Book: Marketing & Creating Value - Chap. 1
WHAT IS MARKETING?
Marketing is engaging customers and managing profitable customer relationships. The
twofold goal of marketing is to attract new customers by promising superior value and to
keep and grow current customers by delivering value and satisfaction.
But in recent years, marketers have assembled a host of new marketing approaches,
everything from imaginative websites and smart-phone apps to online videos and social
media. These new approaches do more than just blast out messages to the masses. They
reach you directly, personally, and interactively. Today's marketers want to become a part
of your life and enrich your experiences with their brands. They want to help you live their
brands.
DEFINITION
Broadly defined, marketing is a social and managerial process by which individuals and
organizations obtain what they need and want through creating and exchanging value with
others. In a narrower business context, marketing involves building profitable, value-laden
exchange relationships with customers. Hence, we define marketing as the process by which
companies engage customers, build strong customer relationships, and create customer value
in order to capture value from customers in return.
THE MARKETING PROCESS
It presents a simple, five-step model of the marketing process for creating and capturing
customer value. In the first four steps, companies work to understand consumers, create
customer value, and build strong customer relationships. In the final step, companies reap
the rewards of creating superior customer value. By creating value for consumers, they in
turn capture value from consumers in the form of sales, profits, and long-term customer
equity.
,UNDERSTANDING THE MARKETPLACE & CUSTOMERS NEEDS
As a first step, marketers need to understand customer needs and wants and the
marketplace in which they operate. We examine five core customer and marketplace
concepts:
1. Needs, wants, and demands
2. Market offerings (products, services, and experiences)
3. Value and satisfaction
4. Exchanges and relationships
5. Markets
CUSTOMER NEEDS, WANTS AND DEMANDS
• Needs: Human needs are states of felt deprivation. They include basic physical needs
for food, clothing, warmth, and safety; social needs for belonging and affection; and
individual needs for knowledge and self-expression. Marketers did not create these
needs; they are a basic part of the human makeup.
• Wants: are the form human needs take as they are shaped by culture and individual
personality. An American needs food but wants a Big Mac, fries, and a soft drink.
• Demands: When backed by buying power, wants become demands. Given their
wants and resources, people demand products and services with benefits that add up
to the most value and satisfaction.
Companies go to great lengths to learn about and understand customer needs, wants, and
demands. They conduct consumer research, analyze mountains of customer data, and
observe customers as they shop and interact, offline and online. People at all levels of the
company—including top management—stay close to customers.
MARKET OFFERINGS: PRODUCTS, SERVICES & EXPERIENCES
Consumers' needs and wants are fulfilled through market offerings—some combination of
products, services, information, or experiences offered to a market to satisfy a need or a
want. Market offerings are not limited to physical products. They also include services—
activities or benefits offered for sale that are essentially intangible and do not result in the
ownership of anything.
, More broadly, market offerings also include other entities, such as persons, places,
organizations, information, ideas, and causes.
Many sellers make the mistake of paying more attention to the specific products they offer
than to the benefits and experiences produced by these products. These sellers suffer from
marketing myopia. They are so taken with their products that they focus only on existing
wants and lose sight of underlying customer needs. They forget that a product is only a tool
to solve a consumer problem.
Smart marketers look beyond the attributes of the products and services they sell. By
orchestrating several services and products, they create brand experiences for consumers.
CUSTOMER VALUE & SATISFACTION
Customers form expectations about the value and satisfaction that various market offerings
will deliver and buy accordingly. Satisfied customers buy again and tell others about their
good experiences. Dissatisfied customers often switch to competitors and disparage the
product to others.
Marketers must be careful to set the right level of expectations. If they set expectations too
low, they may satisfy those who buy but fail to attract enough buyers. If they set
expectations too high, buyers will be disappointed. Customer value and customer satisfaction
are key building blocks for developing and managing customer relationships.
EXCHANGE & RELATIONSHIPS
Marketing occurs when people decide to satisfy their needs and wants through ex- change
relationships. Exchange is the act of obtaining a desired object from someone by offering
something in return. In the broadest sense, the marketer tries to bring about a response to
some market offering. The response may be more than simply buying or trading products
and services.
Marketing consists of actions taken to create, maintain, and grow desirable exchange
relationships with target audiences involving a product, service, idea, or other object.
Companies want to build strong relationships by consistently delivering superior customer
value.
MARKETS
WHAT IS MARKETING?
Marketing is engaging customers and managing profitable customer relationships. The
twofold goal of marketing is to attract new customers by promising superior value and to
keep and grow current customers by delivering value and satisfaction.
But in recent years, marketers have assembled a host of new marketing approaches,
everything from imaginative websites and smart-phone apps to online videos and social
media. These new approaches do more than just blast out messages to the masses. They
reach you directly, personally, and interactively. Today's marketers want to become a part
of your life and enrich your experiences with their brands. They want to help you live their
brands.
DEFINITION
Broadly defined, marketing is a social and managerial process by which individuals and
organizations obtain what they need and want through creating and exchanging value with
others. In a narrower business context, marketing involves building profitable, value-laden
exchange relationships with customers. Hence, we define marketing as the process by which
companies engage customers, build strong customer relationships, and create customer value
in order to capture value from customers in return.
THE MARKETING PROCESS
It presents a simple, five-step model of the marketing process for creating and capturing
customer value. In the first four steps, companies work to understand consumers, create
customer value, and build strong customer relationships. In the final step, companies reap
the rewards of creating superior customer value. By creating value for consumers, they in
turn capture value from consumers in the form of sales, profits, and long-term customer
equity.
,UNDERSTANDING THE MARKETPLACE & CUSTOMERS NEEDS
As a first step, marketers need to understand customer needs and wants and the
marketplace in which they operate. We examine five core customer and marketplace
concepts:
1. Needs, wants, and demands
2. Market offerings (products, services, and experiences)
3. Value and satisfaction
4. Exchanges and relationships
5. Markets
CUSTOMER NEEDS, WANTS AND DEMANDS
• Needs: Human needs are states of felt deprivation. They include basic physical needs
for food, clothing, warmth, and safety; social needs for belonging and affection; and
individual needs for knowledge and self-expression. Marketers did not create these
needs; they are a basic part of the human makeup.
• Wants: are the form human needs take as they are shaped by culture and individual
personality. An American needs food but wants a Big Mac, fries, and a soft drink.
• Demands: When backed by buying power, wants become demands. Given their
wants and resources, people demand products and services with benefits that add up
to the most value and satisfaction.
Companies go to great lengths to learn about and understand customer needs, wants, and
demands. They conduct consumer research, analyze mountains of customer data, and
observe customers as they shop and interact, offline and online. People at all levels of the
company—including top management—stay close to customers.
MARKET OFFERINGS: PRODUCTS, SERVICES & EXPERIENCES
Consumers' needs and wants are fulfilled through market offerings—some combination of
products, services, information, or experiences offered to a market to satisfy a need or a
want. Market offerings are not limited to physical products. They also include services—
activities or benefits offered for sale that are essentially intangible and do not result in the
ownership of anything.
, More broadly, market offerings also include other entities, such as persons, places,
organizations, information, ideas, and causes.
Many sellers make the mistake of paying more attention to the specific products they offer
than to the benefits and experiences produced by these products. These sellers suffer from
marketing myopia. They are so taken with their products that they focus only on existing
wants and lose sight of underlying customer needs. They forget that a product is only a tool
to solve a consumer problem.
Smart marketers look beyond the attributes of the products and services they sell. By
orchestrating several services and products, they create brand experiences for consumers.
CUSTOMER VALUE & SATISFACTION
Customers form expectations about the value and satisfaction that various market offerings
will deliver and buy accordingly. Satisfied customers buy again and tell others about their
good experiences. Dissatisfied customers often switch to competitors and disparage the
product to others.
Marketers must be careful to set the right level of expectations. If they set expectations too
low, they may satisfy those who buy but fail to attract enough buyers. If they set
expectations too high, buyers will be disappointed. Customer value and customer satisfaction
are key building blocks for developing and managing customer relationships.
EXCHANGE & RELATIONSHIPS
Marketing occurs when people decide to satisfy their needs and wants through ex- change
relationships. Exchange is the act of obtaining a desired object from someone by offering
something in return. In the broadest sense, the marketer tries to bring about a response to
some market offering. The response may be more than simply buying or trading products
and services.
Marketing consists of actions taken to create, maintain, and grow desirable exchange
relationships with target audiences involving a product, service, idea, or other object.
Companies want to build strong relationships by consistently delivering superior customer
value.
MARKETS
