Marketing
ECB2MKT
Utrecht University
Book Summary
,Week 1: The role of marketing in society.
Chapter 1
What is marketing?
- Essence: marketing is value creation, and =/= trickery
- Facilitate the return of customers through creating long-term satisfaction vs. short-
term deception.
o Purpose of business: create and keep customers (at a profit)
o Two central functions; marketing and innovation
- Four implications
o Marketing is central to business success.
o Marketing’s purpose is not to chase any customer at a price (other measures are
equally important for profit)
o Investment required to attract customers is higher than the amount needed to
retain existing customers.
o Most markets characterized by intense competition – org needs to understand
what competitors provide.
- Marketing is a form of exchange.
The modern marketing concept: achievement of corporate goals through meeting and
exceeding customer needs and expectations better than competition. Three conditions:
- Customer orientation, integrated effort and goal achievement all in the end to facilitate
customer satisfaction.
Marketing orientation in a changing world
- Marketing orientation (prioritise identifying consumer needs and creating satisfactory
products). Changing needs = opportunities which drive the company
- Basic elements in marketing orientation
o Customer needs
o Potential market opportunities
o Marketing products and services
o Customers
- Basic elements in production orientation
o Production capabilities
o Manufacture product
o Aggressive sales effort
o Customers
,Commodity vs non-commodity business
- Commodity business: marketing orientation and business performance is U-shaped.
o Low and high market orientation business performing best in terms of
profitability, over mid-range.
- Non-commodity business: relationship is linear.
Understanding market-driven business (MDB)
- Evaluate how products/services are being evaluated against those of competition.
- Marketing and service mix matches choice criteria that the customers use and are
better than those of their competitors.
- MDB key feature: recognition that marketing research expenditure is an investment
that can yield rewards (better customer understanding + competitive advantage)
- MDB vs Internally Driven Business
o MDB – marketing research is an investment.
o IDB – marketing research seen as a non-productive intangible. Prefers to rely on
anecdotes and received wisdom. Tends to ignore competition.
IDB rewards timeserving and ability to not make mistakes.
Results in risk avoidance and continuance of the status quo
- Intensive competition means marketing-driven companies should respond quick to
latent markets.
o Innovate, manufacture and distribute rapidly before strategic window of
opportunity closes.
o MDB vs IDB. MDB is effective and efficient whereas IDB is only efficient.
Efficiency: concerned with inputs and outputs. Economical production.
Benefit: Cost per unit/output is low. Potential to offer low prices to
gain market share / medium-high prices achieves high profit
margins.
Effectiveness: doing things right. Operating in attractive markets and
making products customers want to buy.
o Cost-focused vs customer focused.
Marketing benefits:
- Four key benefits arise from using marketing as a philosophy.
- Customer value – meet/exceed needs better than competitors, attract/retain,
dependent on customer perception of benefits associated with purchase of product.
, - Customer satisfaction – products performance vs. buyer expectations, todays world =
performance should exceed expectations = commercial success
- Customer loyalty – high commitment to relationship with customer can be maximized
by three opportunities.
o Facilitate ‘passion driven behaviour’.
o Build brands that engender self-brand integration.
o Create positive emotional connections.
- Long-term customer relationships – enhances productivity and allows firm and
customers to develop mutual cooperation.
Marketing planning – functions at two levels
- Business level – focus is strategic in nature and involves performing multiple analyses.
- Product/service level – focus on practical application of marketing.
- Marketing and services mix. Customer has a key role when deploying marketing
tactically.
- Tactical marketing
o Deployment of marketing mix
o 4 P’s
Product
Price
Promotion
Place
- Growth of services industries has given rise to extended marketing mix – 7 P’s – added
people, physical evidence and process.
Marketing implementation
- Focus on actions. Who does what? What strategy employed. Where do things happen.
What takes place.
Marketing managers should be aware of the following issues.
- Marketing concept as an ideology (not only satisfy customer needs, can overshadow
business/ethical considerations)
- Marketing as society (influence on society shaping behaviour and trends (far reaching
impacts on business)
- Marketing as a constraint on innovation (when focusing too heavily on existing
consumer preferences)
, - Marketing as a source of dullness (when too standardized, leads to lack of creativity)
- Marketing as intrusion (too aggressive marketing/too persistent/too invasive can lead
to negative perceptions of brand)
Chapter 3: Consumer Behaviour (in JE chapter 4)
Consumer markets are in continuous change, which requires understanding of emerging
contexts.
Potential influences are:
- Global consumer culture – shapes cultural values / extent to which consumers conform
to cultural norms. Significantly affect how individuals respond to marketing activities.
- Co-creation of value – firms seek to differentiate offerings. To succeed, firm should offer
its customers the opportunity to co-build a service experience to suit individual needs
and produce value.
- Social media and consumer behaviour – tracking and identifying cons behaviour
facilitates sophisticated analysis of consumer DM process.
Dimensions of consumer behaviour: Distinction between
- Consumer = Personal consumption
- Organizational buying = purchase of products for use in org context
- Always ask:
o Who is important in buying decision? How do they buy? What are their choice
criteria? Where do they buy? When do they buy?
Five roles in buyer decision-making process (consumer)
- Initiator – begins process of considering purchase.
- Influencer – attempts to persuade others / influence purchase decision of others.
- Decider – decides on making purchase.
- Buyer – makes the purchase.
- User – consumer
Organizational buyer
- Initiator – employee/dept identifying need for product/service.
- Influencer – individual or groups who influence through expertise/recommendations etc.
- Decider – person/committee with financial authority
- Buyer – performs transaction.
- User
Buying is a DM problem. Identifying a problem t (hat is linear) and leads to purchase.
Awareness of a problem:
1. Need recognition stage.
o Needs of customer and problems that they face.
o Need inhibitors which potentially stop a purchase.
o Need stimulation to encourage a purchase.
2. Information search
a. Internal vs external
3. Evaluation of alternatives and price
a. Set of brands reduces.
4. Purchase
Theory of reasoned action (Fishbein and Ajzen)
ECB2MKT
Utrecht University
Book Summary
,Week 1: The role of marketing in society.
Chapter 1
What is marketing?
- Essence: marketing is value creation, and =/= trickery
- Facilitate the return of customers through creating long-term satisfaction vs. short-
term deception.
o Purpose of business: create and keep customers (at a profit)
o Two central functions; marketing and innovation
- Four implications
o Marketing is central to business success.
o Marketing’s purpose is not to chase any customer at a price (other measures are
equally important for profit)
o Investment required to attract customers is higher than the amount needed to
retain existing customers.
o Most markets characterized by intense competition – org needs to understand
what competitors provide.
- Marketing is a form of exchange.
The modern marketing concept: achievement of corporate goals through meeting and
exceeding customer needs and expectations better than competition. Three conditions:
- Customer orientation, integrated effort and goal achievement all in the end to facilitate
customer satisfaction.
Marketing orientation in a changing world
- Marketing orientation (prioritise identifying consumer needs and creating satisfactory
products). Changing needs = opportunities which drive the company
- Basic elements in marketing orientation
o Customer needs
o Potential market opportunities
o Marketing products and services
o Customers
- Basic elements in production orientation
o Production capabilities
o Manufacture product
o Aggressive sales effort
o Customers
,Commodity vs non-commodity business
- Commodity business: marketing orientation and business performance is U-shaped.
o Low and high market orientation business performing best in terms of
profitability, over mid-range.
- Non-commodity business: relationship is linear.
Understanding market-driven business (MDB)
- Evaluate how products/services are being evaluated against those of competition.
- Marketing and service mix matches choice criteria that the customers use and are
better than those of their competitors.
- MDB key feature: recognition that marketing research expenditure is an investment
that can yield rewards (better customer understanding + competitive advantage)
- MDB vs Internally Driven Business
o MDB – marketing research is an investment.
o IDB – marketing research seen as a non-productive intangible. Prefers to rely on
anecdotes and received wisdom. Tends to ignore competition.
IDB rewards timeserving and ability to not make mistakes.
Results in risk avoidance and continuance of the status quo
- Intensive competition means marketing-driven companies should respond quick to
latent markets.
o Innovate, manufacture and distribute rapidly before strategic window of
opportunity closes.
o MDB vs IDB. MDB is effective and efficient whereas IDB is only efficient.
Efficiency: concerned with inputs and outputs. Economical production.
Benefit: Cost per unit/output is low. Potential to offer low prices to
gain market share / medium-high prices achieves high profit
margins.
Effectiveness: doing things right. Operating in attractive markets and
making products customers want to buy.
o Cost-focused vs customer focused.
Marketing benefits:
- Four key benefits arise from using marketing as a philosophy.
- Customer value – meet/exceed needs better than competitors, attract/retain,
dependent on customer perception of benefits associated with purchase of product.
, - Customer satisfaction – products performance vs. buyer expectations, todays world =
performance should exceed expectations = commercial success
- Customer loyalty – high commitment to relationship with customer can be maximized
by three opportunities.
o Facilitate ‘passion driven behaviour’.
o Build brands that engender self-brand integration.
o Create positive emotional connections.
- Long-term customer relationships – enhances productivity and allows firm and
customers to develop mutual cooperation.
Marketing planning – functions at two levels
- Business level – focus is strategic in nature and involves performing multiple analyses.
- Product/service level – focus on practical application of marketing.
- Marketing and services mix. Customer has a key role when deploying marketing
tactically.
- Tactical marketing
o Deployment of marketing mix
o 4 P’s
Product
Price
Promotion
Place
- Growth of services industries has given rise to extended marketing mix – 7 P’s – added
people, physical evidence and process.
Marketing implementation
- Focus on actions. Who does what? What strategy employed. Where do things happen.
What takes place.
Marketing managers should be aware of the following issues.
- Marketing concept as an ideology (not only satisfy customer needs, can overshadow
business/ethical considerations)
- Marketing as society (influence on society shaping behaviour and trends (far reaching
impacts on business)
- Marketing as a constraint on innovation (when focusing too heavily on existing
consumer preferences)
, - Marketing as a source of dullness (when too standardized, leads to lack of creativity)
- Marketing as intrusion (too aggressive marketing/too persistent/too invasive can lead
to negative perceptions of brand)
Chapter 3: Consumer Behaviour (in JE chapter 4)
Consumer markets are in continuous change, which requires understanding of emerging
contexts.
Potential influences are:
- Global consumer culture – shapes cultural values / extent to which consumers conform
to cultural norms. Significantly affect how individuals respond to marketing activities.
- Co-creation of value – firms seek to differentiate offerings. To succeed, firm should offer
its customers the opportunity to co-build a service experience to suit individual needs
and produce value.
- Social media and consumer behaviour – tracking and identifying cons behaviour
facilitates sophisticated analysis of consumer DM process.
Dimensions of consumer behaviour: Distinction between
- Consumer = Personal consumption
- Organizational buying = purchase of products for use in org context
- Always ask:
o Who is important in buying decision? How do they buy? What are their choice
criteria? Where do they buy? When do they buy?
Five roles in buyer decision-making process (consumer)
- Initiator – begins process of considering purchase.
- Influencer – attempts to persuade others / influence purchase decision of others.
- Decider – decides on making purchase.
- Buyer – makes the purchase.
- User – consumer
Organizational buyer
- Initiator – employee/dept identifying need for product/service.
- Influencer – individual or groups who influence through expertise/recommendations etc.
- Decider – person/committee with financial authority
- Buyer – performs transaction.
- User
Buying is a DM problem. Identifying a problem t (hat is linear) and leads to purchase.
Awareness of a problem:
1. Need recognition stage.
o Needs of customer and problems that they face.
o Need inhibitors which potentially stop a purchase.
o Need stimulation to encourage a purchase.
2. Information search
a. Internal vs external
3. Evaluation of alternatives and price
a. Set of brands reduces.
4. Purchase
Theory of reasoned action (Fishbein and Ajzen)
