markets (the millennium) etc.
- Sellers and buyers are connected by four ows
- Sellers send goods and services and
communications such as ads to the market,
in return they receive money and information
such as customer attitudes and sales data
- Exchange of money from buyers for goods
and services from sellers
- Exchange of information between buyers and
sellers
Core marekting concepts
- Needs, wants, and demands
- Needs: basic human requirements such as air, food, water, clothing, and shelter; strong
needs for recreation, education, and entertainment
- Wants: needs directed to speci c objects that might satisfy the need (e.g. a person needs
food but may want to buy a pizza), wants are shaped by society
- Demands: wants for speci c products backed by an ability to pay
- Companies must measure not only how many people want their product but also how many
are willing and able to buy it
- Marketers do not create needs (criticism that marketers get people to buy things they don’t
want), marketers promote an idea as satisfaction of one’s need but do not create that need
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, - Some customers have needs of which they are not fully conscious or that they cannot
articulate, distinguish ve types of needs
- Stated needs (customer wants and inexpensive car), real needs (customer wants a car
whose operating cost not initial price is low), unstated needs (customer expects good
service), delight needs (customer would like seller to include a GPS system), secret needs
(customer wants friends to see them as savvy customer)
- Responding only to the stated need may shortchange the customer
- Target markets, positioning, and segmentation
- Marketers identify distinct segments of buyers by identifying demographic, psychographic,
and behavioral di erences between them, then decide which segment/s present the greater
opportunities
- For each target market the company develops a market o ering that it positions in target
buyers’ mind as delivering some key bene ts
- O erings and brands
- Value proposition: set of bene ts that satisfy customer needs, is made physical by an
o ering which can be a combination of products, services, information, and experiences
- Brand as an o ering from a known source, companies strive to build a brand image with
strong, favorable, and unique brand associations
- Marketing channels
- Communication channels: deliver and receive messages from target buyers, e.g. magazines,
radio, television, billboards, etc.
- Distribution channels: help display, sell, or deliver the physical product or service to the buyer
or user, e.g. direct via mail, phone, or internet or indirect via distributors and retailers
- Service channels: to carry out transactions with potential buyers, e.g. warehouses, banks,
transportation companies, insurance companies, etc.
- Paid, owned, and earned media
- Communication options for interacting with customers
- Paid media: allows marketers to show their ad or brand for a fee, e.g. TV ad
- Owned media: communication channels marketers own, e.g. company Facebook page
- Earned media: outsiders who voluntarily communicate something about the brand
- Impressions and engagement
- Three screens or means to reach consumers: TV, Internet, mobile
- Impressions: occur when consumers view a communication, useful metric for tracking the
scope or breadth of a communication’s reach but don’t provide any insight into the results of
viewing the communication
- Engagement: extent of a customer’s attention and active involvement with a communication,
more likely to create value for the company, measured for example with likes on Facebook
- Value and satisfaction
- Value: sum of tangible and intangible bene ts and costs, combination of quality, service and
price (customer value triad), value perceptions increase with quality and service and
decrease with price
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, - Satisfaction: person’s judgement of a product’s perceived performance in relationship to
expectations, if expectations are not met customer is disappointed, if they are met customer
is satis ed, if it exceeds them the customer is delighted
- Supply chain
- Longer channel stretching from raw materials to components to nished products to nal
buyers
- Each company in the chain captures only a certain percentage of the total value generated
- Competition
- Includes all actual and potential rival o erings and substitutes a buyer might consider
- Marketing environment
- Consists of task environment and broad environment
- Task environment: includes actors engaged in producing, distributing, and promoting the
o ering, i.e. company, suppliers, distributors, dealers, target customers
- Broad environment: consists of demographic, economic, social-cultural, natural,
technological, and political-legal environment; marketers must pay close attention to the
trends and developments in these and adjust their marketing strategies as needed
The new marketing realities
- New transformative forces have dramatically changed the marketplace
- Technology
- Pace of change and scale of technological achievement can be staggering
- Rapid rise of e-commerce
- Brand marketers must enhance their digital balance sheets
- Sharing information is power
- Globalization
- World has become a smaller place
- New transportation, shipping, and communication technologies made it easier to get to know
the rest of the world, to travel, to buy and sell anywhere
- Has made countries increasingly multicultural
- Companies can take marketing ideas and lessons from one country and apply them to
another
- Social responsibility
- Companies elevated the role of corporate social responsibility
- Marketers must. Insider the ethical, environmental, legal and social context of their activities
as marketing’s e ects extend to society as a whole
- These three transformative forces that have dramatically changed the marketplace provided
consumers and companies with new capabilities, channels of distribution have changed
- New consumer capabilities: can use the Internet as powerful information and purchasing aid;
can search, communicate and purchase on the move; can share opinions and express loyalty
on social media; can actively interact with companies; can reject marketing found to be
inappropriate
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