Principles of Marketing

• Marketing involves creating customer value and engagement to create profitable relationships.
• The five key objectives are: Define marketing, explaining the understanding of the marketplace, identifying elements of a customer value-driven market strategy, discussing customer relationship management, and describing trends that change the marketing landscape.
• Nike sells apparel for many sports, including basketball, baseball, biking, wall climbing, and skateboarding.
• In the past 10 years, global sales and income doubled, which has overwhelmed competition.
• Nike specializes in building personal relationships, which makes them customer driven.

What is Marketing?

• A simple definition of marketing is engaging customers and managing profitable customer relationships.
• Marketing must attract and grow new and current customers.
• Marketing must satisfy consumer needs.
• Organizations, not just for-profits, must perform marketing.
• Marketing is engaging customers, building customer relationships, and creating customer value, so that they return.

The Marketing Process

• There is a five-step marketing process.
• First, understanding the marketplace and customer needs and wants.
• Second, design a customer value-driven marketing strategy.
• Third, construct an integrated marketing program that delivers superior value.
• Fourth, engage customers, build profitable relationships, and create customer delight.
• Fifth, capture value from customers to create profits and customer equity.
• Consumers create value in the form of sales, profits, and long-term customer equity.

Understanding the Marketplace and Customer Needs

• Five core marketplace concepts: needs, wants, demands, market offerings, value and satisfaction, exchanges and relationships, and markets.
• Companies must understand the consumers and the marketplace.
• Human needs are states of deprivation.
• These states can be physical, social, and individual.
• Wants are how humans fulfill their needs and are shaped by culture and personality.
• A typical American needs food, but want a Big Mac instead.
• Wants become demands when backed by buying power.
• Companies must learn and understand their customers' needs, wants, and demands.
• Needs and wants are fulfilled through market offerings, like a combination of products, services, information, or experiences.
• Market offerings include activities or benefits offered for sale that are essentially intangible and do not result in ownership of anything.
• Marketing myopia occurs when a company becomes too focused on their own products and loses sight of customer needs.
• Customers form expectations about the value and satisfaction of market offerings.
• Satisfied customers buy again and tell others about their good experiences.
• Dissatisfied customers switch to competitors and disparage the product to others.
• Customer value and satisfaction are key for developing and managing customer relationships.
• Exchange is the act of obtaining a desired object by offering something in return.
• Marketing builds and maintains a desirable exchange relationship with a target audience.
• A market is the set of actual and potential buyers of a product.
• Marketing means managing customer relationships.

Designing a Customer Value-Driven Marketing Strategy and Plan

• Marketing management is the art and selecting target markets and building relationships with them.
• A marketing manager must answer what customers will be served and how these customers can be served best.
• A company must decide whom to serve.
• This is done when the market is divided into segments of customers, called market segmentation
• Then selecting which segments it will go after, called target marketing
• Value proposition is the benefits a company promises to deliver to satisfy consumers' needs.
• BMW promises "the ultimate driving machine"
• Value propositions differentiate between brands.

Marketing Management Orientations

• There are five alternative concepts under which organizations design and carry out their marketing strategies.
• The production concept holds that consumers want products that are affordable.
• Management focuses on improving production and distribution efficiency.
• The product concept holds that consumers favor products that are innovative
• Marketing strategy focuses on continuous product improvements.
• The selling concept holds that consumers will not buy enough of the firm's product unless the firm undertakes a large-scale selling and promotion effort.
• Typically practiced with unsought goods such as insurances and blood donations.
• Industries must be good at tracking prospects and selling them on product benefits.
• The marketing concept holds that achieving organizational depends on knowing the needs and wants of target markets; and delivering better than competitors.
• Under the marketing concept, customer focus and value drive sales and profits.
• Rather than a “make-and-sell” philosophy, it is a customer-centered “sense and respond” philosophy.
• The job is not to find the right customers for your product, but to find the right products for your customers.
• Customer-driven companies research current customers and test proposed improvements.
• Customer-driven marketing requires understanding customer needs even better than customers themselves do.
• The selling concept takes on an "inside-out" perspective.
• The marketing concept takes an "outside-in" perspective.
• The societal marketing concept questions whether the pure marketing concept overlooks consumer short-run wants and long-run welfare.
• The societal marketing concept holds that marketing strategy should improve customer and society well-being.
• Companies should balance profits, wants, and society's interests.

Preparing an Integrated Marketing Plan and Program

• The marketing strategy outlines customers and how the company will create value.
• A marketer develops an integrated marketing program that will deliver the intended value to target customers.
• The marketing program consists of the marketing mix, which is the tools the firm uses.
• These tools are the the four P's: product, price, place and promotion.
• These marketing mix tools communicate to chosen customers,.

Engaging Customers and Managing Customer Relationships

• Customer relationship management is building and maintaining customer relationships by delivering customer value and satisfaction.
• It deals with all aspects of acquiring, keeping, and growing customers.
• The key to building relationships is customer value and customer satisfaction.
• Customer-perceived value is the customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.
• Customers act on perceived value.
• Customer satisfaction depends on product's performance relative to expectations.
• The purpose of marketing is to generate customer value profitably.
• Companies build relationships at many levels.
• Companies with low-margin customers may seek to develop basic relationships.
• Sellers with few customers and high-margin, want to create partnerships.
• Many companies offer frequency marketing programs.
• Companies sponsor club marketing programs that offer members special benefits.
• Today companies are building more direct and lasting relationships.
• New marketing is customer-engagement marketing, which is fostering direct and continuous customer involvement in shaping brand experience.
• It involves online, mobile, and social media.
• Customer-engagement marketing is to make a brand meaningful.
• The Internet and social media have boosted engagement marketing.
• Today's consumers are informed, connected, and powered.
• Marketing requires creating market offerings that involve consumers.
• Consumer-generated marketing has become a factor.
• Brands must embrace this trend or risk being left behind.
• Partner Relationship Management requires marketers work with others inside and outside to bring more value.
• Firms are linking departments to create value.
• Firms are forming cross-functional customer teams.
• Marketing channels consist of distributors and retailers who connect the company to buyers.
• The supply chain describes a channel, from raw material to the final buyer.

Capturing Value from Customers

• The first four steps in the marketing process involve building customer relationships.
• The final step involves capturing value in return.
• By creating superior customer value, the firm creates satisfied customers.
• The aim of CRM is to create customer satisfaction and customer delight.
• Companies must aim high in building customer relationships.
• Customer delight creates an emotional preference.
• Losing a customer means losing more than a single sale, but losing customer lifetime value.
• Share of customer represents the customer's products and market share.
• To increase share of customer, firms can offer variety.
• Customer equity is the total combined customer lifetime values.
• The more loyal the customers, the higher the firm's equity.
• Companies manage equity by viewing customers as assets.
• Companies classify customers by potential and manage relationships.
• Strangers require no investment.
• Butterflies capture as much business in the short term.
• True friends require continuous investment, as they become "true believers."
• Barnacles should be improved or "fired."

The Changing Marketing Landscape

• Major developments include the digital age, economic environment, the growth of non-for-profit marketing, rapid globalization, and ethics.
• The growth is digital tech has changed how we live and shop.
• An estimated 3.3 billion people are online.
• Digital and social media marketing involves websites, social media, mobile ads, YouTube, and emails.
• Websites provide information and some serve as online communities.
• Social media extends engagement.
• Mobile marketing is the fastest growing digital marketing platform.
• The Great Recession of 2008 forced consumption down.
• Marketing has become a major part of non-profits.
• Nearly every company is touched by global competition.
• Sustainable Marketing involves environmental and social responsibility.
• Sustainable marketing entails ethical and socially responsible behavior.

Explore marketing's role in creating customer value and profitable relationships. Understand the marketplace, customer-driven strategies, and relationship management. Discover how trends shape today's marketing landscape for businesses like Nike.