Chapter 1:
Marketing = managing profitable customer relationships. Aim: create value
for customers in order to capture value from customers in return.
Goal of marketing: attract new customers and to keep and grow current
customers by delivering satisfaction.
Marketing: the process by which companies create value for customers
and build strong customer relationships in order to capture value from
customers in return.
Marketing process:
1. Understand market place and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct a marketing program that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity
Understanding the market place and customer needs:
Needs: states of felt deprivation. Physical needs for food, social needs for
affection and individual needs for knowledge and self-expression.
Wants: the form customer needs take as they are shaped by culture and
individual. You need food, but you want a Big Mac.
Demands: human wants that are backed by buying power.
Marketing offerings: combination of products, services, information
offered to a market to satisfy a need or want.
Marketing myopia: mistake of paying more attention to the specific
products a company offers than to the benefits and experiences produced
by these products. They forget that a product only is a tool to solve
consumer problem.
Exchange: the act of obtaining a desired object from someone by offering
something in return.
Market: the set of all actual and potential buyers of a product or service.
Designing a customer-drive market strategy:
Marketing management: the art and science of choosing target markets
and building profitable relationships with them.
Selecting whom you will serve: market segmentation to divide the market
into segments and then select which segments you will go after (target
marketing).
How to serve: differentiating and positioning of the firm. Value proposition:
set of benefits or values it promises to deliver to customers.
Five concepts under which organizations design and carry out their marketing
strategies:
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal marketing concept
Production concept
, Production concept: idea that consumers will favor products that are
highly available and highly affordable. Organization should focus on
improving production and distribution efficiency.
Risk: focusing too narrowly on their own operations and losing sight of the
real objective to satisfy customer needs and build customer relationships.
Product concept
Product concept: idea that consumers will favor products that offer the
most quality, performance and features. Organizations should devote
energy to make continuous product improvements.
Selling concept:
Selling concept: the idea that consumers will not buy enough of a firm’s
products unless the firm undertakes a selling and promotion effort.
Especially true with unsought goods: goods that buyers do not normally
think of buying. Insurances or blood donations.
Risk: selling focuses on creating sales transactions rather than on building
customer relationships. Goal is to sell what the company makes instead of
making what the market wants.
Find the right customers for your products.
Inside-out perspective: focuses on the company’s existing products, calls
for heavy selling to make profits. Focus on getting short-term sales without
caring about who buys or why.
Marketing concept
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.
Job is to find the right products for you customers instead of the right
customers for your product.
Outside-in perspective: focus on customer needs. Yields profits by creating
relationships with the right customers based on customer value and
satisfaction.
Marketing concept works well when customers know what they want and
they have clear needs.
Societal marketing concept
Societal marketing concept: the idea that a company’s marketing
decisions should consider consumers’ wants, the company’s requirements
and the interests of consumers and the whole society.
Questions whether the marketing concept overlooks possible conflicts
between consumer short-run wants and consumers long-run welfare.
Marketing should both improve the consumer’s and society’s well-being.
Societal marketing concept states that marketing should be good for:
1. Society: human welfare
2. Consumers: want satisfaction
3. Company: profits
Marketing mix:
1. Place (how to make the offering available to customers)
2. Price (how much to charge for the offering)
3. Promotion (how to communicate with target customers)
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