Marketing Chapter 1
Marketing- process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return
The twofold goal of marketing is to:
• attract new customers by promising superior value
• grow current customers by delivering satisfaction
Sound marketing is critical to the success of every organization:
• large for-profit firms
• not-for-profit organizations
You already know a lot about marketing—it’s all around you:
• products at your nearby shopping mall
• ads that fill your TV screen and magazines, or stuff your mailbox
• imaginative web sites and mobile phone apps
• blogs, online videos, and social media
Today’s marketers reach you directly, personally, and interactively. They want to become a part of your life and enrich your experiences with their brands—to
help you live their brands.
Understanding the marketplace and customer needs
Needs – states of felt deprivation; include physical needs for food, clothing, warm, and
safety; social needs for belonging and affection; individual needs for knowledge and sellf-
expressiom
Wants – the form human needs take as they are shaped by one’s society and are described
in terms of objects that will statisfy those needs; shaped by culture and indivudal personality
Demands – human wants are backed by buying power
Market offerings – combination of products, services, information, or experiences offered to
a market to satisfy a need or want; include other entities, such as persons, places,
organzations, information and ideas
Marketing myopia – focusing only on existing wants and losing sights of underlying
consumer needs; mistake of paying more attention tot he specific products they offer than
tot he benefits and experiences produces by these products
Marketing experience - More than just a sports bar, Buffalo Wild Wings mission is to provide
a total eating and social environment that “fuels the sports fan experience” through in-store
and online engagement. Smart marketers orchestrate several services and products, thereby
creating brand experiences for consumers.
Exchange – act of obtaining a desired object from someone by offering something in return
Marketing actions try to create, maintain, and grow desirable exchange
relationships
Marketing occurs when people decide to satisfy their needs and wants
through exchange relationships. Exchange is the act of obtaining a desired
object from someone by offering something in return. 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.
Market – set of actual and potential buyers of a product or service, these buyers share a
particular need or want that can be satisfied through exchange relationship; sellers must
search for buyers, identify their needs, design good market offerings, set prices for them,
promote them, store and deliver them; consumers engage in marketing when they search
for products, interact with companies to obtain information, make their purchases;
companies must deal with customer managed relationships as customer are empowered
and marketing is made a two-way affair
Figure 1.2 shows the main elements in a marketing system.
Each party in the system adds value for the next level and is affected by major
environmental forces (demographic, economic, natural, technological, political, and
social/cultural). Marketing means managing markets to bring about profitable customer
relationships. Activities such as consumer research, product development, communication,
distribution, pricing, and service are core marketing activities.
Buyers also carry out marketing, thus, in addition to customer relationship management,
today’s marketers must also deal effectively with customer-managed relationships.
Marketers are no longer asking only “How can we influence our customers?” but also “How
can our customers influence us?” and even “How can our customers influence each
other?”
Designing a customer value-driven marketing strategy
Marketing Management – art and science of choosing target markets and building profitable
relationships with them (what customers will we serve? – target market; how can we best
serve these customers? – value proposition); find, attract and grow target customers by
creating,delivering and communicating superior customer value
Value proposition – set of benefits or values it promises to deliver to customers to satisfy
their needs; company must decide how it will serve targeted customers – how it will
differentiate and position itself in the marketplace; it differentiate one brand from another;
,they answer the question: why should i buy your brand rather than the competitor’s?;
companies must design strong value propositions that give them the greatest advantage in
their target markets
Five value-driven Marketing Strategies
Societa
Produc Marke l
Producti Selling
t ting Marke
on concep
concep concep ting
concept t
t t concep
t
Production concept: Consumers will favor products that are available and highly affordable.
The production concept is still a useful philosophy in some situations. For example in the
highly competitive, price-sensitive Chinese market, both personal computer maker Lenovo
and home appliance maker Haier dominate through low labor costs, high production
efficiency, and mass distribution.
However, although useful in some situations, the production concept can lead to marketing
myopia and losing sight of the real objective—satisfying customer needs and building
customer relationships.
Product concept: Consumers favor products that offer the most quality, performance, and
features.
The focus is on continuous product improvements. Product quality and improvement are
important parts of most marketing strategies. However, focusing only on the company’s
products can also lead to marketing myopia. For example, some manufacturers believe that
if they can “build a better mousetrap, the world will beat a path to their doors.”
But they are often rudely shocked. Buyers may be looking for a better solution to a mouse
problem but not necessarily for a better mousetrap.
The better solution might be a chemical spray, an exterminating service, a house cat, or
something else that suits their needs even better than a mousetrap.
Selling concept: Consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort.
The selling concept is typically practiced with unsought goods—those that buyers do not
normally think of buying, such as life insurance or blood donations. These industries must be
good at tracking down prospects and selling them on a product’s benefits.
Such aggressive selling, however, carries high risks. It focuses on creating sales transactions
rather than on building long-term, profitable customer relationships.
Marketing concept: Know the needs and wants of the target markets and deliver the desired
satisfactions better than competitors.
Under the marketing concept, customer focus and value are the paths to sales and profits.
Instead of a product-centered make-and-sell philosophy, the marketing concept is a
customer-centered sense-and-respond philosophy. The job is not to find the right customers
for your product but to find the right products for your customers.
, Figure 1.3 contrasts the selling concept and the marketing concept. The selling concept takes
an inside-out perspective. It starts with the factory, focuses on the company’s existing
products, and calls for heavy selling and promotion to obtain profitable sales. It focuses
primarily on customer conquest—getting short-term sales with little concern about who
buys or why.
In contrast, the marketing concept takes an outside-in perspective. As Herb Kelleher, the
colorful founder of Southwest Airlines, once put it, “We don’t have a marketing department;
we have a customer department.”
The marketing concept starts with a well-defined market, focuses on customer needs, and
integrates all the marketing activities that affect customers. In turn, it yields profits by
creating relationships with the right customers based on customer value and satisfaction.
Societal marketing concept
-the figure shows that companies should balance three considerations in setting their
marketing strategies: company profits, consumer wants and society’s interests
Marketing- process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return
The twofold goal of marketing is to:
• attract new customers by promising superior value
• grow current customers by delivering satisfaction
Sound marketing is critical to the success of every organization:
• large for-profit firms
• not-for-profit organizations
You already know a lot about marketing—it’s all around you:
• products at your nearby shopping mall
• ads that fill your TV screen and magazines, or stuff your mailbox
• imaginative web sites and mobile phone apps
• blogs, online videos, and social media
Today’s marketers reach you directly, personally, and interactively. They want to become a part of your life and enrich your experiences with their brands—to
help you live their brands.
Understanding the marketplace and customer needs
Needs – states of felt deprivation; include physical needs for food, clothing, warm, and
safety; social needs for belonging and affection; individual needs for knowledge and sellf-
expressiom
Wants – the form human needs take as they are shaped by one’s society and are described
in terms of objects that will statisfy those needs; shaped by culture and indivudal personality
Demands – human wants are backed by buying power
Market offerings – combination of products, services, information, or experiences offered to
a market to satisfy a need or want; include other entities, such as persons, places,
organzations, information and ideas
Marketing myopia – focusing only on existing wants and losing sights of underlying
consumer needs; mistake of paying more attention tot he specific products they offer than
tot he benefits and experiences produces by these products
Marketing experience - More than just a sports bar, Buffalo Wild Wings mission is to provide
a total eating and social environment that “fuels the sports fan experience” through in-store
and online engagement. Smart marketers orchestrate several services and products, thereby
creating brand experiences for consumers.
Exchange – act of obtaining a desired object from someone by offering something in return
Marketing actions try to create, maintain, and grow desirable exchange
relationships
Marketing occurs when people decide to satisfy their needs and wants
through exchange relationships. Exchange is the act of obtaining a desired
object from someone by offering something in return. 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.
Market – set of actual and potential buyers of a product or service, these buyers share a
particular need or want that can be satisfied through exchange relationship; sellers must
search for buyers, identify their needs, design good market offerings, set prices for them,
promote them, store and deliver them; consumers engage in marketing when they search
for products, interact with companies to obtain information, make their purchases;
companies must deal with customer managed relationships as customer are empowered
and marketing is made a two-way affair
Figure 1.2 shows the main elements in a marketing system.
Each party in the system adds value for the next level and is affected by major
environmental forces (demographic, economic, natural, technological, political, and
social/cultural). Marketing means managing markets to bring about profitable customer
relationships. Activities such as consumer research, product development, communication,
distribution, pricing, and service are core marketing activities.
Buyers also carry out marketing, thus, in addition to customer relationship management,
today’s marketers must also deal effectively with customer-managed relationships.
Marketers are no longer asking only “How can we influence our customers?” but also “How
can our customers influence us?” and even “How can our customers influence each
other?”
Designing a customer value-driven marketing strategy
Marketing Management – art and science of choosing target markets and building profitable
relationships with them (what customers will we serve? – target market; how can we best
serve these customers? – value proposition); find, attract and grow target customers by
creating,delivering and communicating superior customer value
Value proposition – set of benefits or values it promises to deliver to customers to satisfy
their needs; company must decide how it will serve targeted customers – how it will
differentiate and position itself in the marketplace; it differentiate one brand from another;
,they answer the question: why should i buy your brand rather than the competitor’s?;
companies must design strong value propositions that give them the greatest advantage in
their target markets
Five value-driven Marketing Strategies
Societa
Produc Marke l
Producti Selling
t ting Marke
on concep
concep concep ting
concept t
t t concep
t
Production concept: Consumers will favor products that are available and highly affordable.
The production concept is still a useful philosophy in some situations. For example in the
highly competitive, price-sensitive Chinese market, both personal computer maker Lenovo
and home appliance maker Haier dominate through low labor costs, high production
efficiency, and mass distribution.
However, although useful in some situations, the production concept can lead to marketing
myopia and losing sight of the real objective—satisfying customer needs and building
customer relationships.
Product concept: Consumers favor products that offer the most quality, performance, and
features.
The focus is on continuous product improvements. Product quality and improvement are
important parts of most marketing strategies. However, focusing only on the company’s
products can also lead to marketing myopia. For example, some manufacturers believe that
if they can “build a better mousetrap, the world will beat a path to their doors.”
But they are often rudely shocked. Buyers may be looking for a better solution to a mouse
problem but not necessarily for a better mousetrap.
The better solution might be a chemical spray, an exterminating service, a house cat, or
something else that suits their needs even better than a mousetrap.
Selling concept: Consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort.
The selling concept is typically practiced with unsought goods—those that buyers do not
normally think of buying, such as life insurance or blood donations. These industries must be
good at tracking down prospects and selling them on a product’s benefits.
Such aggressive selling, however, carries high risks. It focuses on creating sales transactions
rather than on building long-term, profitable customer relationships.
Marketing concept: Know the needs and wants of the target markets and deliver the desired
satisfactions better than competitors.
Under the marketing concept, customer focus and value are the paths to sales and profits.
Instead of a product-centered make-and-sell philosophy, the marketing concept is a
customer-centered sense-and-respond philosophy. The job is not to find the right customers
for your product but to find the right products for your customers.
, Figure 1.3 contrasts the selling concept and the marketing concept. The selling concept takes
an inside-out perspective. It starts with the factory, focuses on the company’s existing
products, and calls for heavy selling and promotion to obtain profitable sales. It focuses
primarily on customer conquest—getting short-term sales with little concern about who
buys or why.
In contrast, the marketing concept takes an outside-in perspective. As Herb Kelleher, the
colorful founder of Southwest Airlines, once put it, “We don’t have a marketing department;
we have a customer department.”
The marketing concept starts with a well-defined market, focuses on customer needs, and
integrates all the marketing activities that affect customers. In turn, it yields profits by
creating relationships with the right customers based on customer value and satisfaction.
Societal marketing concept
-the figure shows that companies should balance three considerations in setting their
marketing strategies: company profits, consumer wants and society’s interests
