Marketing summary
Week 1, Lecture 1
Chapter 1 – Marketing: creating customer value and engagement
According to the book, marketing is engaging customers and managing profitable customer
relationships.
Simply put, marketing is the process of engaging customers and building profitable customer
relationships by creating value for customers and capturing value in return.
‘Marketing is not advertising, but advertising is marketing’
Marketing myopia: the mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by the products.
The primary aim of marketing: the identification of target markets and the satisfaction of
these customers, now and in the future. Looking for win-win situations. Customer and seller
both want something.
Marketing orientation: a marketing-oriented organization devotes resources to the needs and
buying behavior of customers, competitors’ activities, strategies, and of market trends and
external forces. The organization ensures its operations, personnel, and capabilities are
aligned to reflect these external drivers. Not all organizations have a marketing orientation.
Marketing: activities that facilitate and expedite satisfying exchange relationships in a
dynamic environment, through the creation, distribution, promotion and pricing of goods,
services, and ideas. It is about creating value to customers and to manage these customer
relationships. Customers’ requirements change as their needs alter, so it is a process.
Marketing environment: external changing forces within the trading environment: laws,
regulations, political activities, societal pressures, economic conditions, and technological
advances. It’s the actors and forces outside marketing that affect marketing management’s
ability to build and maintain successful relationships with target customers.
Marketing concept: the philosophy that an organization should try to provide products that
satisfy customers’ needs through a coordinated set of activities that also allows the
organization to achieve its goals. Marketing is complex because the customers are so
different. Everyone has different wants and need. A company needs to select customers that
they want to satisfy.
Value
Value for a manufacturer: value = profit = revenues – costs.
Good profit: earned from creating value that leads to customer loyalty.
Bad profit: earned at the customer’s expense.
Value for a customer: value = benefit – sacrifices
Benefits: economic, function, psychological.
Sacrifices: money, time, psychological costs, energy/effort.
Customer satisfaction: a state that occurs when an exchange meets the needs and
expectations of the buyer.
,Creating value only happens by exchange. Therefore, the goal is exchange: the provision or
transfer of goods, services, and ideas, in return for something of value.
C2C communications: consumer-to-consumer communication is now routine enabled by the
digital era and social media in particular.
Social marketing: uses tools and techniques from commercial marketing to make
interventions which encourage positive behavioral changes.
Critical marketing: involves challenging orthodox views that are central to the core
principles of the discipline.
Customer-engagement marketing: making the brand a meaningful part of consumers’
conversations and lives by fostering direct and continuous customer involvement in shaping
brand conversations, experiences, and community.
Consumer-generated marketing: brand exchanges created by consumers themselves – both
invited and uninvited – by which consumers are playing an increasing role in shaping their
own brand experiences and those of other consumers (e.g. a blog).
Customer equity: the total combined customer lifetime values of all of the company’s
customers.
Companies can classify customers in 4 groups according to their profitability and projected
loyalty:
1. Butterflies: these customers are potentially profitable, but not loyal. Good fit between the
customers’ needs and the company’s offerings. But as a butterfly, the customers are gone
swiftly.
2. True friends: both profitable and loyal. Strong fit between the customers’ needs and the
company’s offerings. A company is making continuous investments in the customer.
3. Barnacles: highly loyal, but not very profitable. Limited fit between the customers’ needs
and the company’s offerings. Not always good to have these customers, because they are
sometimes not profitable enough and therefore company might be better off without them.
4. Strangers: low potential profitability and little projected loyalty. Little fit between the
customers’ needs and the company’s offerings. Do not invest in the customers, just make
money on every transaction they make.
,Week 1, Lecture 2
Chapter 3 – Analyzing the marketing environment
Chapter 5 – Consumer markets and buyer behavior
Mission statement: addresses an organization’s purpose, goals, and scope of its operations
(long-term). Helps guide the different departments in a company.
Vision statement: a sentence or short paragraph that concisely describes the goals of a
company, nonprofit, or some other entity. It states what you are trying to build and serves as a
touchstone for your future actions.
Corporate strategy: a strategy that determines the organization’s vision and goals, and how
they should be addressed, in which markets, with what advantages over competitors, and
aligning resources in key functions accordingly across the business.
The Ansoff matrix determines competitive strategies. It analytically assesses the most
promising directions for the organizations and their marketing activity. An organization can
choose one or more competitive strategies as the basis for its strategic objectives:
1 Intense growth: when current products and markets have the potential for increasing sales.
4 main strategies to use:
- Market penetration: increasing sales of current products in current markets.
- Market development: increasing sales of current products in new markets.
- Product development: improving present products or developing new products for
current markets (risk increases).
- Diversification: the riskiest, as business tries to find new markets for new products
(riskiest).
2 Diversified growth: when new products are developed to be sold in new unfamiliar
markets. 3 forms of diversification:
- Horizontal: new products not technically related to current products introduced into
current markets; Sony diversified from electronics to movie production.
- Concentric: new products related to current products are introduced into new markets;
Apple moving into smartphones.
- Conglomerate: new products unrelated to current technology products or markets are
introduced into new markets; Samsung moved from air-conditioning to phones.
3 Integrated growth: growth that occurs in 3 possible directions:
- Forward: increased control of distribution, manufactures sells in own shops.
- Backward: increased control of supply systems, newspaper company buying paper
mill.
- Horizontal: increased control of competitors (acquisition).
Microenvironment
, Microenvironment is about the actors close to the company that affects its ability to serve its
customers. For example: the company itself, suppliers, marketing, and competitors. A
company always develops or provides value for customers, they aren’t just selling something.
It is about optimizing value for the customers. To increase the value for customers you need
the mission and value statement, they will guide how the value for customers will be
provided.
Micro marketing environment: the more company specific forces reflecting the nature of
the business, its suppliers, marketing intermediaries, buyers, all types of competitors: direct,
substitute, and new entrant and its publics. There are a few aspects mentioned above: supplier
publics, etc. In the microenvironment there is a two-way relationship between the
environment and the organization.
Macroenvironment
The larger societal forces that affect the microenvironment: demographic, economic, natural,
technological, political, and cultural forces. F.e. every culture drinks coffee in a different way.
Different cultures have different uses and need. So, look at what they want: macro.
Technology influences the way you interact with your customers and the way you give them
value. The environment changes around the company. In the macroenvironment there is a
one-way relationship going from the environment towards the organization.
Marketing environment: the external forces that directly or indirectly influence an
organization’s acquisition of inputs and generation of outputs. Macro forces: political, legal,
regulatory, societal, technological, and economic. There are also microforces, these are more
situation and organization specific.
Environmental scanning collects information about the forces in the marketing environment,
most of the time this information comes from secondary sources. There is also environmental
analysis: the process of assessing and interpreting the information gathered through
environmental scanning. In responding to environmental forces, there are 2 approaches:
1. Accept environmental forces as uncontrollable, the organization remains passive and must
be reactive towards the environment.
2. The proactive approach: believing that environment can be shaped. This approach can be
constructive and can bring results, but it is important to recognize that there are limits on how
much environmental force can be shaped.
There are 4 levels of competition (from broad to narrow) (example: drip coffee makers):
1. Budget/competition industry (household appliances).
2. Generic competition (beverage appliances).
3. Product class/category (cappuccino makers, espresso machines).
4. Product form/type (drip coffee makers).
The 6 forces:
1 Political forces
Week 1, Lecture 1
Chapter 1 – Marketing: creating customer value and engagement
According to the book, marketing is engaging customers and managing profitable customer
relationships.
Simply put, marketing is the process of engaging customers and building profitable customer
relationships by creating value for customers and capturing value in return.
‘Marketing is not advertising, but advertising is marketing’
Marketing myopia: the mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by the products.
The primary aim of marketing: the identification of target markets and the satisfaction of
these customers, now and in the future. Looking for win-win situations. Customer and seller
both want something.
Marketing orientation: a marketing-oriented organization devotes resources to the needs and
buying behavior of customers, competitors’ activities, strategies, and of market trends and
external forces. The organization ensures its operations, personnel, and capabilities are
aligned to reflect these external drivers. Not all organizations have a marketing orientation.
Marketing: activities that facilitate and expedite satisfying exchange relationships in a
dynamic environment, through the creation, distribution, promotion and pricing of goods,
services, and ideas. It is about creating value to customers and to manage these customer
relationships. Customers’ requirements change as their needs alter, so it is a process.
Marketing environment: external changing forces within the trading environment: laws,
regulations, political activities, societal pressures, economic conditions, and technological
advances. It’s the actors and forces outside marketing that affect marketing management’s
ability to build and maintain successful relationships with target customers.
Marketing concept: the philosophy that an organization should try to provide products that
satisfy customers’ needs through a coordinated set of activities that also allows the
organization to achieve its goals. Marketing is complex because the customers are so
different. Everyone has different wants and need. A company needs to select customers that
they want to satisfy.
Value
Value for a manufacturer: value = profit = revenues – costs.
Good profit: earned from creating value that leads to customer loyalty.
Bad profit: earned at the customer’s expense.
Value for a customer: value = benefit – sacrifices
Benefits: economic, function, psychological.
Sacrifices: money, time, psychological costs, energy/effort.
Customer satisfaction: a state that occurs when an exchange meets the needs and
expectations of the buyer.
,Creating value only happens by exchange. Therefore, the goal is exchange: the provision or
transfer of goods, services, and ideas, in return for something of value.
C2C communications: consumer-to-consumer communication is now routine enabled by the
digital era and social media in particular.
Social marketing: uses tools and techniques from commercial marketing to make
interventions which encourage positive behavioral changes.
Critical marketing: involves challenging orthodox views that are central to the core
principles of the discipline.
Customer-engagement marketing: making the brand a meaningful part of consumers’
conversations and lives by fostering direct and continuous customer involvement in shaping
brand conversations, experiences, and community.
Consumer-generated marketing: brand exchanges created by consumers themselves – both
invited and uninvited – by which consumers are playing an increasing role in shaping their
own brand experiences and those of other consumers (e.g. a blog).
Customer equity: the total combined customer lifetime values of all of the company’s
customers.
Companies can classify customers in 4 groups according to their profitability and projected
loyalty:
1. Butterflies: these customers are potentially profitable, but not loyal. Good fit between the
customers’ needs and the company’s offerings. But as a butterfly, the customers are gone
swiftly.
2. True friends: both profitable and loyal. Strong fit between the customers’ needs and the
company’s offerings. A company is making continuous investments in the customer.
3. Barnacles: highly loyal, but not very profitable. Limited fit between the customers’ needs
and the company’s offerings. Not always good to have these customers, because they are
sometimes not profitable enough and therefore company might be better off without them.
4. Strangers: low potential profitability and little projected loyalty. Little fit between the
customers’ needs and the company’s offerings. Do not invest in the customers, just make
money on every transaction they make.
,Week 1, Lecture 2
Chapter 3 – Analyzing the marketing environment
Chapter 5 – Consumer markets and buyer behavior
Mission statement: addresses an organization’s purpose, goals, and scope of its operations
(long-term). Helps guide the different departments in a company.
Vision statement: a sentence or short paragraph that concisely describes the goals of a
company, nonprofit, or some other entity. It states what you are trying to build and serves as a
touchstone for your future actions.
Corporate strategy: a strategy that determines the organization’s vision and goals, and how
they should be addressed, in which markets, with what advantages over competitors, and
aligning resources in key functions accordingly across the business.
The Ansoff matrix determines competitive strategies. It analytically assesses the most
promising directions for the organizations and their marketing activity. An organization can
choose one or more competitive strategies as the basis for its strategic objectives:
1 Intense growth: when current products and markets have the potential for increasing sales.
4 main strategies to use:
- Market penetration: increasing sales of current products in current markets.
- Market development: increasing sales of current products in new markets.
- Product development: improving present products or developing new products for
current markets (risk increases).
- Diversification: the riskiest, as business tries to find new markets for new products
(riskiest).
2 Diversified growth: when new products are developed to be sold in new unfamiliar
markets. 3 forms of diversification:
- Horizontal: new products not technically related to current products introduced into
current markets; Sony diversified from electronics to movie production.
- Concentric: new products related to current products are introduced into new markets;
Apple moving into smartphones.
- Conglomerate: new products unrelated to current technology products or markets are
introduced into new markets; Samsung moved from air-conditioning to phones.
3 Integrated growth: growth that occurs in 3 possible directions:
- Forward: increased control of distribution, manufactures sells in own shops.
- Backward: increased control of supply systems, newspaper company buying paper
mill.
- Horizontal: increased control of competitors (acquisition).
Microenvironment
, Microenvironment is about the actors close to the company that affects its ability to serve its
customers. For example: the company itself, suppliers, marketing, and competitors. A
company always develops or provides value for customers, they aren’t just selling something.
It is about optimizing value for the customers. To increase the value for customers you need
the mission and value statement, they will guide how the value for customers will be
provided.
Micro marketing environment: the more company specific forces reflecting the nature of
the business, its suppliers, marketing intermediaries, buyers, all types of competitors: direct,
substitute, and new entrant and its publics. There are a few aspects mentioned above: supplier
publics, etc. In the microenvironment there is a two-way relationship between the
environment and the organization.
Macroenvironment
The larger societal forces that affect the microenvironment: demographic, economic, natural,
technological, political, and cultural forces. F.e. every culture drinks coffee in a different way.
Different cultures have different uses and need. So, look at what they want: macro.
Technology influences the way you interact with your customers and the way you give them
value. The environment changes around the company. In the macroenvironment there is a
one-way relationship going from the environment towards the organization.
Marketing environment: the external forces that directly or indirectly influence an
organization’s acquisition of inputs and generation of outputs. Macro forces: political, legal,
regulatory, societal, technological, and economic. There are also microforces, these are more
situation and organization specific.
Environmental scanning collects information about the forces in the marketing environment,
most of the time this information comes from secondary sources. There is also environmental
analysis: the process of assessing and interpreting the information gathered through
environmental scanning. In responding to environmental forces, there are 2 approaches:
1. Accept environmental forces as uncontrollable, the organization remains passive and must
be reactive towards the environment.
2. The proactive approach: believing that environment can be shaped. This approach can be
constructive and can bring results, but it is important to recognize that there are limits on how
much environmental force can be shaped.
There are 4 levels of competition (from broad to narrow) (example: drip coffee makers):
1. Budget/competition industry (household appliances).
2. Generic competition (beverage appliances).
3. Product class/category (cappuccino makers, espresso machines).
4. Product form/type (drip coffee makers).
The 6 forces:
1 Political forces
