Summary Complete Summaries Of Marketing Management 214

Marketing
Management
214
2023

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Chapter
CHAPTER 1 - what is marketing
1: OVERVIEW
What is markeng?

- Philosophy/atude/perspecve and management orientaon that stresses customer
sasfacon
- Set of acvies used to implement the philosophy

Denion: the acvity, set of instuons and processes for creang, communicang,
delivering and exchanging oers that have value for customers, clients, partners and society

 Markeng means ancipang and sasfying consumer needs by means of mutually
benecial exchange processes, and doing so more eecvely than competors. Customer
sasfacon is the primary goal of markeng.

CUSTOMER SATISFACTION:
This is the feeling that a product has met or exceeded the customer’s expectaons. It can be
explained by the “disconrmaon paradigm”:




Consumer sasfacon is a customer’s response to a product or service in terms of the extent
to which consumpons meets their expectaons.

1. Measuring Customer Satisfaction

- Measurement of customer sasfacon should be a permanent, ongoing process (use
their needs and expectaons to make decisions)
- A customer-sasfacon programme should dene what customers want in respect
products/services in terms of aributes and quality level
- Informaon can be collected in many ways:
 Formal research surveys should be conducted
 Analysis of customer complaint data and interviewing sta
 Collecng informaon about needs from intermediaries (retailers, agents)




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2. Satisfaction/Dissatisfaction

What do consumers do if they are dissased with a rm or a product?

- They oen complain to other sources (other consumers or the Ombudsman), buy
less and less, stop buying altogether or switch to a competor
- Modern technology allows consumers to complain in a manner that can cause
serious harm to the rm’s brand and reputaon
- It is therefore very important for a rm to do research and assess the sasfacon of
consumers (keeping customers sased  brand loyalty)

Herzberg’s Two Factor Model:

1. Hygiene Factors: contribute to dissasfacon 
- Collecvely constute a minimum level or sasfacon and failure to meet the
minimum will cause customers to be dissased
- Example: Customers expect a hotel room to be clean  therefore, would be
dissased if it wasn’t clean but wouldn’t noce if it was (basic minimum)
2. Sasers: contribute to sasfacon 
- Once expectaons of hygiene factors have been met, sasers have the
potenal to create higher levels of sasfacon

3. Benefits

Keeping customers sased, increases the chances that they will stay loyal to the brand. The
favourable economic outcomes of customer loyalty are:

i. Lower acquision costs:
- Costs of recruing new customers (includes cost of adversing)
- A rm with a large, loyal customer base does not need to generate as many
new customers to sustain protability
ii. Base prot:
- Prot on charging a higher price for basic purchases
- Longer a rm keeps customers loyal, the longer it earns a base prot
iii. Revenue growth:
- Revenue per customer grows if a rm can retain loyalty
iv. Cost savings:
- Collaborave learning between the customer and the rm creates
producvity advantages that directly translate into lower costs
v. Referrals:
- Sased customers recommend a rm/brand to others (word-of-mouth)
vi. Price premiums:
- Loyal customers tend to be less price-sensive when they feel like they’re
geng superior value (less likely to respond to competors)




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CONCEPT OF EXCHANGE:
Exchange means that a person (buyer) gives up something of value to a seller to receive
something in return. Usually, money is thought to be a ‘medium of exchange’ as a buyer
‘gives up’ money to get a product/service.

Five Condions of Exchange:

1. At least two pares (buyer and seller)
2. Each party must have something the other party values
3. Each party must be able to communicate and deliver
4. Freedom to accept or reject an oer
5. One party must want to deal with the other party

Exchange will not necessarily take place if all these condions exist, but they are necessary
in order for exchange to be possible.

Exchange of value (buying and selling) leads to benets for both pares in terms of income
for the seller and need sasfacon for the buyer.

MARKETING PHILOSOPHIES
1. Producon Orientaon:
- Philosophy that focuses on the internal producon or manufacturing
capabilies of a rm
- Management assesses the rm’s internal resources
- When compeon is weak or demand > supply, a producon-orientated rm
survives and prospers
2. Product Orientaon:
- Firms believe that they will be successful if they manufacture good-quality
products (with special product features)
- Not focused on consumer needs or acvies of competors
3. Sales Orientaon:
- Based on the idea that people will buy more goods/services if aggressive sales
techniques are used (high sales volumes = high prots)
- Lack of understanding the needs and wants of consumers = fundamental
problem
4. Consumer Orientaon:
- Based on the knowledge that a sale depends on a thorough understanding of
consumers’ needs (buy products because of the need-sasfying properes
they possess)
- Philosophy referred to as the ‘markeng concept’:
 Customer sasfacon (needs and wants)  key to successful
markeng




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