Summary Principles of Marketing, all information needed for the midterm is here, everything from the slides and lectures to the book. This document is all you need to get a good grade from Marketing 1 midterm.
Summary – Marketing
Chapter 1 – Creating Customer Value and Engagement
1.1 - What is Marketing?
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. The two goals of marketing are to
attract new customers by promising
superior value and to keep and to grow
current customers by delivering value and
satisfaction. Marketing must be
understood in the sense of satisfying
customer needs. The marketing process
involves five steps, as shown in the graph
on the right.
1.2 - Understanding the Marketplace and
Customer Needs
Outstanding marketing companies go to great lengths to learn about and understand their
customers’ needs, wants and demands. This understanding helps them to design want-satisfying
market offerings and build value-laden customer relationships by which they can capture customer
lifetime value and greater share of customer. The result is increased long-term customer equity for
the firm. The five-core customer and marketplace concepts:
1. Customer Needs, Wants and Demands; Human needs are states of felt deprivation,
marketeers did not create these needs, they are basic part of the human makeup. Wants are
the form human needs take as they are shaped by culture and individual personality. When
backed by buying power, wants become demands. Given their wants and resources people
demand products and services with benefits that add up the most value and satisfaction.
2. Market Offerings (Products, Services and Experiences); 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. Market myopia is the 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 is only a problem to
solve a consumer problem.
3. Customer Value and Satisfaction; Customers form expectations about the value and
satisfaction that various market offerings will deliver and buy accordingly. Satisfied
customers buy again and tell others about their good experiences. Dissatisfied customers
often switch to competitors and disparage the product to others.
4. Exchanges and Relationships; Exchange is the act of obtaining a desired object from
someone by offering something in return. Companies want to build strong relationships by
consistently delivering superior customer value.
5. Markets; A market is the set of all actual and potential buyers of a product or service. These
buyers share a particular need or want that can be satisfied through exchange relationships.
Companies address needs, wants and demand by putting forth a value proposition, a set of benefits
or values that they promise to consumers to satisfy their needs. The value proposition is fulfilled
1 – Summary Marketing
, through a market offering, which delivers customer value and satisfaction, resulting in long-term
exchange relationships with customers.
1.3 - Designing a Customer Value-Driven Marketing Strategy and Plan
To design a good marketing strategy, the company must first decide whom it will serve. It does this
by dividing the market into segments of customers and selecting which segments it will serve
targeted customers. This is marketing management, the art and science of choosing target markets
and building profitable relationships with them. Marketing’ management can adopt one of five
competing market orientations:
1. Production concept; Idea that consumers will favour products that are available and highly
affordable. Therefore, the organization should focus on improving production and
distribution efficiency and bring cost down.
2. Product concept; Idea that consumers will favour products that offer the most quality,
performance and features. Therefore, the organization should devote its energy to making
continuous product improvements.
3. Selling concept; Idea that consumers will not buy enough of the firm’s product unless the
firm undertakes large-scale selling and promotion effort.
4. Marketing concept; 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.
The job is not to
find the right
customers for your
product but to find
the right products
for your customers.
5. Social marketing concept; Idea that a company’s marketing decisions should
consider consumers’ wants, the company’s requirements, consumers’ long-
run interests and society’s long-run interest. It calls for sustainable marketing,
socially and environmentally responsible marketing that meets the present
needs of consumers and businesses while also preserving or enhancing the
ability of future generations to meet their needs.
1.4 - Managing Customer Relationships
Customer relationship management is the process of engaging customers and building and
maintaining profitable customer relationships by delivering superior customer value and satisfaction.
A customer buys from the firm that offers the highest customer-perceived value, the customer’s
evaluation of the difference between all benefits and all the costs of a market offering relative to
those of competing offers. Customer-engagement marketing aims to make a brand a meaningful
part of consumers’ conversations and lives through direct and continuous customer involvement in
shaping brand conversations, experiences and community. Beyond building brand loyalty and
purchasing, marketers want to create customer brand advocacy, action by which satisfied
customers initiate favourable interactions with others about a brand. Consumer-generate marketing
is brand exchanges created by consumers themselves (both invited and uninvited) by which
consumers are playing an increasing role in shaping their own brand experiences and those of other
consumers. In addition to being good at customer relationship management, marketers must also be
good at partner relationship management which is working closely with partners in other company
departments and outside the company to jointly greater value to customers.
2 – Summary Marketing
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