Chapter 1 – Marketing Concept

Marketing
The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Goals of Marketing
1. Attract new customers by promising superior value.
2. Keep and grow current customers by delivering satisfaction.
Five Core Customer and Marketplace Concepts
1. Needs, wants, and demands
2. Market offerings (products, services, and experiences)
3. Value and Satisfaction
4. Exchanges and relationships
5. Markets
Needs
States of felt deprivation.
Wants
The form human needs take as they are shaped by culture and individual personality.
Demands
Human wants that are backed up by buying power.
Type of Needs
1. Physical Needs: Food, clothing, warmth, and safety
2. Social Needs: Belonging and affection
3. Individual Needs: Learning, knowledge, and self-expression
Market Offerings (Products, Services, and Experiences)
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Marketing Myopia
The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.
Customer Value and Satisfaction
– If marketers set expectations too low, they may satisfy those who buy but fail to attract enough buyers.
– If marketers set expectations too high, buyers will be disappointed.
Markets
The set of all actual and potential buyers of a product or service.
Customer-Driven Marketing Strategy
1. What customers will we serve (what’s our target market)?
2. How can we serve these customers best (what’s our value proposition)?
Value Positioning Statement
For_______(target consumer)
Who_______(statement of need/opp)
Our Product Is________(product category)
That________(statement of benefit)
Example of VPS
For (non-technical marketers)
Who (struggle to find ROI in social media)
Our product is (a web based analytics software)
That (translates engagement into revenue)
Marketing Management
The art and science of choosing target markets and building profitable relationships with them.
Selecting Customers to Serve
– Market Segmentation: Dividing the market into segments of customers.
– Target Marketing: Selecting one or more segments to cultivate.
Value Proposition
The set of benefits or values a company promises to deliver to consumers to satisfy their needs.
Marketing Concepts
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal Marketing concept
Production Concept
Consumers will favor products that are available and highly affordable. The organization should focus on improving production and distribution efficiency.
Product Concept
Consumers will favor products that offer the most quality, performance, and features. The organization should devote its energy to making continuous product improvements.
Selling Concept
Consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort.
Marketing Mix Tools
1. Product
2. Price
3. Place (Distribution)
4. Promotion
The firm must blend each marketing mix tool into a comprehensive integrated marketing program.
Customer Relationship Management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Customer Perceived Value
The customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.
Partner Relationship Management
Partners inside the firm: Cross-functional teams
Partners outside the firm: Supply Chain and Channel Partners
Capturing Value From Customers
Superior customer value leads to highly satisfied loyal customers who buy more.