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Principles of Marketing
Seventeenth Edition
Chapter 1
Marketing:
Creating Customer Value and
Engagement
Learning Objective 1
Define marketing and outline the steps in the marketing
process
...
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Discussion Question
Can you give examples of either
national or local companies that
are excellent at marketing and how
does it reflect the definition given
in this slide
...
The twofold goal of marketing is to:
new customers by promising superior value
•• attract
grow current customers by delivering satisfaction
Sound marketing is critical to the success of every organization:
for-profit firms
•• large
not-for-profit organizations
You already know a lot about marketing—it’s all around you:
at your nearby shopping mall
•• products
ads that fill your TV screen and magazines, or stuff your mailbox
web sites and mobile phone apps
•• imaginative
blogs, online videos, and social media
Today’s marketers reach you directly, personally, and interactively
...
Learning Objective 2
Explain the importance of understanding the marketplace and
customers and identify the five core marketplace concepts
...
Wants are the form human
needs take as they are shaped
by culture and individual
personality
...
Understanding the Marketplace and Customer
Needs
Market offerings are some
combination of products,
services, information, or
experiences offered to a
market to satisfy a need or
want
...
Understanding the Marketplace and
Customer Needs
• Marketing experiences:
• More than just a sports bar, Buffalo Wild
Wings mission is to provide a total eating and
social environment that “fuels the sports fan
experience” through in-store and online
engagement
...
Understanding the Marketplace and
Customer Needs
• Marketing occurs when people decide to satisfy
their needs and wants through exchange
relationships
...
• Marketing consists of actions taken to create,
maintain, and grow desirable exchange
relationships with target audiences involving a
product, service, idea, or other object
...
Understanding the Marketplace and
Customer Needs
Exchange is the act of obtaining a desired object from
someone by offering something in return
...
Understanding the Marketplace and Customer
Needs
A market is set of actual and potential buyers
...
• Sellers must search for buyers, identify their needs, design good
market offerings, set prices for them, promote them, and store and
deliver them
...
• Consumers engage in marketing when they search for products,
interact with companies to obtain information, and make their
purchases
...
Understanding the Marketplace
and Customer Needs
Understanding the Marketplace
and Customer Needs
•
A market is the set of actual and potential buyers of a product or service
...
•
Figure 1
...
•
Each party in the system adds value for the next level and is affected by major environmental
forces (demographic, economic, natural, technological, political, and social/cultural)
...
Activities
such as consumer research, product development, communication, distribution, pricing, and
service are core marketing activities
...
•
Marketers are no longer asking only “How can we influence our customers?” but also “How can our
customers influence us?” and even “How can our customers influence each other?”
Learning Objective 3
Identify the key elements of a customer-driven marketing strategy
and discuss the marketing management orientations that guide
marketing strategy
...
–What customers will we serve (target market)?
–How can we best serve these customers
(value proposition)?
Discussion Question
• Do you use a Gym or buy any fitness product
like clothes or shoes? Supplements?
• Describe a market segment for any of the
above that you currently use?
Designing a Customer Value-Driven Marketing
Strategy
A brand’s value proposition is
the set of benefits or values it
promises to deliver to customers
to satisfy their needs
...
•
BMW promises “the ultimate driving machine”
•
New Balance’s Minimus shoes are “like barefoot only better
...
”
•
The company must decide how it will serve targeted customers—how it will
differentiate and position itself in the marketplace
...
•
Value propositions differentiate one brand from another
...
Designing a Customer Value-Driven Marketing
Strategy
Productio
n concept
Product
concept
Selling
concept
Marketin
g
concept
Societal
Marketin
g
concept
Designing a Customer Value-Driven
Marketing Strategy
•
Marketing management wants to design strategies that will build profitable relationships with target
consumers
...
•
The production concept is still a useful philosophy in some situations
...
•
However, although useful in some situations, the production concept can lead to marketing myopia and losing sight of the
real objective—satisfying customer needs and building customer relationships
...
•
The focus is on continuous product improvements
...
However, focusing only on the company’s products can also lead to marketing myopia
...
”
•
But they are often rudely shocked
...
The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their
needs even better than a mousetrap
...
– The selling concept is typically practiced with unsought goods—those that buyers do not
normally think of buying, such as life insurance or blood donations
...
– Such aggressive selling, however, carries high risks
...
•
Marketing concept: Know the needs and wants of the target markets and deliver
the desired satisfactions better than competitors
...
– Instead of a product-centered make-and-sell philosophy, the marketing concept is a customercentered sense-and-respond philosophy
...
•
For societal marketing concept, see future slide
...
• The selling concept takes an inside-out perspective
...
– It focuses primarily on customer conquest—getting short-term sales
with little concern about who buys or why
...
– As Herb Kelleher, the colorful founder of Southwest Airlines, once put
it, “We don’t have a marketing department; we have a customer
department
...
– In turn, it yields profits by creating relationships with the right
customers based on customer value and satisfaction
...
Designing a Customer Value-Driven
Marketing Strategy
• The societal marketing concept questions whether the pure marketing
concept overlooks possible conflicts between consumer short-run wants
and consumer long-run welfare
...
It calls for sustainable marketing,
socially and environmentally responsible marketing that meets the
present needs of consumers and businesses while also preserving or
enhancing the ability of future generations to meet their needs
...
• Companies should balance three considerations in setting their marketing
strategies: company profits, consumer wants, and society’s interests
...
Next, the marketer develops an integrated marketing program that will actually
deliver the intended value to target customers
...
It consists of the firm’s marketing mix, the set of marketing tools the firm uses to
implement its marketing strategy
...
– To deliver on its value proposition, the firm must first create a need-satisfying market offering
(product)
...
Finally, it must engage target
consumers, communicate about the offering, and persuade consumers of the offer’s merits
(promotion)
...
Learning Objective 4
Discuss customer relationship management and identify strategies
for creating value for customers and capturing value from
customers in return
...
Managing Customer Relationships
and Capturing Customer Value
•
The first three steps in the marketing process—understanding the marketplace
and customer needs, designing a customer value-driven marketing strategy, and
constructing a marketing program—all lead up to the fourth and most important
step: building and managing profitable customer relationships
...
Then, we
examine how companies go about engaging customers on a deeper level in this
age of digital and social marketing
...
Some marketers define it narrowly as a customer data
management activity (a practice called CRM)
...
•
In the broader sense, customer relationship management is the overall process of
building and maintaining profitable customer relationships by delivering superior
customer value and satisfaction
...
Learning Objective 4
Describe the major trends and forces that are changing
the marketing landscape in this age of relationships
...
• The explosive growth in digital technology has fundamentally
changed the way we live—how we communicate, share
information, access entertainment, and shop
...
3 billion people—46 percent of the world’s
population—are now online
...
These numbers
will only grow as digital technology rockets into the future
...
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– The nation’s not-for-profits face stiff competition for support and membership
...
– For example, Ben & Jerry’s three-part “linked prosperity” mission drives it to make fantastic
ice cream (product mission), manage the company for sustainable financial growth (economic
mission), and use the company “in innovative ways to make the world a better place” (social
mission)
...
”
•
As they are redefining their customer relationships, marketers are also taking a
fresh look at the ways in which they relate with the broader world around them
...
•
Marketers are reexamining their relationships with social values and
responsibilities and with the very Earth that sustains us
...
So, What Is Marketing? Pulling It All
Together