MARKETING
CHAPTER 1 – MARKETING PRINCIPLES AND PRACTICES
1. WHAT IS MARKETING?
Marketing is a social and managerial process of understanding what people need and want,
and creating value for them through products, services, or ideas.
Marketing is about building value and long-term relationships.
The primary goal of marketing is understanding and meeting customer needs to create value.
Increase sales through aggressive promotion.
Create advertisements for products.
Ensure that products are cheaper than those of the competitions.
Marketing applies anywhere where buyers have a choice:
Products.
Services.
Retail.
Experiences.
Events.
Film, music and theatre.
Places.
Ideas.
Charity and non-profit.
People.
2. WHAT IS THE DIFFERENCE BETWEEN CUSTOMERS AND CONSUMERS?
A customer is the person who buys the product.
A consumer is the person who uses it.
consumers’ buying roles
initiator The initiator starts the idea of buying.
influencer The influence influences choice.
decider The decider makes the final decision.
buyer The buyer buys it.
payer The payer pays for it.
gatekeeper The gatekeeper controls information.
Marketers must understand these roles to communicate effectively.
1
,3. MARKET ORIENTATION
Market orientation means that the whole company:
Collects information about what customers need now and in the future.
Shares this information with all departments.
Uses this information to respond quickly and effectively.
Everyone in the company believes in delivering customer value. That means that the
company creates products that fit current needs and hidden/future needs.
There are three components of market orientation:
Customer orientation: create value for customers better than anyone else.
Competitor orientation: stay competitive by offering something better or different.
Interfunctional coordination: the whole organization supports the customer, not just
one team.
! At the center is the goal, long-term profit.
customer centricity Customer centricity is not always trying to please all customers;
the company needs to fulfill needs in a profitable way.
4. DIFFERENCES BETWEEN SALES AND MARKETING
sales marketing
Tends towards short-term Tends towards long-term
satisfaction of customer needs. satisfactions of customer needs.
Pushes existing products. Starts from customer needs.
The aim is to sell what we already The aim is to create demand and
have. build relationships.
The focus is acquisition. The focus is retention.
5. WHAT DO MARKETERS DO?
The marketers place the customer at the center of a
company’s operations and decision-making processes.
Generate customer insights.
Develop marketing strategy.
Decide segmentation, targeting, position.
Manage the marketing mix.
Work with other departments.
Build long-term customer relationships.
Help guide the company’s strategic direction.
2
,6. MARKETING AS EXCHANGE
Exchange is the act of obtaining a desired object from someone by offering something in
return. Exchange creates value.
At least two parties.
Each must hold something of value to offer.
Parties must want to deal with each other.
customer Customer value is the consumer’s assessment of the product’s overall
value capacity to satisfy his or her needs.
𝑝𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑣𝑎𝑙𝑢𝑒 =
𝑝𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝑐𝑜𝑠𝑡𝑠
High costumer value leads to:
Repeat purchases.
Loyalty.
Positive word-of-mouth.
Larger market share.
Higher customer equity.
7. THE MARKETING MIX AND THE 4Ps
4Ps 4Cs
ORIGINAL Customer.
Product. Cost.
Price. Convenience.
Place. Communication.
Promotion.
EXTENTED
People.
Process.
Physical evidence.
THE NEW P
Personalization: the adjusting of
products and messages to everyone
using data.
context marketing Context marketing is about delivering marketing messages to
customers at the right moment based on their situation and
behaviour.
Real-time data.
Personalization.
Relevance.
Timing.
Channel.
3
, 8. RELATIONSHIP MARKETING, SERVICE-DOMINANT LOGIC, AND
CO-CREATION
relationship marketing Relationship marketing is the shift from customer acquisition
through a transactional manner towards retaining customers
long-term by better management of customer relationships.
consumer retention > consumer acquisition
! Loyal customers will increase their purchases over time, and
are cheaper to promote to, who are happy with their
relationship with a company and refer it to others and are
prepared to pay a premium price.
customer relationship Customer relationship or CRM is the process of acquiring
management detailed information of individual customers and carefully
building and managing customer relationships by delivering
superior value.
Touchpoints include websites, stores, customer services,
payments, emails, ...
marketing automation Marketing automation is a category of technology that allows
companies to streamline, automate, and measure marketing
tasks and workflows, so they can increase operational
efficiency and grow revenue faster.
! Software that automates repetitive tasks.
selective relationship Not all customers are equally profitable. Companies use
management customers’ lifetime value to decide who to invest in.
! Maximizing profit over customer’s lifetime.
Losing a customer means losing lifetime’s worth of purchases
and referrals.
service-dominant logic Service-dominant logic is the idea that a service is the basis of
all exchange. Even physical products are just tools for
delivering a service.
co-creation Customers help create value through participating in design,
giving ideas, creating content and engaging with brands.
Organizations can use co-creation to differentiate their
offerings.
! Value is created during use, not during production.
9. MARKETING’S IMPACT ON SOCIETY
macromarketing Macromarketing is the study of the effect that marketing processes,
activities, and institutions have on the economy and the society of a
nation.
! Marketing positively contributes to non-profit marketing and
innovation. But marketing is also often criticized for being unethical,
manipulative and creating artificial wants and needs.
4
CHAPTER 1 – MARKETING PRINCIPLES AND PRACTICES
1. WHAT IS MARKETING?
Marketing is a social and managerial process of understanding what people need and want,
and creating value for them through products, services, or ideas.
Marketing is about building value and long-term relationships.
The primary goal of marketing is understanding and meeting customer needs to create value.
Increase sales through aggressive promotion.
Create advertisements for products.
Ensure that products are cheaper than those of the competitions.
Marketing applies anywhere where buyers have a choice:
Products.
Services.
Retail.
Experiences.
Events.
Film, music and theatre.
Places.
Ideas.
Charity and non-profit.
People.
2. WHAT IS THE DIFFERENCE BETWEEN CUSTOMERS AND CONSUMERS?
A customer is the person who buys the product.
A consumer is the person who uses it.
consumers’ buying roles
initiator The initiator starts the idea of buying.
influencer The influence influences choice.
decider The decider makes the final decision.
buyer The buyer buys it.
payer The payer pays for it.
gatekeeper The gatekeeper controls information.
Marketers must understand these roles to communicate effectively.
1
,3. MARKET ORIENTATION
Market orientation means that the whole company:
Collects information about what customers need now and in the future.
Shares this information with all departments.
Uses this information to respond quickly and effectively.
Everyone in the company believes in delivering customer value. That means that the
company creates products that fit current needs and hidden/future needs.
There are three components of market orientation:
Customer orientation: create value for customers better than anyone else.
Competitor orientation: stay competitive by offering something better or different.
Interfunctional coordination: the whole organization supports the customer, not just
one team.
! At the center is the goal, long-term profit.
customer centricity Customer centricity is not always trying to please all customers;
the company needs to fulfill needs in a profitable way.
4. DIFFERENCES BETWEEN SALES AND MARKETING
sales marketing
Tends towards short-term Tends towards long-term
satisfaction of customer needs. satisfactions of customer needs.
Pushes existing products. Starts from customer needs.
The aim is to sell what we already The aim is to create demand and
have. build relationships.
The focus is acquisition. The focus is retention.
5. WHAT DO MARKETERS DO?
The marketers place the customer at the center of a
company’s operations and decision-making processes.
Generate customer insights.
Develop marketing strategy.
Decide segmentation, targeting, position.
Manage the marketing mix.
Work with other departments.
Build long-term customer relationships.
Help guide the company’s strategic direction.
2
,6. MARKETING AS EXCHANGE
Exchange is the act of obtaining a desired object from someone by offering something in
return. Exchange creates value.
At least two parties.
Each must hold something of value to offer.
Parties must want to deal with each other.
customer Customer value is the consumer’s assessment of the product’s overall
value capacity to satisfy his or her needs.
𝑝𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑣𝑎𝑙𝑢𝑒 =
𝑝𝑒𝑟𝑐𝑒𝑖𝑣𝑒𝑑 𝑐𝑜𝑠𝑡𝑠
High costumer value leads to:
Repeat purchases.
Loyalty.
Positive word-of-mouth.
Larger market share.
Higher customer equity.
7. THE MARKETING MIX AND THE 4Ps
4Ps 4Cs
ORIGINAL Customer.
Product. Cost.
Price. Convenience.
Place. Communication.
Promotion.
EXTENTED
People.
Process.
Physical evidence.
THE NEW P
Personalization: the adjusting of
products and messages to everyone
using data.
context marketing Context marketing is about delivering marketing messages to
customers at the right moment based on their situation and
behaviour.
Real-time data.
Personalization.
Relevance.
Timing.
Channel.
3
, 8. RELATIONSHIP MARKETING, SERVICE-DOMINANT LOGIC, AND
CO-CREATION
relationship marketing Relationship marketing is the shift from customer acquisition
through a transactional manner towards retaining customers
long-term by better management of customer relationships.
consumer retention > consumer acquisition
! Loyal customers will increase their purchases over time, and
are cheaper to promote to, who are happy with their
relationship with a company and refer it to others and are
prepared to pay a premium price.
customer relationship Customer relationship or CRM is the process of acquiring
management detailed information of individual customers and carefully
building and managing customer relationships by delivering
superior value.
Touchpoints include websites, stores, customer services,
payments, emails, ...
marketing automation Marketing automation is a category of technology that allows
companies to streamline, automate, and measure marketing
tasks and workflows, so they can increase operational
efficiency and grow revenue faster.
! Software that automates repetitive tasks.
selective relationship Not all customers are equally profitable. Companies use
management customers’ lifetime value to decide who to invest in.
! Maximizing profit over customer’s lifetime.
Losing a customer means losing lifetime’s worth of purchases
and referrals.
service-dominant logic Service-dominant logic is the idea that a service is the basis of
all exchange. Even physical products are just tools for
delivering a service.
co-creation Customers help create value through participating in design,
giving ideas, creating content and engaging with brands.
Organizations can use co-creation to differentiate their
offerings.
! Value is created during use, not during production.
9. MARKETING’S IMPACT ON SOCIETY
macromarketing Macromarketing is the study of the effect that marketing processes,
activities, and institutions have on the economy and the society of a
nation.
! Marketing positively contributes to non-profit marketing and
innovation. But marketing is also often criticized for being unethical,
manipulative and creating artificial wants and needs.
4
