The Principles of Marketing
H1
Marketing is the process by which companies engage customers, build strong
relationships, and create customer value in order to capture value from customers in
return.
“Emirates is not just offering a way to connect people from point A to point B but
aims to be the catalyst to connect people's dreams hopes and aspirations.”
Today's successful companies have one thing in common: Like Emirates, they are
strongly customer focused and heavily committed to marketing. Customer
relationships and value are especially important today. Facing dramatic technological
advances and deep economic, social, and environmental challenges, today's
customers are reassessing how they engage with brands. New digital, mobile, and
social media developments have revolutionized how consumers shop and interact, in
turn calling for new marketing strategies and tactics.
The marketing process:
Creating value for customers -> Capture value from customers in return.
Needs are states of felt depreciation. For example: needs for food, clothing, warmth
and safety.
Wants are the form of human needs take as they are shaped by culture and
individual personality.
Demands are human wants that are backed by buying power.
Consumers 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). Some sellers suffer from Marketing Myopia. This is focusing
only on existing wants and losing sight of underlying consumer needs.
Once a company fully understands consumers and the marketplace, marketing
management can design a customer value-driven marketing strategy. The aim is to
engage, keep, and grow target customers by creating, delivering, and
communicating superior customer value. -> “What’s our target market?” + “What’s
our value proposition?” (How can we serve these customers best?)
,A brand's value proposition is the set of benefits or values it promises to deliver to
consumers to satisfy their needs.
Marketing management wants to design strategies that will engage target customers
and build profitable relationships with them.
Five concepts under which organizations design and carry out their marketing
strategies:
Production Concept. Consumers will favor products that are available and highly
affordable. Management should focus on improving production and distribution
efficiency. (Gaat dus over proces).
Product Concept. Consumers will favor products that offer the most in quality,
performance, and innovative features. This can lead to market myopia. For example,
customers sometimes look for an alternative instead of a better version of the
product.
Selling Concept. Consumers will not buy enough of the firm's products unless it
undertakes a large scale-selling and promotion effort. The aim is to sell what the
company makes rather than making what the customer wants.
Marketing Concept. The idea that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors too. Instead of a product-centered make-and-
sell philosophy, the marketing concept is a customer-centered sense-and-respond
philosophy. The job is not to find the right customers for your product but to find the
right product for your customers.
Societal Marketing Concept. This question is whether the pure marketing concept
overlooks possible conflicts between consumer short-run wants and consumer long-
run welfare. It should consider consumers wants, the company’s requirements,
consumers long-run interests, and society’s long-run interests.
(People, Planet, Profit)
The major marketing mix tools are classified into four broad groups, called the four
Ps of marketing: product, price, place and promotion.
Customer relationship management is the overall process of building and
maintaining profitable customer relationships by delivering superior customer value
and satisfaction. It deals with all aspects of acquiring, engaging, and growing
customers.
Customer-engagement marketing: making the brand and meaningful part of
consumers conversations and lives by fostering direct and continuous customer
involvement in shaping brand conversations, experiences and community.
One form of customer-engagement marketing is consumer-generated marketing, by
which consumers themselves play roles in shaping their own brand experiences and
those of others. For example, Oreo recently ran a contest asking fans to come up
with new flavor ideas.
Customer lifetime value: waarde van alle aankopen van een klant over de hele
periode dat hij klant is (lifetime). Doel: klanten vaker komen, klanten langer blijven,
klanten meer kopen. -> To keep customers coming back. Beyond simply retaining
good customers to capture customer lifetime value, good customer relationship
management can help marketers increase their share of customer (= the portion of
the customers purchasing that a company gets in its product categories).
,Customer equity is the total combined customer lifetime values of all the companies
current and potential customers.
Example: in the 70s and 80s, Cadillac had some of the most loyal customers in the
industry. However, measures of customer equity would have painted a bleak picture.
Cadillac customers were getting older, and average customer lifetime value was
falling. Many Cadillac buyers were on their last cars. Thus, although Cadillac’s
market share was good, it's customer equity was not.
The company can classify customers
according to their potential profitability and
manage its relationships with them
accordingly.
H2
“Rolex has established and maintained its pole position as the largest luxury watch
brand on the planet. At its core, Rolex doesn't sell just wristwatches, it sells a
sentiment of achievement and belonging to an exclusive club.”
Each company must find a game plan for long run survival and growth that makes
the most sense given its specific situation, opportunities, objectives and resources.
This is the focus of strategic planning- the process of developing and maintaining a
strategic “fit” between the organization's goals and capabilities and its changing
marketing opportunities.
Strategic Planning Process:
Defining the company mission. Many organizations develop formal mission
statements that answer these questions. The mission is the statement of the
organization's purpose- what it wants to accomplish in the larger environment. A
clear mission statement acts as an “invisible hand” that guides people in the
organization. They should be market oriented and defined in terms of satisfying basic
customer needs. For example, Pinterest doesn't define itself as just an online place
to post pictures. Its mission is to give people a platform for collecting and sharing
things they love. Mission statements should be meaningful and specific yet
, motivating. The company's mission should not be stated as making more sales or
profits; profits are only a reward for creating value for customers.
Setting company objectives and goals. For example, to increase customer
engagement, sales, and market share.
Designing the business portfolio (the collection of business and products that make
up the company. The best portfolio is the one that best fits the company's strengths
and weaknesses to opportunities in the environment.
1) Identify the strategic business units (SBUs). An SBU can be a company
division, a product line within a division, or sometimes a single product.
2) Assess the attractiveness of its various SBU's.
3) Decide how much support each deserves.
The purpose of strategic planning is to find ways in which the company can best use
its strengths to take advantage of attractive opportunities in the environment. Most
standard portfolio analysis methods evaluate SBU’s on two important dimensions:
the attractiveness of the market or industry and the strength of the SBU's position in
that market.
Using the classic Boston Consulting Group (BCG)
approach, a company classifies all its SBU's according
to the growth-share matrix.
1. Stars often need heavy investments to finance
their rapid growth. Eventually they will turn into
cash cows.
2. Cash cows are established and successful
SBU's and need less investment to hold their
market share. They produce a lot of cash.
3. Question marks require a lot of cash to hold
their share, let alone increase it. Management
thinks about it whether it should try to build into
star or to be phased out.
4. Dogs generate enough cash to maintain
themselves but do not promise to be large
sources of cash.
Bijvoorbeeld: Unilever stopt met Lipton thee, gaat wel door met Ice Tea. Hierdoor
komt geld vrij om weer opnieuw te investeren.
Problems with BCG-matrix:
- Difficulty in defining SBU's and measuring market share/growth.
- Time consuming.
- Expensive.
- Focus on current business, not future planning.
Beyond evaluating current businesses, designing the business portfolio involves
finding businesses and products for the future. Companies need growth if they are to
