Chapter 1 - Summary Principles of Marketing PDF

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Summary

Professor Terry Paul- Textbook Chapter 1...

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08/31/2015 

Marketing- marketing is managing profitable customer relationships  Create value for customers in order to capture value from 

customers in return Attract customers by promising value, keep and grow customers by

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delivering satisfaction Social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others

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The Marketing Process

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1)Understand the marketplace and customer needs/wants 2) Design a customer-driven marketing strategy 3) Construct an integrated marketing program that delivers value

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4) Build profitable relationships/ customer delight 5) capture value

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Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands  Needs- states of felt deprivation (physical, social, individual)  Wants- the form human needs take as they are shaped by culture 

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and individual personality Demands- wants backed by buying power

Market Offerings, Products, Services, and Experiences  Consumers needs and wants are fulfilled through market offerings  Market offerings- combo of products, services, information, or experiences, offered to a market to satisfy needs and wants o Products and services, persons, places, organizations, 

information, and ideas Marketing myopia- mistake sellers make of paying more attention to specific products than to the benefits and experiences produced by these products

Customer Value and Satisfaction Exchanges and Relationships  Exchange- obtaining a desired object from someone by offering something in return

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Marketing takes action to create, maintain, and grow exchange relationships with target audiences involving a product, service idea

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or other object Markets  Market- set of actual and potential buyers of a product or service

Designing a Customer Driven Market Strategy  What customers will we serve? (What is our target market?)  How can we serve these customers best? (Whats our value proposition?)

Selecting a customer to serve  Dividing market into segments (market segmentation) and selecting 

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which segments it will go after (target marketing) Choosing a Value Proposition  How it will differentiate and position in the marketplace  Value proposition- set of benefits and value ti promises to deliver to customer to satisfy their needs Marketing Management Orientations  What philosophy should guide the marketing strategy? The Production concept  Customers will favor products that are available and highly affordable focus on improving production and distribution  Can lead to marketing myopia The Product Concept  Consumers will favor products that offer the most in quality, performance, and innovation  make continuous product improvements The Selling Concept  Consumers will not buy enough of the firms products unless it 

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undertakes large scale selling and promotion effort Practiced with unsought goods – those that buyers do not normally

think of buying  Focuses on sales transaction instead of long term relationship The Marketing Concept

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Achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions

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better than competitors do Customer focus and value are the paths to sales and profits

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Sense and respond Customer driving marketing- understanding the customer needs

even better than customers and creating products and services that meet both existing and latent needs The Social Marketing Concept  Questions whether the pure marketing concept over looks poosible conflicts between consumer short run wants and consumer long run 

welfare Deliver value to customers in a way that maintains or improves

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both the consumer’s and society;s well being Sustainable marketing, shared value

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Preparing an Integrated Marketing Plan and Program  What customers it will serve, how it will create value for these  

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customers Marketing mix- set of marketing tools the firm uses to implement its marketing strategy The four P’s of Marketing o Product- create a need satisfying market offereing o Price- how much the firm charges o Place- how the firm will make the offering available o Promotion- communicate with target customers about the

offering and persuade them of its merits Building Customer Relationships  Customer relationship management- CRM, managing detailed information about individidual customers and using touchpoints to  

maximize loyalty Create superior value and satisfaction Customer perceived value- the customers evaluation of the difference between all the benefits and all the costs of a market offering relative to its competitors

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Customer satisfaction- depends on the products perceived

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performance relative to a buyers expectations Basic relationships vs full relationships

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Frequency marketing programs, club marketing groupos The Changing Nature of Customer Relationships  Todays companies are building deeper, more direct, lasting 

relationships with more carefully selected customers Customer profitability analysis

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Interactive customer relationships- sense of community around the

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brand Opportunity for customers to manage the relationship tho Consumer generated marketing- customers play big role in shaping

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brand experience for themselves and others Partner relationship management- working closely with those inside and outside the company to bring more value  supply cahin management

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Capturing Value from Customers  Sales, market shares and profits

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Creating Customer Loyalty/ Retention  Satisfied Customers return  It is five times cheaper to keep an old customer than acquire a new 

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one Losing a customer is losing the customer’s lifetime value

Growing Share of Customer  Share of customer- the share marketers receive of the customer’s purchasing that type of good Customer Equity  Total combined customer lifetime values of all of the comapnys current and potential customers, measure of the future value of the company’s customer base Butterflies, Barnaces, True Friends, and Strangers The Changing Market Landscape Recession  habits are likely to stay for years to come  Markets stress value of their offerings

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Value of the money, practicality, and durability

The Digital Age  Ways to learn about and track customers  create products and services based on customer needs  Online marketing is the fastest growing form of marketing Growth of Non for Profit Marketing Rapid Globalization Sustainable marketing  Corporate ethics and social responsibility  Customers expect companies to deliver value in a socially and 

environmentally responsible way Caring capitalism

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