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Summary of Marketing for BA1 Business Economics at the VUB.
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MARKETING BUSINESS ECONOMICS IChapter 1: Marketing: Creating customer value and -engagement
Learning objectives chapter 1:
1. To define marketing and understand steps in the marketing process
2. To understand the importance of understanding the marketplace and customer needs
3. To identify key elements of a customer-value driven marketing strategy
4. To discuss customer relationship management and what it entails for both customers as well
as organizations
5. To be aware of major trends in the marketing landscape
Agenda:
1. What is marketing?
2. The marketplace and customer needs
3. A customer value-driven marketing strategy
4. An integrated marketing plan
5. Engaging customer and managing customer relationships
6. Capturing value from customers
7. The changing marketing landscape
1.1. What is marketing?
Marketing
= marketing is the process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return
- Marketing is… “the management process of anticipating, identifying and satisfying customer
requirements profitably” (The Chartered Institute of Marketing, 2001)
- Empirical research has demonstrated that:
Companies that use strategic marketing planning, perform better financially.
- What is marketing not?
Going against some common prejudices…
- Is marketing just a fancy term for “sales”?
Marketing Sales
Focus on long-term satisfying of customer Focus short-term satisfying of customer
needs needs
Based to a larger extent on customer input Based the only a limited extent on customer
in designing the offering (co-creation) input designing the offering
Puts the focus on stimulating demand Rather than focusing on stimulating
demand, it tends to focus more on
satisfying existing demand
o In marketing the customer is central
§ Not selling, but satisfying customer needs
o The aim of marketing is to know and understand the customer so well the product or
service fits him and sells itself.
o Marketing ¹ sales
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,MARKETING BUSINESS ECONOMICS I
- Marketing… nothing more than advertising?
- Marketing ¹ redundant in times of economic crisis:
“Don’t you dare cut your marketing budget. That is one of the first mistakes
businesses make during times of economic crisis.”
§ Procter and Gamble: Great Depression (1930s): ‘Ivory Soap’
§ Intel: In economic downturn of 1990-1991 launch of campaign “Intel Inside”
- Is marketing only for products?
o No, it can also be Trump (that’s a person), Thomas Cook (a company) etc.
- Not for “non-profit”- organizations?
o Yes, non-profit organizations like cliniclowns, WWF, Greenpeace, Brussels Alumni
- Marketing is readily used by local governments, churches, museums, charities, universities,
political parties, zoos, and public hospitals. (all of which operate without profit as central goal)
o Profit is not the only central goal
§ E.g. Generating awareness, acquiring volunteers, inform the people lobby for
legal amendments, increasing geographical impact…
- Marketing as “exchange” à a 2-way diadic process
- Exchange does not necessarily imply merely paying a price
- Note:
o Value can only be created by co-creation between supplier and consumer.
§ Supplier can provide a ‘value proposition’
§ Offer only has value for the consumer upon (correct) usage with the goal of
satisfying one’s needs/wants/demand (‘value in use’)
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,MARKETING BUSINESS ECONOMICS I
Distinction with PROFIT ORGANISATIONS:
- Product:
o Non-profit “products” tend to be characterized by a weaker USP (i.e. less clear direct
benefits)
- Price:
o E.g. what is the price one pays for voting for a certain political party? What amount of
money do you want to donate to charity?
- Involvement:
o Often extremely involved pro/con
- Segmentation:
o Often undifferentiated marketing as compared to profit context (cf. Chapter 6)
- Mission statement:
o cause-related rather than striving to be the best
Message:
- Emotional:
o creating a memorable emotional response among the target audience of donors
- Rational:
o Giving donors a reason to donate, based on objective facts
Cause-related marketing:
= Commercial organizations trying to differentiate by sponsoring popular social goals
(causes), in order to appeal to a target audience (mutual benefit for the commercial
organization and the non-profit cause)
= a commercial activity whereby companies and non-profit organizations form an alliance to
market an image, product, or service at their mutual benefit.
o Positive brand image
o Respect among employees
o Customer loyalty
Marketing ¹ only for profit
- Examples:
o Think Pink = a company that collects hair and give it to make a wig for women with
breastcancer. people can also donate money, the profit goes to organization for
women with cancer.
o Ecosia
- Short-term customer wants vs. long-term customer well-being
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, MARKETING BUSINESS ECONOMICS I
The marketing Process:
1.2. The marketplace and customer needs:
Customer needs, wants and demands:
Needs: a state of felt deprivation
Physical – food, clothing, warmth & safety
Social – need for belonging and affection
Individual – need for knowledge and self-expression
Wants: the form human needs take, as shaped by our culture and individual personality.
E.g. A hungry person in China may want to indulge in some Peking duck whereas, an
American may want to eat some KFC.
PEOPLE HAVE ALMOST UNLIMITED WANTS, BUT HAVE LIMITED RESOURCES (TIME + MONEY)
Demands: human wants that are backed by buying power – these revolve around satisfaction
Market myopia: the mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products.
o “In the factory, we make cosmetics; in the store, we sell hope”
o Watch out for marketing myopia!
Myopia: don’t look beyond, belief everything
“Better mousetrap fallacy”
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