Introduction to Marketing & Strategy
Lecture 1: Introduction and customer value
Misconception 1: marketing = advertising, communication
misconception 2: marketing = sales
What is marketing?
‘’marketing is the delivery of value to customers at a profit’’ – book (Fahy 2019),
p.73
‘’marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offers that have value for customers,
clients, partners, and society at large’’ – American Marketing Association (AMA)
What is value?
Value – according to Adam Smith (1776):
- value-in-use: value of a commodity to an individual. (high value for people, low
price) E.g. water
- value-in-exchange: economic value; price of the product. (low value for people,
high price) E.g. gold
Customer value = perceived benefits – perceived sacrifice
perceived benefits: product, service, image, in use overtime
perceived sacrifice: costs; financial, time, energy, psychological risk (risk,
uncertainty)
Types of customer value:
1. Price value (e.g., basic products for low prices)
2. Performance value (e.g., innovative products with appealing functionality
3. Emotional value (e.g., attachment to the brand)
4. Relational value (e.g., quality of the service)
Inside-out VS market-driven firms:
,Marketing myopia
• Theodore Levitt (1925-2006)
• Every major industry was once a growth industry
• When business growth is under pressure, it is almost always due to failing
management
• Defining what business you are in, is important to growth
• Product orientation instead of customer orientation
Value for firms:
• Satisfaction
• Loyalty – why long-term relationships so important?
• Acquiring new customers can cost 5 times as much
• A 5% reduction in attrition can increase profits by 25%-85%
• Loyal customer buys more
• Loyal customer more willing to try other products
• They are less price sensitive
• Positive Word-Of-Mouth (WOM)
The new marketing myopia:
Smith et al. (2010) warn for the “new marketing myopia”:
- One-sided focus on the customer
- Narrow definition of customer(needs)
- Inability to recognize the changing social context
Solution/ an alternative perspective:
Stakeholder marketing = “activities within a system of social institutions and
processes for
facilitating and maintaining value through exchange relationships with multiple
stakeholders”
‘’societal orientation’’
There are so many things that add value, what should I focus on?
Tool: Kano model
,How to create value?
- Marketing mix = 4P’s of marketing (product, place, price, promotion)
- Align the 4 P’s
- Consistency is key
Lecture 2 – what is strategy?
Strategy: The pattern of choices an organization makes, regarding the allocation
of resources and its relationship with the external environment, in order to
achieve its long-term goals.
There are 5 elements you can use to test whether a strategy is good or
not:
1. External fit -> strategy has to fit the environment
2. Internal fit -> Strategy has to fit the resources and capabilities of the
organization
3. Dynamic fit -> strategy has to adapt and be future-proof
4. Competitive advantage -> If competitors perform better than you, you will
inevitably be overtaken
5. Performance -> If you do not make a profit, you do not have a good
strategy (as a company)
Definitions of strategy:
- Michael Porter: Positioning in industry or market, determined in advance
based on thorough analysis.
- Henry Mintzberg:
o Strategy as a plan: deliberate and pre-developed plan or guideline for
future action(s)
o Strategy as ‘ploy’ (trick): (list, trick): a maneuver or tactic intended to
mislead or outsmart competitors
o Strategy as pattern: a pattern in a set of activities (whether deliberate or
not)
o Strategy as position: to take a position in a particular market or industry
by pursuing differentiation
o Strategy as perspective: a shared perspective (set of beliefs) within an
organization about reality, which translates into intentions and actions.
, Different levels of strategy:
Lecture 1: Introduction and customer value
Misconception 1: marketing = advertising, communication
misconception 2: marketing = sales
What is marketing?
‘’marketing is the delivery of value to customers at a profit’’ – book (Fahy 2019),
p.73
‘’marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offers that have value for customers,
clients, partners, and society at large’’ – American Marketing Association (AMA)
What is value?
Value – according to Adam Smith (1776):
- value-in-use: value of a commodity to an individual. (high value for people, low
price) E.g. water
- value-in-exchange: economic value; price of the product. (low value for people,
high price) E.g. gold
Customer value = perceived benefits – perceived sacrifice
perceived benefits: product, service, image, in use overtime
perceived sacrifice: costs; financial, time, energy, psychological risk (risk,
uncertainty)
Types of customer value:
1. Price value (e.g., basic products for low prices)
2. Performance value (e.g., innovative products with appealing functionality
3. Emotional value (e.g., attachment to the brand)
4. Relational value (e.g., quality of the service)
Inside-out VS market-driven firms:
,Marketing myopia
• Theodore Levitt (1925-2006)
• Every major industry was once a growth industry
• When business growth is under pressure, it is almost always due to failing
management
• Defining what business you are in, is important to growth
• Product orientation instead of customer orientation
Value for firms:
• Satisfaction
• Loyalty – why long-term relationships so important?
• Acquiring new customers can cost 5 times as much
• A 5% reduction in attrition can increase profits by 25%-85%
• Loyal customer buys more
• Loyal customer more willing to try other products
• They are less price sensitive
• Positive Word-Of-Mouth (WOM)
The new marketing myopia:
Smith et al. (2010) warn for the “new marketing myopia”:
- One-sided focus on the customer
- Narrow definition of customer(needs)
- Inability to recognize the changing social context
Solution/ an alternative perspective:
Stakeholder marketing = “activities within a system of social institutions and
processes for
facilitating and maintaining value through exchange relationships with multiple
stakeholders”
‘’societal orientation’’
There are so many things that add value, what should I focus on?
Tool: Kano model
,How to create value?
- Marketing mix = 4P’s of marketing (product, place, price, promotion)
- Align the 4 P’s
- Consistency is key
Lecture 2 – what is strategy?
Strategy: The pattern of choices an organization makes, regarding the allocation
of resources and its relationship with the external environment, in order to
achieve its long-term goals.
There are 5 elements you can use to test whether a strategy is good or
not:
1. External fit -> strategy has to fit the environment
2. Internal fit -> Strategy has to fit the resources and capabilities of the
organization
3. Dynamic fit -> strategy has to adapt and be future-proof
4. Competitive advantage -> If competitors perform better than you, you will
inevitably be overtaken
5. Performance -> If you do not make a profit, you do not have a good
strategy (as a company)
Definitions of strategy:
- Michael Porter: Positioning in industry or market, determined in advance
based on thorough analysis.
- Henry Mintzberg:
o Strategy as a plan: deliberate and pre-developed plan or guideline for
future action(s)
o Strategy as ‘ploy’ (trick): (list, trick): a maneuver or tactic intended to
mislead or outsmart competitors
o Strategy as pattern: a pattern in a set of activities (whether deliberate or
not)
o Strategy as position: to take a position in a particular market or industry
by pursuing differentiation
o Strategy as perspective: a shared perspective (set of beliefs) within an
organization about reality, which translates into intentions and actions.
, Different levels of strategy:
