Marketing 3250 Chapter 1

Marketing
The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
Step 1 of the Marketing Process
Understand the marketplace and customer needs and wants
Step 2 of the Marketing Process
Design a customer-driven marketing strategy
Step 3 of the Marketing Process
Construct an integrated marketing program that delivers superior value
Step 4 of the Marketing Process
Build profitable relationships and create customer delight
Step 5 of the Marketing Process
Capture value from customers to create profits and customer equity
The 5 steps of the Marketing Process
1. Understand the marketplace and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated 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
Mnemonic Device to remember 5 steps of marketing process
UDPRV
Amazon’s motto
Obsess over customers
Collaborative Filtering Technology
Amazon the first company to use; sifts through each customer’s past purchases and the purchases of customers with similar profiles to come up with personalized content
McDonald’s
Save Money. Live Better
Peter Drucker: “The aim of marketing is
to make selling unnecessary”
Marketing Mix
A set of marketing tools that work together to satisfy customer needs and build customer relationships
Marketing
The process by which companies create vale for customers and build strong customer relationships in order to capture value from customers in return
5 core customer and marketplace concepts
1- needs, wants, demands 2- market offerings (products, services, experiences) 3- value and satisfaction 4-exchanges and relationships 5-markets
Need
states of felt deprivation
Wants
The form human needs take as they are shaped by culture and individual personality
Demands
Human wants backed by buying power
What kind of products do customers want in their demands?
Those that add up to the most value and satisfaction
3 facets of market offerings
products, services, experiences
Marketing Offerings
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want
Marketing Myopia
The mistake sellers make of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
Brand Experience
Walt Disney
Exchange
The act of obtaining a desired object from someone by offering something in return
Market
The set of actual and potential buyers of a product or service
Marketing Management
The art and science of choosing target markets and building profitable relationships with them
2 questions the marketing manager must answer
What customers will we serve and How can we serve these customers best?
How the company decides whom it is going to serve
market segmentation and target marketing
Market Segmentation
Dividing the market into segments of customers
Target Marketing
Selecting which segments the company will go after
Companies want to select only customers that it can serve…
well and profitably
Marketing management is basically demand of what two things?
Customer management and demand management
Choosing a Value Proposition
how will a company differentiate and position itself in the marketplace?
Value Proposition
The set of benefits or values it promises to deliver to consumers to satisfy their needs
Facebook’s value proposition
Helps you connect and share with the people in our life
5 Alternative Concepts under which organizations design and carry out their marketing strategies
Production Concept, Product Concept, Selling Concept, Marketing Concept, Societal Marketing Concepts
Production Concept
Consumers will favor products that are available and highly affordable
According to the Production Concept, organizations should focus on improving
production and distribution efficiency
The production concept can lead to
Marketing Myopia
Product Concept
Customers will prefer products tat offer the most quality, performance, and features
According to the Product Concept a company 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 Concept
Achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do
Marketing Concept = focusing on
the PATH to sales and profits
Philosophy of the Marketing Concept
sense and respond
Perspective of Selling Concept
inside-out
Perspective of Marketing Concept
outside-in
Customer-Driven Companies
companies research customers deeply to learn about their desires and obvious needs
Societal Marketing Concept
A company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long run interests, and society’s long run interests
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
Shared Values
Societal needs, not just economic needs, define the market
4 Ps of Marketing
Product, Price, Place, promotion
Product
Need-satisfying market offering
Price
How much it will charge for the offering
Place
How it will make the offering available to target customers
Promotion
Communicate with target customers about the offering and persuade them of its merits
Customer Relationship Management
Process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Key to building lasting customer relationships
creating superior customer value and satisfaction
Customer-Perceived Value
the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers
Customers often don;t judge values objectively but rather they act on
Perceived value
Customer Satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations
Purpose of marketing
Generate Customer Value profitably
Frequency Marketing Programs
Rewards customers who buy frequently or in large amounts
Consumer-Generated Marketing
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.
Partner Relationship Management
Working closely with partners in other company departments and outside the company to jointly bring greater value to customers
Customer Lifetime Value
The value of the entire stream of purchases a customer makes over a lifetime of patronage
Share of Customer
The portion of the customer’s purchasing that a company gets in its product categories
Example of Share of Customer
restaurants want more share of a customer’s stomach
Ultimate aim of Customer Relationship Management
to produce high customer equity
Customer Equity
The total combined lifetime values of all the company’s customers
2 main aims of marketing
1- Market segmentation and targeting 2- differentiation and positioning