Marketing is a process by which companies
engage customers, build strong customer
relationships, and create customer value in
order to capture value from customers in return.
Five Core Customer and Marketplace
Concepts
Concept 1: Customer needs, wants, and
demands
-States of felt deprivation
Physical:food, clothing, warmth, safety.
Social:belonging and affection.
Individual:knowledge and self-expression.
-Form that needs take as they are shaped by
culture and individual personality.
-Wants backed by buying power.
Willingness and desire to buy.
Concept 2: Market offerings (products,
services and experiences)
-Market offerings are some combination of
products, services, information, or
experiences offered to a market to satisfy a
need or want.
-Marketing myopia is the mistake of paying
more attention to the specific products a
company offers than to the benefits and
experiences produced by these products.
focusing only on existing wants and losing
sight of underlying consumer needs (Mouse
trap).
Concept 3: Value and satisfaction
Value: Customers form expectations
regarding value whereas marketers must
deliver value to consumers.
Satisfaction: A satisfied customer will buy
again and tell others about their good
experience.
Concept 4: Exchanges and relationships
Exchange: The act of obtaining a desired
object/response from someone by offering
something in return.
Examples: Political candidates, orchestra,
and social action group One exchange is not
the goal, relationships with several
exchanges (create, maintain and grow
desirable exchange relationships) are the
goal
Relationship: Relationships are built through
delivering value and satisfaction
Concept 5: Markets
Markets are the set of actual and potential
buyers of a product. Marketers seek
exchange relationship with buyers that are
profitable.
Not only asking “how can we influence our
consumers?” but also “how can our
consumers influence us…each other?” As
such, buyers or consumers also carry out
marketing.
Designing a Customer-Driven Marketing
Strategy:
Marketing management: is the art and
science of choosing target markets and
building profitable relationships with
them.
To design a wining marketing strategy,
the marketing managers must answer:
What customers will we serve?
How can we best serve these
customers?
Market segmentation: refers to dividing
the markets into segments of customers
Target marketing: refers to which
segments to go after.
Which segment of consumers the
company should go after (target/select)?
(Select only customers that the company
can serve well and profitably)
Demand Management: is the process of
finding and increasing demand, also
changing or reducing demand.
Demarketing is marketing: to reduce
demand temporarily or permanently; the
aim is not to destroy demand but to
reduce or shift it.
The value proposition: is the set of
benefits or values a company promises to
deliver to customers to satisfy their
needs.
-Differentiate
-Position
“Make yourself at home” (Hilton Hotel)
Marketing Management Orientations or
Philosophies
Production concept: is the idea that
consumers will favor products that are
available and highly affordable.
Therefore, the organization should focus on
improving production and distribution
efficiency.
However, this philosophy leads to marketing
myopia
Product concept: is the idea that consumers
will favor products that offer the most quality,
performance, and innovative features.
Organization should therefore devote its
energy to making continuous product
improvements.
However, this philosophy also leads to
marketing myopia… (Example, better
mousetrap instead of solving mouse problem)
Selling concept: is the idea that consumers will
not buy enough of the firm’s products unless it
undertakes a large scale selling and promotion
effort.
Good for unsought goods…life insurance or
blood donation
Marketing concept: is the idea that achieving
organizational goals depends on knowing the
needs and wants of the target markets and
delivering the desired satisfactions better
than competitors do.
Societal marketing concept:
The idea that a company's marketing decisions
should consider consumers' wants, the
company's requirements,consumers' long-run
interests, and society's long-run interests.
Preparing an Integrated Marketing Plan and Program
The marketing mix- is the set of tools (four Ps) the firm
uses to implement its marketing strategy. It includes
product, price, promotion, and place.
Integrated marketing program- is a comprehensive plan
that communicates and delivers the intended value to
chosen customers.
Customer Relationship Management (CRM)
The overall process of building and maintaining profitable
customer relationships by delivering superior customer
value and satisfaction.
Customer- perceived value:The customer’s evaluation of
the difference between all the benefits and all the costs of
a marketing offer relative to those of competing offers.
Customer satisfaction:The extent to which a product’s
perceived performance matches a buyer’s expectations.
Partner Relationship Management
Partner relationship management involves working
closely with partners in other company departments
and outside the company to jointly bring greater
value to customers
-Partners inside the company is every function area
interacting with customers
Electronically
Cross-functional teams
-Partners outside the company is how marketers
connect with their suppliers, channel partners, and
competitors by developing partnerships
Capturing Value from Customers:
Creating Customer Loyalty and Retention
Customer lifetime value is the value of the entire
stream of purchases that the customer would
make over a lifetime of patronage.
-It’s five times cheaper to keep an old customer
than acquire a new one.
-CLV for a customer of Stew Leonard is $50,000
Growing Share of Customer
Share of customer is the portion of the customer’s
purchasing that a company gets in its product
categories.
ex:
Share of wallet”
“Share of stomach”
“Share of garage”
“Share of travel”
Customer equity
Customer equity is the total combined customer
lifetime values of all of the company’s customers.
It’s a measure of the future value of the company’s
customer base.
-Sales and Market share (past)
-Customer Equity (future )
Customer Relationship Levels, Groups and Tools
The Changing Marketing Landscape:
The digital age
The explosive growth of the digital technology (Internet
of Things…everyone is digitally connected to everything)
-Real time marketing
-Mobile marketing
The changing economic environment
The great recessions from 2008 to 2009…[COVID-19]
-Spending patterns and new economic realities
-Sensible consumption (simpler living and more value
for dollar)
-Target (value proposition “Expect more, pay less” to
“Pay less” or “More for your money”) upscale-discounter
-Walmart (“lowest-price”)
Rapid globalization
Geographical and cultural distances have shrunk
-Increased global competition from foreign competitors
-Greater market coverage
-More options for purchasing (sourcing) and
manufacturing
The growth of not-for-profit marketing
Many organizations are realizing the importance of
strategic marketing to attract memberships, funds and
-support
-Performing arts
-Government agencies
-Colleges
Hospitals (celebrity endorsements and corporate
partnerships and online presence)
-Religious groups/Churches
Sustainable Marketing
The call for more environmental and social responsibility
-Consumerism and environmentalism movements
-To do well by doing good…Corporate ethics and social
responsibility
Strategic planning is the process of
developing and maintaining a strategic fit
between the organization’s goals and Measuring and Managing Return on
capabilities and its changing marketing Marketing Investment:
opportunities Return on Marketing Investment
(Marketing ROI)-
Steps in Strategic Planning Return on marketing investment
Defining a Market-Oriented Mission (Marketing ROI) is the net
-The mission statement is the return from a marketing
organization’s purpose, what it wants to investment divided by the
accomplish in the larger environment. costs of the marketing
-Market-oriented mission statement investment. Marketing ROI
defines the business in terms of provides a measurement of
satisfying basic customer needs. the profits generated by
Nike: We sell athletic shoes and apparel investments in marketing
-We bring inspiration and innovation activities
to every athlete* in the world
(* if you have a body, you are an
athlete)
Facebook- We are online social network-
We connect people around the
world and help them share
important moments in their lives.
Setting Company Objectives and Goals
Business objectives
• Increase access, lower costs
• Improve quality of care
• Invest in research, education and
customer outreach
• Improve profits
Marketing objectives
• Increase consumer engagement, sales
and market share
• Walk-in medical care (MinuteClinic)
• Increase advertising and promotional
efforts
Designing the Business Portfolio
The business portfolio- is the collection of
businesses and products that make up
the company
Portfolio analysis- is a major activity in Market Planning—Parts of a
strategic planning whereby management Marketing Plan
evaluates the products and businesses Executive summary
that make up the company Marketing situation
Analyzing the Current Business Portfolio Threats and opportunities
Strategic business unit (SBU) is a unit of Objective and issues
the Marketing strategy
company that has a separate mission and Action programs
objectives that can be planned separately Budgets
from other company businesses Controls
• Company division
• Product line within a division
• Single product or brand
-Tools Managing the Marketing Effort
-Identify key businesses (strategic planning-
business units, or SBUs) that make Strengths;
up the company Internal capabilnes that may
-Assess the attractiveness of its help a company reach its
various SBUs objectives
-Decide how much support each Opportunities;
SBU deserves External factors that the
company may be able to exploit
to its advantage
Strategic Business unit: Weaknesses;
Problems with Matrix Approaches Internal limitations that may
• Difficulty in defining SBUs and measuring interfere with a company's
market share and growth ability to achieve its objectives
• Time consuming Threats;
• Expensive Current and emerging external
• Focus on current businesses, not future factors that may challenge the
planning company's performance
Developing Strategies for Growth and Downsizing Implementing
Product/market expansion grid- is a tool for is the process that turns
identifying company growth opportunities marketing plans into marketing
through market penetration, market actions to
development, product development, or accomplish strategic marketing
diversification objectives
Developing Strategies for Growth and Downsizing • Successful implementation
Product/market expansion grid strategies depends on how
Market penetration- is a growth strategy well the company blends its
increasing sales to current market segments people,
without changing the product organizational structure,
Market development- is a growth strategy that decision and reward
identifies and develops new market segments system, and company culture
for current products into a cohesive
Product development- is a growth strategy that action plan that supports its
offers new or modified products to existing strategies
market segments Marketing Control
Diversification- is a growth strategy through • Controlling is the measurement
starting up or acquiring businesses outside the and evaluation of results and
company’s current products and markets the taking of corrective action as
Developing Strategies for Growth and Downsizing needed
Downsizing is the reduction of the business • Operating control
portfolio by eliminating products or business units • Strategic control
that are not profitable or that no longer fit the
company’s overall strategy
Planning Marketing:
Partnering to Build Customer Relationships-
Value chain- is a series of departments that carry out
value-creating activities to design, produce, market,
deliver, and support a firm’s products
Value delivery network- is made up of the company,
suppliers, distributors, and ultimately customers who
partner with each other to improve performance of the
entire system
Marketing Strategy and the Marketing Mix:
Customer-Driven Marketing Strategy-
Market segmentation- is the division of a market into
distinct groups of buyers who have distinct needs,
characteristics, or behavior and who might require
separate products or marketing mixes.
Market targeting- is the process of evaluating each
market segment’s attractiveness and selecting one or
more segments to enter.
Customer-Centered Marketing Strategy-
Market positioning- is the arranging for a product to
occupy a clear, distinctive, and desirable place relative
to competing products in the minds of the target
consumer
Market differentiation- is actually differentiating the
market offering to create superior customer value
Developing an Integrated Marketing Mix
Marketing mix- is the set of controllable tactical
marketing tools—product, price, place, and
promotion—that the firm blends to produce the
response it wants in the target market
Product: Promotion: Price: Place:
Variety Advertising List price Channels
Quality Personal Coverage
Discounts Assort-
Design selling Allowances
Features Sales ments
Payment period Locations
Brand name promotion Credit terms
Packaging Public Inventory
Services relations Transporta-
tion