Introduction to Marketing Principles

Introduction to Marketing

• Marketing involves engaging customers and managing profitable customer relationships.
• Companies create value for customers and build strong relationships to capture value in return.
• The twofold goal of marketing includes attracting new customers with superior value and retaining/growing current customers through satisfaction.

The Marketing Process - 5 Steps

• Understanding the marketplace and customer needs/wants.
• Designing a customer-driven marketing strategy.
• Constructing a marketing plan that delivers superior value.
• Building profitable relationships and create customer satisfaction.
• Capturing value from customers to create profit and customer equity.

Understanding the Marketplace and Customer Needs

• Wants are needs shaped by culture and individual personality, for example, a person needing food but wanting chicken.
• Demands are wants supported by buying power, such as wanting a BMW 5 series not a Mercedes Benz A200.
• Market offerings combine products, services, information, and experiences to satisfy a need or want.
• Market offerings include intangible services/benefits like banking, airlines, hotels, retailing and home repair.
• Marketing myopia occurs when marketers focus too much on specific products rather than the benefits/experiences those products create.
• Example of marketing myopia: Nokia losing dominance to Apple's iPhone.
• Customer expectations affect value/satisfaction, as does word-of-mouth, and the possibility of customers switching to other brands if dissatisfied
• Marketers must set right level of expectations, not too high or low
• Relationships consist of building actions to build and maintain desirable relationships
• Exchange refers to obtaining a desired object by offering something in return.
• 2 types of change are Monetary, where a customer shares information in a survey for monetary reward plus Non-monetary, where candidate wants votes in return for membership.
• A market is a set of actual and potential buyers.
• Marketers need to understand customer needs/wants within their operating marketplace.

Core Customer and Marketplace Concepts

• Needs, wants, and demands.
• Market offerings (products, services, benefits, and experiences).
• Value and satisfaction.
• Exchanges and relationships.
• Markets.

Designing a Customer-Driven Marketing Strategy

• Marketing management involves choosing target markets and building profitable relationships.
• Marketers should answer "What customers will we serve?" and "How best can we serve these customers?".
• Selecting customers involves deciding who to serve by dividing the market into segments based on demographics/geography.
• Target marketing caters to segments the company can effectively serve.
• Demarketing reduces demand temporarily/permanently, without destroying it, such as promoting paperless systems.
• A value proposition includes a set of benefits that satisfy customer needs.
• Value propositions differentiate a brand and provide advantages in the target market.

Marketing Management Orientations

• There are five alternative marketing concepts that organizations use to design and implement marketing strategies
• The production concept favors products that are available and highly affordable.
• Apple outsourcing hardware production to Asian countries is an example of production concept.
• The product concept favors products with the most quality, performance and features.
• The selling concept suggests consumers will not buy enough products without large-scale promotion, which can occur in economic recessions.
• The mMarketing concept involves achieving goals by knowing target markets' needs/wants and delivering satisfaction better than competitors (example: 24/7 service) .
• The societal marketing concept involves considering consumer wants, company requirements, consumer interests, and society's long-run interests such as health/environment.

Preparing an Integrated Marketing Plan and Program

• The marketing mix include the use of tools (the seven Ps) to implement marketing strategy.
• Integrated marketing programs communicate/deliver the intended value to chosen customers.
• Customer relationship management is the process of building and maintaining customer relationships, built on superior value/satisfaction.
• Customer-perceived value comprises of value (benefits) - total customer cost (for example; Brand X's status, design, and fashion, minus price).
• Customer satisfaction is the extent to which perceived product performance matches expectations.

Building Customer Relationships

• The changing nature of customer relationships now sees marketers use selective relationship management.
• PnP involves evaluation of customer evaluation and effort into profitable customers
• Long-term customer relationship management to retain current customers and build profitable, long-term relationships.
• Direct connections are made using tools like telephone, mail order, kiosks, and the Internet, which saves time .
• Partner relationship management: working with both internal/external partners to bring greater value to customers.
• The supply chain channel stretches from raw materials to components to final products/buyers, it includes supply management; strategic partners;strategic alliances.

Capturing Value from Customers

• Customer loyalty/retention is acquired through customer lifetime value, the value of purchases over a customer's lifetime.
• Growing share of customers involves capturing a larger portion of their total spending in a company's product categories.
• Customer equity represents the total combined lifetime values of all company customers.
• Building the best relationships with the right customers means managing/maximizing each consumer relationship.

The New Marketing Landscape

• The new digital age has brought big impacts
• New recent technology influences the ways marketers connect with and bring value to customers via social media.
• Customised products and services are created, like Google Chrome.
• Market tracking and learning is enabled, with cookies.
• Communication is easier to achive using using video conferencing, and online data services.
• The Internet creates market places and spaces through entertainment, information and communication.
• Rapid globalization connects firms globally with both partners/customers.
• Global insights on the industry, opportunities, and competitors are needed.
• Marketers must take more responsibility for the social/environmental impacts of their actions.
• Firms practicing 'caring capitalism' are setting themselves apart from their competitors, by building social responsibilities.
• Not-for-profit organizations (example: the Organ Donor Foundation) have the ability to use marketing to attract membership, support and donors.