Understanding Marketing Principles

What is Marketing?

• Marketing involves engaging consumers and managing profitable customer relationships.
• Marketing helps companies engage consumers, build strong customer relationships, and create consumer value to capture value from customers in return.
• The twofold goal of marketing attracts new consumers by delivering superior value, and keeps and grows current consumers by maintaining satisfaction.
• Marketing creates value for consumers.
• In return for value, the company captures profits, loyalty, etc.
• Every organization must perform marketing functions, including for-profit and non-profit.

Evolution of Marketing Channels:

• Marketing once followed a one-way approach through traditional media like TV, radio, and newspapers.
• Present marketing uses a two-way approach that include social media, websites, and mobile apps.
• Marketers now engage consumers through personalized interactions and experiences.

Examples of Marketing in Action:

• Amazon dominates the online marketplace by offering an easy and comprehensive shopping experience.
• Facebook attracts billions of users by helping them connect and share.

What is the Marketing Process?

• The marketing process is a five-step strategy of creating and capturing customer value.
• Steps One through Four involve understanding consumers, creating value, and building strong relationships.
• Step Five consists of businesses capturing value from customers through sales, profits, brand loyalty, and long-term customer equity.

The Five Steps of the Marketing Process:

• Understand the marketplace and consumer needs and wants.
• Businesses must study consumer behavior, trends, and market conditions.
• Design a customer value-driven marketing strategy.
• A strategy must be developed based on target markets and how to best serve them.
• Construct an integrated marketing program that delivers superior value.
• A marketing mix comprised of product, price, place, and promotion should be implemented to maximize customer satisfaction.
• Engage with customers by building profitable relationships and creating customer delight.
• Interact with consumers, foster loyalty, and ensure positive brand experiences.
• Capture value from customers in return, and convert satisfied customers into sales, profits, and long-term brand equity.

Understanding the Marketplace and Consumer Needs

• The importance of understanding consumers makes it vital for companies to analyze their behavior to offer the right products and services that deliver value.
• Five core marketplace concepts describe needs, wants, demands, market offerings, consumer value, satisfaction, exchanges, relationships, and markets.

Needs, Wants, and Demands:

• Needs are fundamental requirements for survival and exist naturally.
• Types of needs include:
  • Basic physical needs (food, clothing, warmth, and safety)
  • Social needs (belonging, affection, and connection)
  • Individual needs (knowledge, self-expression, and personal growth)
• Wants are specific forms needs take, shaped by culture and personality.
• Example: A person needs food but wants a Big Mac, fries, and a Coke.
• Example: A person needs transportation but wants a Tesla.
• Demands occur when wants are backed by purchasing power.
• Consumers demand products that provide the most value and satisfaction given their budget.

Why Consumer Needs and Wants Matter in Marketing:

• Needs and wants drive consumer behavior and purchasing decisions.
• Understanding consumer preferences causes companies to invest heavily through market research, consumer data analysis, and observing shopping behaviors both offline and online.
• Examples of how a consumer-centric company acts:
  • Airbnb's CEO Brian Chesky and Co-founder Joe Gebbia stayed in Airbnb rentals to experience them firsthand.
• This real-world research helped them improve services and meet consumer expectations.
  • Target CEO Brian Cornell makes surprise store visits and observes customers, and visits consumers in their homes to analyze shopping behavior.

Market Offerings

• Market offerings combine products, services, information, or experiences that satisfy consumer needs and wants.
• Offerings can include services like banking, airlines, hotels, concerts, and education, as well as ideas and causes like campaigns or movements.

Importance of focusing on needs over products

• Focusing too much on a product, rather than what underlying need it fulfills, can cause marketing myopia and lead to a business losing sight of the consumer's actual problem.
• A newer, better solution leads consumers to switch.
• Ride-Sharing Industry focuses on the consumer need for affordable and convenient transportation rather than just selling taxis.

Consumer Value and Satisfaction

• Consumers compare multiple products and services to decide which best satisfies their needs, and based on expectations of value and satisfaction.
• Setting expectations too low may lead to satisfied customers, but the company will not attract enough new buyers.
• Setting expectations too high may lead to disappointed customers who may not repurchase.
• Consumer Value is the benefit a customer perceives relative to the cost, while consumer Satisfaction is the extent to which a product meets or exceeds expectations
• Satisfied consumers will buy again and recommend the product to others through word-of-mouth marketing

Exchanges and Relationships

• Exchanges refers to obtaining a desired product, service, or experience by offering something in return, not limited to products and money. It applies to ideas, votes, memberships, and participation.
• Marketing's goal is not just selling, but creating, maintaining, and growing valuable exchange relationships, by Consistently delivering superior consumer value to keep customers engaged and loyal, and offering products, services, or experiences that truly meet consumer needs.

Markets

• A market is the set of all actual and potential consumers of a product or service who share a need or want that can be satisfied through exchange relationships.
  • This includes people who desire a product or service and have the ability to purchase or engage with it.
• Defining a market helps a company understand what business they are truly in.
• A business has clear strategies if it can identify who its real market is and also identity who it real target market is.
• A well-defined market helps a business identify and monitor competitors and prioritize investments while allocating resources effectively.

Designing a Consumer-Centric and Value-Driven Marketing Strategy

• It is about marketing Management: The art and science of choosing target markets and building profitable relationships
• Understanding and engaging customers focuses on providing superior value which will achieve:
  • Engaging consumers
  • Keeping them satisfied
  • Grow long-term relationships for sustained profitability
• This marketing strategy focuses on two fundamental questions:
  • What consumers do we serve? (Target Market)
  • Why do they care? (Value Proposition)
• A value proposition is the set of benefits a brand promises to deliver as opposed to deciding how to differentiate itself and position its product. This helps Consumers use value propositions to compare brands and decide which one to choose
• The right value proposition builds strong consumer relationships beyond just transactions
• Target market selection needs highly relevant specific audience, through market segmentation that divides the market into distinct groups of consumers with similar needs and selecting the most profitable segments to serve

Market Management Orientations:

• The organisations design marketing strategies based on differentiating guiding philosophies to assume that Profitability comes from delivering superior value to the right customers, therefore having customer focus and value are the paths to sales and profits.
• This assumes a business focuses on
  • High production efficiency when customers want products that are affordable and widely available
  • Product innovation, quality, and performance when consumers prefer the best product with superior features
  • Aggressive selling & promotions to persuade consumers to buy a product
  • Customer needs to understand consumers better than competitors.
• Balances consumer needs, company profits, and societal well-being to have sustainable marketing

Integrated Marketing Plan and Program

• It is essential to bring the strategy to life by outlining how to deliver value to the target market and nurtures long-term consumer relationships in four steps:
  • Product offered to customers with the right value and level of satisfaction
  • Charge the right price which will still reflect the value consumers perceive
  • Make product available and ensure global availability distribution efficiently
  • How the company communicates with consumers through advertising and promotion
• Ensures that all elements align with the company's marketing strategy and objectives and its designed to maximise consumer satifaction

Managing Customer Relationships

• This is an overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction. It needs:
  • To be built by Acquiring, Engaging and Growing the relation.
  • To be built with Customer Perceived Value to match customer expectations and also with Customer satisfaction by matching product's performce to the expectations
  • Building relationships is easy on digital age as its quick access tool to consumers
• But more important then those steps is that is essential to have a Partner Relationship Management where companies must collaborate with partners to maximise coustmer value

Capturing Value from Consumers

• Value for customers in return comes in Sales, Market Shared, Profits and is the last key step!
• Creating superior value leads to Customer Loyalty and retentioin in order to maximise profits. Companies prefer this by:
  • Companies realize that losing a customer means losing all purchases
  • It costs 5x more to acquire a new customer than keep the old one
  • Knowing the CLV or Customer Lifetime Value from data such as Staw Leonards
• All of this is called consumer equity where is more important to have a strong brand then what is sold and the customer has the right to choose what is best for them.
• Make the right relations to the right customer, not the best way around. Make relations with True friends!

Marketing Environment

• Companies must be aware and able to create good relations with customers in companies enviroment
  • Mini enviroment: consists of micro companies which are close to company and effect them and the ability to make coustmer service
    • The company, the suppliers, marketing intemediaries, the competitors, the poublics, the coustmers. They influence the decision making
  • Macro enviroment is bigger and effects everyone with larger societal forces.
    • Demografic, economic, naturals effects, technological advancement, politic and the social

The Demografic, Economican, Natural and Technological Environment

• Demografic enviroment: the study of humans sizes and shapes of places
  • In today world with more peopel and changing demographics. With more and better technology can affect a companies growth by making easier to reach with customers. And more coustmes that want tech
• Economic enviroment: Consists of facotrs the ecect the consumer buying and spenging as well
  • Different generations buy and do different thing with them selfs
• Natural enviroment: All physical and natrual recources like oil etc.
  • The shift here is finding suatianbility as well as keeping cost small and making costmers happy
• Technological enviroment: the most powerful thing thet shapes peoples world
  • as tech gets better, govenemnt has to keep doing thing to make sure humans have good coustmer saftey

The Politic and Social, culture Enviroment and Resnding To them

• Consissits of agencies and more the influence the buy and set the regulations
  • Some people need goverment protections and companys need competition when selling.
  • Its really import and great to have CRM, but need to focus on ethical to make sure you dont get cancled
• Culture enviroment: is made on social powers and that shape:
  • Values to improve
  • Attitudes and Perceptions
• Comapnies just try to adapt rather then change them for consumers
• Companies must decide whther to stay with it or stay afloat to it to not get shut down