Principles of Marketing

Session 1: Creating Customer Value and Engagement

Marketing: all about creating value.
4P’s: 70% of marketing. AKA marketing mix.
- Price
- Place
- Promotion
- Product
Advertising: because product takes time to come into the market, think ahead when adv. Must fit market
changes, if product doesn’t fit into market= failure.
STP:
1.segmentation- Dividing and segmenting the market.
2. targeting- audience
3. positioning – How will you position product against comp.

Customers: any entity that you exchange VALUE with. Have different roles ( suppliers, buyers, brokers)
What Is Marketing?
- a process by which companies create value for customers and build strong customer relationships
in order to capture value from customers in return.
o The two main goals of marketing:
 attract new customers by promising superior value
 grow current customers by delivering satisfaction
Companies like Starbucks don’t just sell coffee, they sell an experience. ( environment, service ect..)

The Marketing Process: Creating and Capturing Customer Value. 5 steps

1. Understand the marketplace and customer needs and wants.
a. IMP… what do they want ????
2. Design a customer value- driven marketing stategy.
a. 4ps
b. All about PLANNING.
3. Construct an integrated marketing program that delivers superior value.
a. Implementation of plan in step 3
b. Comp & customer= dynamic forces. ( demand changes)
4. Engage customers, build profitable relationships, and create customer delight.
a. Loyal customers is the goal. Keep them coming.

5. Capture value from customers to create profits & customer equity.

a. Is what is gained from steps 1-4.
b. Exchange

Value: creates value for customers and build relationships.

- Trade-off between perceived benefits and perceived costs.
Equity: capture value from customers in return.
- Moves in opposite direction as value.
What do customers seek?
- Monetary value , sustainability, quality, luxury, functional, convenience, social value, ect…

Understanding the Marketplace and Customer Needs:

- Smart Marketers look beyond the attributes of products and services. By orchestrating several
services and products, they create brand experiences for customers.
 o Ex: Apple’s successful retails stores don’t just sell products. They create an engaging
brand experience.
Needs: are states of felt deprivation.
- must have.
Wants: are the form human needs take as they are shaped by culture and individual personality.
Demands: are human wants that are backed by buying power.
- Has the money to buy it. (usually for things like luxury)
Market offerings: some combination of products, services, information, or experiences offered to a market to
satisfy a need or want.
Marketing myopia: paying more attention to the specific products than to the benefits and experiences
produced. They focus on existing wants and lose sight of underlying customer needs.
- (Related to emotions)
Customers form expectations about the value and satisfaction of market offerings.
– Satisfied customers buy again & tell others.
– Dissatisfied customers switch to competitors & also tell others.
Exchange: act of obtaining a desired object from someone by offering something in return.
THE 4 P’S:
- Price, place, promotion and product.
o A market is the set of actual and potential buyers of a product or service. These buyers share a
particular need or want and can be satisfied through exchange relationships. Sellers must
search for buyers, identify their needs, design good marketing offerings, set prices for them,
promote them, and store and deliver them.
Modern Marketing system: (AKA VALUE CHAIN)

- Competitors exchange value because they push u to improve your performance.

- Market intermediates: middleman/ brokers
- Environmental forces (PESTLE)
o demographic, economic, natural, technological, political, and social/cultural.
o They are dynamic, interrelated (affect each other) and uncontrollable.

Designing a Customer Value-Driven Marketing Strategy: (STP)

- Marketing management : is the art and science of choosing target markets and building
profitable relationships with them.
- To design an effective marketing strategy:
o What customers will we serve (target market), How can we best serve these customers
(value proposition- aligning customer with business)
- Selecting Customers to Serve:
o Market Segmentation: dividing the market into segments of consumers.
o Target Marketing: selecting which segments it will go after.
- A brand’s value proposition is the set of benefits or values it promises to deliver to customers to
satisfy their needs (how it will differentiate and position itself).
o Looking at demand needs and wants.
o JetBlue Airlines promises to put “You Above All” = focuses on customer service.
o Spirit Airlines gives you “Bare Fare” = focuses on pricing.
Marketing Management orientations:
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal marketing concept

1. Production concept:
- Holds philosophy that consumers will favor products that are available and highlight affordability.
- Management should focus on improving production and distribution efficiency.
2. The product concept:
- It holds the philosophy that consumers will favor products that offer the most in quality,
performance, and innovative features.
- Management should focus on continuous product improvements.
3. The Selling Concept:
- It holds the philosophy that consumers will not buy enough products unless the company
undertakes a large-scale selling and promotion effort.
- Typically practiced with unsought products – those that buyers do not think of buying (life
insurance; blood donations).
4. The Marketing Concept:
- It holds the philosophy that achieving organizational goals depends on knowing the needs and
wants of target markets and delivering satisfaction better than competitors.
- Customer focus and value are paths to sales and profits. The job is not to find the right
customers for your product but to find the right products for your customers.

Selling and Marketing Concepts Contrasted

- You cant have one without the other.
- Selling: focuses on the profit.
- Marketing: focuses on value creation.
o Depends on what the goal is.

5. The Societal Marketing Concept: (doing good to the society)

• It holds the philosophy that marketing strategy should deliver value to consumers in a way that
maintains both consumer’s and society’s well-being.
• It calls for sustainable marketing, socially and environmentally responsible marketing.
• No GMO’s , fairtrade, cruelty free, vegan…
• The company’s marketing decisions should consider consumers’ wants, the company’s requirements,
consumers’ long-run interests, and society’s long-run interests.
• Three Considerations Underlying the Societal Marketing Concepts:
 The marketing mix is comprised of a set of tools known a the four Ps: ( generic strategy)
• product
• price
• promotion
• place
• Integrated marketing program—a comprehensive plan that communicates and delivers intended
value.

A marketing department internal and external environment:

- 2 kinds: internal & external
- 4p’s: Internal; because its controlled.

- PESTLE
Uncontrollable Environmental Forces
• Social
• Competitive
• Economic
• Regulatory
• Technological

Internal and External Marketing Environment:

† The Organization Itself and Its Departments (Internal Environment)
† Society (External Environment)
 † Environmental Forces (External Environment)

Controllable and Uncontrollable Marketing Environmental Factors:

Session 2: Company & Marketing Strategy – Partnering to Build Customer Engagement, Value and
Relationships

Company Wide Strategic Planning:

- Strategic planning is the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities, and its changing marketing opportunities.
- Annual and long-range plans: deal with company’s current businesses and how to keep them
going.
- Strategic planning: involves adapting the firm to take advantage of opportunities in its changing
environment.
 - STEPS IN STRATEGIC PLANNING:

- Marketing planning occurs at the business-unit, product, and market levels. It supports company
strategic planning with more detailed plans for specific marketing opportunities.

Company-Wide Strategic Planning: Defining a Market-Oriented Mission

- The mission statement is the organization’s purpose; what it wants to accomplish in the larger
environment (acts as an “invisible hand”).
- Forging a sound mission begins with the following questions:
- What is our business?
- Who is the customer?
- What do consumers value?
- What should our business be?
A mission statement should:
1. Not be myopic in product/technology terms (e.g., we make and sell furniture). (short term).
2. Emphasize the company’s strengths
3. Contain specific workable guidelines
4. Not be stated as making sales or profits

Setting Company Objectives and Goals:

• Business objectives
– Build profitable customer relationships
– Invest in research
– Improve profits
• Marketing objectives
– Increase market share
– Create local partnerships
– Increase promotion