CHAPTER 1 – Creating customer relationships and value through marketing

Marketing is a broad term:

1. It is relevant throughout your life

2. It is important for success of any organization
3. It encourages research and development

Functions of marketing:

1. Ensuring that a firm understand its customers

2. Finding the best ways to reach customers
3. Encouraging customers to purchase (not only monetary policies)
4. Turning customers into brand loyalists

Definition:

It seeks to discover needs and wants of customers. Marketing is the activity for creating/
communicating/ delivering/ exchanging offering that benefit to customers, stakeholders.

What is it doing:

1. More than persuading customers

2. Begins with customer needs (it begins outside the company)
3. Involves exchange “Pre subsistence” economy – no need for marketing (no exchange - no
marketing)
4. Build relationship with customers

Marketing is: hw is identify satisfy anticipate

1. Social process
2. Needs and wants
3. Involving exchange
4. Creating value
5. Building strong relationship

Understand customer/ satisfy the customer needs/ create awareness & interest in your product

Complacency trap:

1. There is no substitute for what we make or do

2. We can always cut costs
3. Population growth and wealth expansion will always create customers (we will always have
customers)

Need – smt is interesting/ coming from biological part of human

Want – options we use to satisfy to our need

Good companies – provide a different solution to already met needs

Great companies – try to fulfil unmet needs

Exchange:

1. 2+ parties with unsatisfied needs (I want to buy and company wants to sell)
 2. A desire and ability to be satisfied (do I want to buy exactly it? Maybe I will buy another one)
3. A way for the parties to communicate (how to communicate with the company)
4. Something to exchange

Target market – a group of people to whom a company wants to sell its product

Marketing mix:

1. Product – a good, service, or idea to satisfy a customer’s needs.

Size/quality/packaging/color/taste/multipacks/trial sizes etc.
2. Price – amount of money (charged) that a customer finds a fair of exchange for the good or
service
3. Promotion – how you will be communicating products to final customers. What values does
a company to promote?
4. Place – where a company wants to sell the products

Market - Information about the needs – discover the needs/coming with some action plan – satisfy
those needs (marketing mix) - market

CUSTOMER VALUE PROPOSITION

Definition - Benefit that a company promises to deliver/satisfy their needs

Customer value - What customer sees – the difference between perceived benefits and perceived
costs.

Benefit –

- Functional – save time, simplify life

- emotional – lower anxiety, provide entertainment
- life changing – hope, sense of affiliation, belongings

Costs – monetary (fees, money, interest rates)/ inconveniencies (time, effort)

CVP (CVP analysis is a planning tool that management uses to predict the volume of activity, costs
incurred, sales values, and profits received) strategies:

- best price
- best product
- best service

P.S. – how to combine them?

Marketing concepts:

1. production (demands are high, makes a product, someone will be interested in this product)
2. sales (demands are low, many companies produce that products and you reduce the costs) it
does not maximize the profit though sell all of them
3. marketing (tools that we can use without changing the price by developing sophisticated
strategies)
4. customer - relationship building (changing marketing department post-production to pre-
production, we think that the product will sell itself) aware the people about the product
before production, a company produces a product out of needs of customers.
Utilities:

a. form utility
b. place utility
c. time utility
d. possession utility – how easy to make transaction to customers