Summary Marketing
Ch. 1: Marketing: creating customer value & engagement
Def. Marketing (by Philip Kotler): Marketing is the set of activities by which companies acquire and
engage customers, build strong customer relationships, and create customer value to capture value
from customers in return.
à key elements: 1) engaging customers and
2) managing profitable customer relationships
à goals: 1) attract new customers (by promising value)
2) keep and grow existing customers (by delivering promised value)
3) help drive company profitability (by capturing value)
Marketing ¹ Sales
-> marketing is long-term <-> sales is short-term
Marketing ¹ Advertising
-> Advertising is a small piece of marketing
The Marketing Process: à
Ch 1.2 The marketplace & customer needs
Needs, wants, and demands
à needs: States of felt deprivation, feeling of something missing, tension current and ideal state, eg.
food, water, …
à marketing myopia: an approach to marketing that focuses on the product and short-term needs of
the business, rather than long-term needs of customers.
à better mousetrap: a better version of a product proven to have a huge demand, its fallacy is
believing that a better version will always be a success.
à wants: needs shaped by culture and personality, needs get specific, a need described as an object
that will satisfy those needs, eg. A certain smartphone, …
à demands: wants backed by buying power, depends on willingness to pay, market conditions, and
affordability, eg. an iPhone, a luxury vacation, …
Market offerings: products, services, and experiences
à market offerings: everything to satisfy a need/ want that is available on the market, eg. Product,
service, experience, …
a market = all actual and potential buyers of a product/ service/ …
à marketing system: all parties in the system add value and are in
relation with each other à
1
,Ch 1.3 A customer value-driven marketing strategy
How to design a customer value-driven marketing strategy
1) Selecting customers to serve (STP Ch 7)
2) Choosing a value proposition (STP Ch 7)
3) Marketing management orientations
Def. Marketing management: the art & science of choosing target markets and building profitable
relationships with them.
Marketing orientations
Def. ^ = marketing management concepts: concepts under which organizations design and carry out
their marketing strategies to engage target customers and build profitable relationships with them.
- Production concept (production) (1900) Old
- Product concept (quality) (1915)
- Selling concept (sales & marketing) (1930)
- Marketing concept (customer needs) (1960)
- Societal marketing concept (customer needs & environment) New
• Production concept:
à thinks that companies who produce efficiently automatically have success in the market
à focuses on improving production & distribution efficiency
à demand > supply + product available & highly affordable
à ! marketing myopia !
Eg. Shein, McDonald’s, Amazonbasics, …
• Product concept:
à thinks customers need product quality
à products with the best quality, performance, and innovative features
à continuous product improvements
à ! marketing myopia + better mousetrap fallacy !
Eg. iPhone, Dyson Airwrap, …
• Selling concept:
à large-scale selling and promotion efforts to give a
push to customers
à focuses on aggressive selling & existing products(! Marketing myopia !)
à selling unsought goods, products we don’t think of buying
Eg. Life insurance, fire extinguisher, …
• Marketing concept:
à from the outside => in perspective
à focusses on the customer needs => happy
customers = profit
à delivers satisfaction better than the competition
à adding value is key
Eg. Netflix, Disney(land), …
• Societal marketing concept:
à = marketing concept version Plus/Pro
à focuses on ST customers wants & LT customers well-being
Eg. Carrots at McDonald’s, reusing towels at hotels
2
,Ch 1.4 An integrated marketing plan
From marketing strategy to action
Def. marketing mix: a set of marketing tools the firm uses to implement its marketing strategy. It’s
used to work tactically, consists of the 4 P’s of marketing, and should work together.
4 P’s: - Product: a need-satisfying market offering,
- Price: how much we charge for the offering,
- Place: how/ where the offering is available,
- Promotion: communicate about the offering, the core message.
Ch 1.5 Engaging customers & managing customer relationships
Customer Relationship Management (CRM)
Def. ^: the overall process of building & maintaining profitable customer relationships by delivering
superior customer value & satisfaction
à they use data to get to know the customers and enhance good/ personalized services
à will target specific persons and/or locations
à uses loyalty programs so satisfied customers can give the company a larger share of their business
Customer-perceived value: the customer’s evaluation of the difference between all the benefits and
all the costs of a market offering, relative to those of competitive offerings -> changes between customers
Customer satisfaction: the degree to which a product’s perceived performance matches a buyer’s
expectations + how we deliver the products
Expextancy (dis)cofirmation theory: P(erformance) <-> E(xpectation)
- P = E è satisfied
- P < E è dissatisfied
- P > E è highly satisfied or delighted
à do not overpromise, rather underpromise and overdeliver
Customer engagement
Def. ^ marketing: making the brand a meaningful part of customers’ conversations & lives by directly
& continuously involving customers in shaping brand conversations, experiences, and community
à marketing evolved: transaction-oriented -> relationship-oriented
à customer relationship management is more than stimulating (repeat) purchases
Consumer-generated marketing
Def. ^: brand exchanges created by consumers themselves, invited and uninvited, where consumers
increasingly shape their own and others’ brand experiences
Ch 1.6 Capturing value from consumers
Customer loyalty and retention
à Cost of customer acquisition >> Cost of customer retention
Def. Acquisition: the total expense of the company to gain a new customer
Retention: the total investment the company makes to keep existing customers
Customer lifetime value (CLV): the value of everything a customer purchases over a lifetime
Customer equity: the sum of all the CLV’s of all the company’s current and potential customers. It’s a
measure of the future value of the customer base
à manage CLV and customer equity carefully; not all customers are good investments
è Some are loyal but unprofitable, other sare disloyal and profitable
3
, Ch. 2: Company & marketing strategy: partnering to build customer
engagement, value, and relationships
Ch 2.1 Company-wide strategic planning: defining marketing’s role
Strategic planning process
Def. strategic planning: process of developing & maintaining a profitable alignment between an
organization’s goals and capabilities and its evolving marketing opportunities, the firm chooses for
long-term planning
Strategic planning process: The process of continuously matching a company’s objectives and
capabilities with changing external opportunities and threats
Levels of planning: - concern/ company level (-> high level of planning), eg: Nestlé
- strategic business unit-level (-> mini company in the company), eg: coffee, pet food
- product/ market-combinations, eg: Gourmet
Mission (= the overarching goal + start of strategic planning)
à should be clearly stated, motivating & meaningfull, focus on customers & societal benefits
Def. mission statement: a statement of the organization’s purpose, what it wants to accomplish in
the larger environment, should be market-oriented
à start from basic needs of the market: not in terms of products but of customer needs
Objectives and goals
Def. setting ^: turning the broad mission into detailed supporting objectives for each level of
management and giving them the responsibility to reach them
à business objectives: build profitable customer relationships, invest in research, improve profits, …
+ lead to a hierarchy of objectives, including marketing objectives
à marketing objectives: increase market share, create local partnerships, increase promotion, …
+ support the mission and the business objectives through marketing strategies
Ch 2.2 Designing the business portfolio
Analyzing the current business portfolio
Def. business portfolio: a collection of businesses and products that make up the company
Portfolio analysis: activity in strategic planning where management evaluates & plans for the future of
the business portfolio
Planning methods:
- Defining the business activities: business definition model, market definition of current activities,
seeing possible new directions of growth è Abell diagram
- Analyzing current business scope: portfolio analysis, deciding on what SBUs receive the
same/more/less budget allocation è BCG Matrix
- Developing growth strategies: determining what new products/services and markets are added to
the current business scope è Ansoff matrix
4
Ch. 1: Marketing: creating customer value & engagement
Def. Marketing (by Philip Kotler): Marketing is the set of activities by which companies acquire and
engage customers, build strong customer relationships, and create customer value to capture value
from customers in return.
à key elements: 1) engaging customers and
2) managing profitable customer relationships
à goals: 1) attract new customers (by promising value)
2) keep and grow existing customers (by delivering promised value)
3) help drive company profitability (by capturing value)
Marketing ¹ Sales
-> marketing is long-term <-> sales is short-term
Marketing ¹ Advertising
-> Advertising is a small piece of marketing
The Marketing Process: à
Ch 1.2 The marketplace & customer needs
Needs, wants, and demands
à needs: States of felt deprivation, feeling of something missing, tension current and ideal state, eg.
food, water, …
à marketing myopia: an approach to marketing that focuses on the product and short-term needs of
the business, rather than long-term needs of customers.
à better mousetrap: a better version of a product proven to have a huge demand, its fallacy is
believing that a better version will always be a success.
à wants: needs shaped by culture and personality, needs get specific, a need described as an object
that will satisfy those needs, eg. A certain smartphone, …
à demands: wants backed by buying power, depends on willingness to pay, market conditions, and
affordability, eg. an iPhone, a luxury vacation, …
Market offerings: products, services, and experiences
à market offerings: everything to satisfy a need/ want that is available on the market, eg. Product,
service, experience, …
a market = all actual and potential buyers of a product/ service/ …
à marketing system: all parties in the system add value and are in
relation with each other à
1
,Ch 1.3 A customer value-driven marketing strategy
How to design a customer value-driven marketing strategy
1) Selecting customers to serve (STP Ch 7)
2) Choosing a value proposition (STP Ch 7)
3) Marketing management orientations
Def. Marketing management: the art & science of choosing target markets and building profitable
relationships with them.
Marketing orientations
Def. ^ = marketing management concepts: concepts under which organizations design and carry out
their marketing strategies to engage target customers and build profitable relationships with them.
- Production concept (production) (1900) Old
- Product concept (quality) (1915)
- Selling concept (sales & marketing) (1930)
- Marketing concept (customer needs) (1960)
- Societal marketing concept (customer needs & environment) New
• Production concept:
à thinks that companies who produce efficiently automatically have success in the market
à focuses on improving production & distribution efficiency
à demand > supply + product available & highly affordable
à ! marketing myopia !
Eg. Shein, McDonald’s, Amazonbasics, …
• Product concept:
à thinks customers need product quality
à products with the best quality, performance, and innovative features
à continuous product improvements
à ! marketing myopia + better mousetrap fallacy !
Eg. iPhone, Dyson Airwrap, …
• Selling concept:
à large-scale selling and promotion efforts to give a
push to customers
à focuses on aggressive selling & existing products(! Marketing myopia !)
à selling unsought goods, products we don’t think of buying
Eg. Life insurance, fire extinguisher, …
• Marketing concept:
à from the outside => in perspective
à focusses on the customer needs => happy
customers = profit
à delivers satisfaction better than the competition
à adding value is key
Eg. Netflix, Disney(land), …
• Societal marketing concept:
à = marketing concept version Plus/Pro
à focuses on ST customers wants & LT customers well-being
Eg. Carrots at McDonald’s, reusing towels at hotels
2
,Ch 1.4 An integrated marketing plan
From marketing strategy to action
Def. marketing mix: a set of marketing tools the firm uses to implement its marketing strategy. It’s
used to work tactically, consists of the 4 P’s of marketing, and should work together.
4 P’s: - Product: a need-satisfying market offering,
- Price: how much we charge for the offering,
- Place: how/ where the offering is available,
- Promotion: communicate about the offering, the core message.
Ch 1.5 Engaging customers & managing customer relationships
Customer Relationship Management (CRM)
Def. ^: the overall process of building & maintaining profitable customer relationships by delivering
superior customer value & satisfaction
à they use data to get to know the customers and enhance good/ personalized services
à will target specific persons and/or locations
à uses loyalty programs so satisfied customers can give the company a larger share of their business
Customer-perceived value: the customer’s evaluation of the difference between all the benefits and
all the costs of a market offering, relative to those of competitive offerings -> changes between customers
Customer satisfaction: the degree to which a product’s perceived performance matches a buyer’s
expectations + how we deliver the products
Expextancy (dis)cofirmation theory: P(erformance) <-> E(xpectation)
- P = E è satisfied
- P < E è dissatisfied
- P > E è highly satisfied or delighted
à do not overpromise, rather underpromise and overdeliver
Customer engagement
Def. ^ marketing: making the brand a meaningful part of customers’ conversations & lives by directly
& continuously involving customers in shaping brand conversations, experiences, and community
à marketing evolved: transaction-oriented -> relationship-oriented
à customer relationship management is more than stimulating (repeat) purchases
Consumer-generated marketing
Def. ^: brand exchanges created by consumers themselves, invited and uninvited, where consumers
increasingly shape their own and others’ brand experiences
Ch 1.6 Capturing value from consumers
Customer loyalty and retention
à Cost of customer acquisition >> Cost of customer retention
Def. Acquisition: the total expense of the company to gain a new customer
Retention: the total investment the company makes to keep existing customers
Customer lifetime value (CLV): the value of everything a customer purchases over a lifetime
Customer equity: the sum of all the CLV’s of all the company’s current and potential customers. It’s a
measure of the future value of the customer base
à manage CLV and customer equity carefully; not all customers are good investments
è Some are loyal but unprofitable, other sare disloyal and profitable
3
, Ch. 2: Company & marketing strategy: partnering to build customer
engagement, value, and relationships
Ch 2.1 Company-wide strategic planning: defining marketing’s role
Strategic planning process
Def. strategic planning: process of developing & maintaining a profitable alignment between an
organization’s goals and capabilities and its evolving marketing opportunities, the firm chooses for
long-term planning
Strategic planning process: The process of continuously matching a company’s objectives and
capabilities with changing external opportunities and threats
Levels of planning: - concern/ company level (-> high level of planning), eg: Nestlé
- strategic business unit-level (-> mini company in the company), eg: coffee, pet food
- product/ market-combinations, eg: Gourmet
Mission (= the overarching goal + start of strategic planning)
à should be clearly stated, motivating & meaningfull, focus on customers & societal benefits
Def. mission statement: a statement of the organization’s purpose, what it wants to accomplish in
the larger environment, should be market-oriented
à start from basic needs of the market: not in terms of products but of customer needs
Objectives and goals
Def. setting ^: turning the broad mission into detailed supporting objectives for each level of
management and giving them the responsibility to reach them
à business objectives: build profitable customer relationships, invest in research, improve profits, …
+ lead to a hierarchy of objectives, including marketing objectives
à marketing objectives: increase market share, create local partnerships, increase promotion, …
+ support the mission and the business objectives through marketing strategies
Ch 2.2 Designing the business portfolio
Analyzing the current business portfolio
Def. business portfolio: a collection of businesses and products that make up the company
Portfolio analysis: activity in strategic planning where management evaluates & plans for the future of
the business portfolio
Planning methods:
- Defining the business activities: business definition model, market definition of current activities,
seeing possible new directions of growth è Abell diagram
- Analyzing current business scope: portfolio analysis, deciding on what SBUs receive the
same/more/less budget allocation è BCG Matrix
- Developing growth strategies: determining what new products/services and markets are added to
the current business scope è Ansoff matrix
4
