Week 1 – hc 1+2 H1: Defining marketing and the marketing process
LO1.1: define marketing and outline the steps in the marketing process
Marketing = the process by which companies engage customers, build strong customer relationships
and create customer value to capture value from the customers in return
o Broad marketing: process by which companies obtain what they need and want
through creating & exchanging value with others
o Narrow marketing: building profitable, value-laden, exchange relationships with
customers
not only ‘telling & selling’, but also satisfying customer needs
- Marketing process: creating and capturing customer value
o First 4 steps are about understanding customers, creating customer value and
building strong customer relationships
o The last step is when companies reap the rewards from creating the good customer
value
LO1.2: explain the importance of understanding the marketplace and customers and identify the 5
core marketplace concepts
Step 1 of the marketing process: understand customer needs and wants and the marketplace in
which they operate
5 core customer and marketplace concepts
1. Customer needs, wants & demands
o Needs = states of felt deprivation (Maslow’s pyramid of needs)
o Wants = the form “human needs” take as they are shaped by
culture and indivual personality (need food, want sushi)
o Demands = human wants what are backed by buying power
2. Market offerings – some combination of products, services, information
or experiences offered to a market to satisfy a need or a want
o Marketing myopia = the mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by these products
(like focussing too much on their products/services rather than understanding the
needs & wants from customers missed opportunities) if a new product is
introduced that is better/cheaper, the customer has the same needs, but wants the
new product
, 3. Customer value and satisfaction -- key to manage customer relationships
o Customer value = customers perceived expectations about the value of a
product/service is what helps them choose among the broad array of market
offerings
o Customer satisfaction = satisfied customers are likely to buy again and share good
experiences
Set the right level of expectations:
Too low expectations not attracting enough buyers
Too high expectations buyers will be dissapointed
4. Exchanges and relationships – marketing consists of actions to create, maintain and grow
desirable exchange relationsihps by consistently delivering superior customer value
o Exchange = the act of obtaining a desired object form someone by offering something
in return
5. Markets – the set of actual and potential buyers of a product or service (the buyers share a
particular need/want that can be satisfied through exchange relationships
Marketing system
o Company & competitors interact with customers and try to understand their needs &
wants (see double arrows)
o Company & competitors create and exchange market offerings, messages and other
marketing content with customers, directly OR through marketing intermediaries
o All parties in the system are affected by major environmental forces (demographics,
economic, natural, technological, political, social/cultural)
- Two-way affair of marketing: at a present day, marketing is not just about how marketeers
influence customers, but also about how customers influence the company and others
LO1.3 identify the key elements of a customer value-driven marketing strategy and discuss the
marketing management orientations that guide marketing strategy
Step 2 of marketing process: decide which customers to serve and how to bring them value
creating customer value-driven marketing strategy and plan
- Marketing management = the art of choosing target markets and building profitable
relationships with them
, o The marketing manager’s aim is to engage, keep and grow target customers by
creating, delivering and communicating superior customer value
o = customer management and demand management
- Designing a winning marketing strategy
o What customers will we serve? Target market
o How can we serve these customers the best? Value proposition
- Selecting customers to serve – companies must select only customers that they can serve
well and profitably, moreover, marketing managers must decide: level, timing & nature of
their target market’s demand
o Market segmentation = dividing the markets into segments of customers
o Target market = selecting which segment to go after
- Selecting a value proposition = set of benefits/values it promises to deliver to consumers to
satisfy their needs, so how to differentiate and position the company in the marketplace
compared to others
- Marketing management orientations – 5 concepts that companies use to design and carry
out their marketing strategies
1. The production concept = the idea that consumers will favor products that are available
and highly affordable focus on improving production and distribution efficiency
(may lead to marketing myopia, focusing too narrowly on own operations
and losing sight of the real objective)
2. Product concept = the idea that consumers will favor products that offer the most
quality, performance and innovative features focus on continuous product
improvement
(may lead to marketing myopia because a better product may not always be
the solution that customers are looking for)
3. The selling concept = the idea that consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effect focus on tracking down
potential buyers and convincing them to buy the product
o Sells what the company makes, rather than what the market wants
Practices within companies that sell unsought goods (product buyers don’t
normally think of buying)
Focuses on creating sales transactions rather than building-long-term,
profitable customer relationships = downside
4. The marketing concept = the idea that organizational goals depend on knowing the
needs and wants of target markets and delivering the desired satisfaction better than
competitors do focus on finding the right products for your customers
o Customer-centered sense-and-respond philosophy (compared to the product-
centered make-and-sell philosophy)
o Requires clear customer needs (=downside), customers mostly don’t even know what
they want
o Customer-driving market = understanding customer needs even better than
customers themselves do and creating products and services that meet both existing
and latent (hidden) needs, now, and in the future
, 5. The societal marketing concept = the idea that marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and society’s well-
being
o Questions whether pure marketing concept overlooks possible conflicts between
consumer short-run wants and consumer long-run welfare wants socially &
environmentally responsible marketing that meets the present needs of consumers
and businesses, while also preserving or enhancing the ability of future generations
to meet their needs
o Shared value = creating economic value in a way that
also creates value for society
Companies should balance 3 considerations:
company profits, consumer wants and
society’s interests
Comparing the selling & marketing concept:
- Selling concept
o Inside-out perspective
o Focus on company’s existing products and then heavily selling and promoting the
product
- Marketing concept
o Outside-in perspective
o Starting with well-defined market, focusing on customer needs and creating
relationships with right customers based on value and satisfaction
- Marketing strategy: outlines which target market and value proposition
- Marketing program: actually, deliver the intended value to target customers by using the
firm’s marketing mix (3rd step in marketing process)
- Marketing mix // four P’s of marketing:
1. Product – create need-satisfying market offering
2. Price – decide how much to charge for the offering
3. Place – how to make the offering available to target customers
4. Promotion – engage target consumers, communicate about the offering and
persuade consumers of the offer’s merits
LO1.4 discuss customer relationship management and identify strategies for creating value for
customers and capturing value from customers in return
Step 4 of marketing process: engaging customers and managing profitable customer relationships
(Customer Relationship Management (CRM))
LO1.1: define marketing and outline the steps in the marketing process
Marketing = the process by which companies engage customers, build strong customer relationships
and create customer value to capture value from the customers in return
o Broad marketing: process by which companies obtain what they need and want
through creating & exchanging value with others
o Narrow marketing: building profitable, value-laden, exchange relationships with
customers
not only ‘telling & selling’, but also satisfying customer needs
- Marketing process: creating and capturing customer value
o First 4 steps are about understanding customers, creating customer value and
building strong customer relationships
o The last step is when companies reap the rewards from creating the good customer
value
LO1.2: explain the importance of understanding the marketplace and customers and identify the 5
core marketplace concepts
Step 1 of the marketing process: understand customer needs and wants and the marketplace in
which they operate
5 core customer and marketplace concepts
1. Customer needs, wants & demands
o Needs = states of felt deprivation (Maslow’s pyramid of needs)
o Wants = the form “human needs” take as they are shaped by
culture and indivual personality (need food, want sushi)
o Demands = human wants what are backed by buying power
2. Market offerings – some combination of products, services, information
or experiences offered to a market to satisfy a need or a want
o Marketing myopia = the mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by these products
(like focussing too much on their products/services rather than understanding the
needs & wants from customers missed opportunities) if a new product is
introduced that is better/cheaper, the customer has the same needs, but wants the
new product
, 3. Customer value and satisfaction -- key to manage customer relationships
o Customer value = customers perceived expectations about the value of a
product/service is what helps them choose among the broad array of market
offerings
o Customer satisfaction = satisfied customers are likely to buy again and share good
experiences
Set the right level of expectations:
Too low expectations not attracting enough buyers
Too high expectations buyers will be dissapointed
4. Exchanges and relationships – marketing consists of actions to create, maintain and grow
desirable exchange relationsihps by consistently delivering superior customer value
o Exchange = the act of obtaining a desired object form someone by offering something
in return
5. Markets – the set of actual and potential buyers of a product or service (the buyers share a
particular need/want that can be satisfied through exchange relationships
Marketing system
o Company & competitors interact with customers and try to understand their needs &
wants (see double arrows)
o Company & competitors create and exchange market offerings, messages and other
marketing content with customers, directly OR through marketing intermediaries
o All parties in the system are affected by major environmental forces (demographics,
economic, natural, technological, political, social/cultural)
- Two-way affair of marketing: at a present day, marketing is not just about how marketeers
influence customers, but also about how customers influence the company and others
LO1.3 identify the key elements of a customer value-driven marketing strategy and discuss the
marketing management orientations that guide marketing strategy
Step 2 of marketing process: decide which customers to serve and how to bring them value
creating customer value-driven marketing strategy and plan
- Marketing management = the art of choosing target markets and building profitable
relationships with them
, o The marketing manager’s aim is to engage, keep and grow target customers by
creating, delivering and communicating superior customer value
o = customer management and demand management
- Designing a winning marketing strategy
o What customers will we serve? Target market
o How can we serve these customers the best? Value proposition
- Selecting customers to serve – companies must select only customers that they can serve
well and profitably, moreover, marketing managers must decide: level, timing & nature of
their target market’s demand
o Market segmentation = dividing the markets into segments of customers
o Target market = selecting which segment to go after
- Selecting a value proposition = set of benefits/values it promises to deliver to consumers to
satisfy their needs, so how to differentiate and position the company in the marketplace
compared to others
- Marketing management orientations – 5 concepts that companies use to design and carry
out their marketing strategies
1. The production concept = the idea that consumers will favor products that are available
and highly affordable focus on improving production and distribution efficiency
(may lead to marketing myopia, focusing too narrowly on own operations
and losing sight of the real objective)
2. Product concept = the idea that consumers will favor products that offer the most
quality, performance and innovative features focus on continuous product
improvement
(may lead to marketing myopia because a better product may not always be
the solution that customers are looking for)
3. The selling concept = the idea that consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effect focus on tracking down
potential buyers and convincing them to buy the product
o Sells what the company makes, rather than what the market wants
Practices within companies that sell unsought goods (product buyers don’t
normally think of buying)
Focuses on creating sales transactions rather than building-long-term,
profitable customer relationships = downside
4. The marketing concept = the idea that organizational goals depend on knowing the
needs and wants of target markets and delivering the desired satisfaction better than
competitors do focus on finding the right products for your customers
o Customer-centered sense-and-respond philosophy (compared to the product-
centered make-and-sell philosophy)
o Requires clear customer needs (=downside), customers mostly don’t even know what
they want
o Customer-driving market = understanding customer needs even better than
customers themselves do and creating products and services that meet both existing
and latent (hidden) needs, now, and in the future
, 5. The societal marketing concept = the idea that marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and society’s well-
being
o Questions whether pure marketing concept overlooks possible conflicts between
consumer short-run wants and consumer long-run welfare wants socially &
environmentally responsible marketing that meets the present needs of consumers
and businesses, while also preserving or enhancing the ability of future generations
to meet their needs
o Shared value = creating economic value in a way that
also creates value for society
Companies should balance 3 considerations:
company profits, consumer wants and
society’s interests
Comparing the selling & marketing concept:
- Selling concept
o Inside-out perspective
o Focus on company’s existing products and then heavily selling and promoting the
product
- Marketing concept
o Outside-in perspective
o Starting with well-defined market, focusing on customer needs and creating
relationships with right customers based on value and satisfaction
- Marketing strategy: outlines which target market and value proposition
- Marketing program: actually, deliver the intended value to target customers by using the
firm’s marketing mix (3rd step in marketing process)
- Marketing mix // four P’s of marketing:
1. Product – create need-satisfying market offering
2. Price – decide how much to charge for the offering
3. Place – how to make the offering available to target customers
4. Promotion – engage target consumers, communicate about the offering and
persuade consumers of the offer’s merits
LO1.4 discuss customer relationship management and identify strategies for creating value for
customers and capturing value from customers in return
Step 4 of marketing process: engaging customers and managing profitable customer relationships
(Customer Relationship Management (CRM))
