Marketing Definitions and Value

Marketing Definitions

• Marketing anticipates, manages, and satisfies demand through the exchange process
• Marketing creates, communicates, delivers, and exchanges offerings with value for customers, clients, partners, and society
• Marketing is how companies create value for customers, build relationships, and capture value in return

Marketing Process Model

• Understand the marketplace and customer needs and wants.
• Design a customer value-driven marketing strategy.
• Construct an integrated marketing program that delivers superior value.
• Engage customers, build profitable relationships and create customer delight
• Capture value from customers to create profits and customer equity.

Capturing Value

• Customer Lifetime Value: The predicted total value of purchases a customer makes over their patronage.
• Customer Equity: The total combined customer lifetime values of all the company's customers.
• Examples of CLV:
  • Lexus: $600,000
  • Taco Bell: $11,000
  • Starbucks: $14,100
  • General Motors: $276,000 (11+ vehicles, plus WOM)

Market

• All individuals or buying units share a particular need or want, which may be satisfied by a company's products or services now or in the future
  • Existing buyers
  • Potential buyers

Consumer Motivation

• Needs: The state of felt deprivation, common to all humans.
• Wants: Needs shaped by culture and personality.
• Demand: Wants backed up by buying power.

Consumer Choice

• Consumers choose products based on their perceived value.
• Value is the benefits gained compared to the cost of obtaining the product.
• Value Equation: Value = Quality (benefits) / Price
• “Fundamental Equation of Marketing”:
  • Perceived Value = Perceived Quality / Perceived Price
• Satisfaction comes from performance compared to expectations
• Satisfaction Equation: Satisfaction = Performance - Expectations

Marketing Concept

• Achieving company goals depends on knowing the needs and wants of target markets and delivering desired satisfactions better than competitors
• Marketing strategies rely on understanding consumer
• Consumer satisfaction is heart of the marketing concept

Marketing Mix: The 4 Ps

• Product: Features, quality, brand name, packaging, service, warranty
• Price: List price, discounts, price promotions, payment period
• Promotion: Advertising, PR and publicity, sales promotion, personal selling, event marketing, digital marketing
• Distribution: Channels, location, coverage, transportation

Extended Marketing Mix: The 6 Ps

• Traditional 4 Ps
• Partnerships: Benefits of tactical vs. strategic partnerships
• Position: Brand, company

STP

• Segmentation: Divide heterogeneous marketplace into smaller, homogeneous groups
• Targeting: Choose one or more consumer segments with an appropriately designed marketing mix
• Positioning: Make the product/service/brand/firm uniquely valuable to a consumer segment in a way that sets it apart from competitors; involves value proposition
• Value Proposition: Set of benefits/values a brand promises to deliver to satisfy customer needs

Evolution of Marketing

• Barter Era
• Production Era
• Sales Era
• Marketing Era:
  • Marketing Department Era
  • Marketing Company Era
• Sustainability Marketing: Marketing that sustains the environment, conserves limited resources, cares for present and future societal well-being and achieves profits