Marketing
23 nov midterm
19 dec tentamen
WEEK 1
What is marketing? => a process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return.
The focus is on satisfying the relevant customer needs:
1. Aspect: market definition; in which market are we operating or would like to operate?
2. Aspect: relevance of needs; which ones substantially influence the buying decision?
Concept of “Dual Value Creation”:
Different options for customers > Creating value for customers > Creating value for the company
We examine five core customer and marketplace concepts:
Needs, wants and demands
Needs such as basic physical needs, social needs and individual needs. Wants are the form human
needs take as they are shaped by society, 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 to the most value and satisfaction.
Market offerings (products, services and experiences)
These are all fulfilled through market offerings; these are not limited to physical products. Many
sellers make the mistake of strictly focusing on the product instead of its benefits and experience
which could much better identify underlying customer needs => marketing myopia.
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 their friends. So the trick is to
carefully set the right level of expectations. Customer value and customer satisfaction are key
building blocks for developing and managing customer relationships
Exchanges and relationships
Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships
with target audiences involving a product, service, idea, or other object. Companies want to build
strong relationships by consistently delivering superior customer value.
*exchange = act of obtaining a desired object by offering something in return
Markets
Market is the set of actual and potential buyers. Consumers market when they: search for products,
interact with companies to obtain information, purchase, share their experiences.
Each party in the system adds value for the next level.
The arrows represent relationships that must be
developed and managed. Thus, a company’s success at
engaging customers and building profitable relationships
depends not only on its own actions but also on how well
the entire system serves the needs of final consumers.
,Designing a customer value-driven marketing strategy and plan.
We define marketing management as the art and science of choosing target markets and building
profitable relationships with them.
- What customers will we serve (what’s our target market)?
- how can we serve these customers best (what’s our value proposition)?
>selecting customers to serve
This is done by dividing the market into Des of customers (market segmentation) and selecting which
segments it will and could successfully go after (target marketing). Ultimately, marketing managers
must decide which customers they want to target and the level, timing, and nature of their demand.
Simply put, marketing management is customer management and demand management.
>choosing a value proposition
A brand’s value proposition is the set of benefits or values it promises to deliver to consumers to
satisfy their needs. Such value propositions differentiate one brand from another. They answer the
customer’s question: “Why should I buy your brand rather than a competitor’s?” Companies must
design strong value propositions that give them the greatest advantage in their target markets.
>marketing management orientations
There are five concepts under which organizations design and carry out their marketing strategies:
1. Production concept holds that consumers will favor products that are available and highly
affordable. Management should focus on improving production and distribution efficiency.
2. Product concept holds that consumers will favor products that offer most in quality,
performance and innovative features. The strategy should focus on making continuous
product improvements.
3. Selling concept holds that consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort. These industries must be good at
tracking down prospects and selling them on a product’s benefits. Its high risk because the
focus lies on sales transactions instead on building customer relationships.
4. Marketing concept holds that achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than competitors
do. This marketing concept is a customer-centered sense-and-respond philosophy. Some
situations call for customer-driving marketing—understanding customer needs even better
than customers themselves do and creating products and services that meet both existing
and latent needs, now and in the future.
5. Societal marketing concept holds that marketing strategy should deliver value to customers
in a way that maintains or improves both the consumer’s and society’s well-being. 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.
To deliver on its value proposition, the firm must first create a need-satisfying market offering
(product). It must then decide how much it will charge for the offering (price) and how it will make
the offering available to target consumers (place). Finally, it must engage target consumers,
communicate about the offering, and persuade consumers of the offer’s merits (promotion).
, Costumer relationship management
=>process of building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction.
Relationship building blocks are
1. Customer-perceived value, the customer’s evaluation relative to those of competing offers.
2. Customer satisfaction depends on the product’s perceived performance relative to a buyer’s
expectations.
Customer satisfaction results from balancing ------------------>
*Importantly, customers often do not judge values and costs
“accurately” or “objectively” => they act on perceived value.
*Higher levels of customer satisfaction > greater customer
loyalty > better company performance.
Marketers can also use specific tools to develop stronger bonds with customers. For example, many
offer frequency marketing programs that reward those who buy frequently or in large amounts.
The new marketing
Customer-engagement marketing: making the brand a meaningful part of consumers’ conversations
and lives by fostering direct and continuous customer involvement in shaping brand conversations,
experiences, and community. A form is consumer-generated marketing by which consumers
themselves play roles in shaping their own brand experiences. (blogs, reviews etc)
Beyond building brand loyalty and purchasing, marketers want to create customer brand advocacy:
actions by which satisfied customers initiate favorable interactions with others about a brand.
Outcomes of creating costumer value
- Customer loyalty and retention
Loyal customers spend more and stay around longer (customer lifetime value)
- Share of market and share of customer
The portion of the customer’s purchasing that a
company gets in its product categories in
exchange for its goods.
- Customer equity
The ultimate aim of customer relationship management is to
produce high customer equity. Customer equity is the total
combined customer lifetime values of all of the company’s current
and potential customers. As such, it’s a measure of the future value
of the company’s customer base. Not all customers are good
investments. The figure shows how to classify customers into
different relationship groups that need different strategies.
The digital age
=>internet of things (IoT)
A global environment where everything and everyone is digitally connected
=>digital and social media marketing
Using digital marketing tools such as websites and mobile apps to engage consumers anywhere
=> Marketers use mobile channels to stimulate immediate buying, make shopping easier, enrich the
brand experience, reach on-the-go consumers, or all of these
