Week 1 Flashcards
What is marketing
Marketing is engaging customers and
managing profitable customer relationships.
The twofold goal of marketing is to:
- attract new customers by promising superior value; and
2. keep and grow current customers by delivering satisfaction.
Steps in the marketing process
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Marketing definiton today
Today marketing must be understood in the sense of satisfying customer needs. The process by which marketing organisations engage customers, build strong customer relationships and create customer value in order to capture value from customers in return.
5 Core marketing concepts
- Needs wants demands
- Market offerings
- Value satisfaction quality
- Exchange transactions relationships
- Markets
Needs wants demands
As a first step, marketers need to understand customer needs, wants and demands, and the marketplace within which they operate.
Needs
States of felt deprivation • Physical needs for food, clothing, warmth and safety. • Social needs for belonging and affection • Individual needs for knowledge and self-expression
Wants
The form of human needs
take as shaped by culture
and individual personality
Demands
Human wants that are backed
by buying power
Market offering
A market offering is a product that is some combination of goods, services and experiences that can be offered to a market to satisfy a need or want. • In the broadest sense, market offerings include… • Goods • Experiences • Places • Information • Services • Personas • Organisations • Ideas
Marketing myopia
The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. • Marketers/businesses see themselves as selling a product, rather than providing a solution to a need.
Customer value and satisfaction
Customers form expectations about the value and satisfaction that various market offerings will deliver, and buy accordingly.
• Satisfied customers buy again and tell others about their good
experiences.
• Dissatisfied customers often switch to competitors and
disparage the original product to others.
Exchange
Exchange is the act of obtaining a desired object from someone by
offering something in return. Exchange doesn’t always need to be based on money
Adapted
Transaction
A transaction is a trade between two parties that involves at least
two things of value, agreed-upon conditions, and a time and place of
agreement.
Relationship
Relationship looks at how to not only attract, but retain customers
What is a market
Buyers who share a particular need or want that can be satisfied through exchange relationships. It contains both actual buyers and potential buyers
Elements of a modern marketing system
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Designing a customer-driven marketing strategy
Marketing management
Marketing management is theart and science of choosing target markets and building profitable relationshipswith them.
•
The marketing manager’s aim is to attract, engage, keep and grow target customers by creating, delivering and communicating superior customer value.
Designing a customer-driven marketing strategy
Two critical questions:
1.
What customers will we serve? (i.e. Who is our target market?)
2.
How can we serve these customers best? (i.e. What is our value proposition?)
Selecting customers to serve
Decide who the organisation will serve by examining the various segments available.
–
Marketers know they cannot serve all customers in every way with a single market offering.
–
They know it is necessary to select customers they can serve well and profitably.
Selecting customers to serve: Demand
• Demand can be generated from – new customers (potential); and – repeat customers (existing)
Selecting customers to serve: Marketing strategies
Marketing strategies may involve: – Finding, increasing and retaining demand; or – Changing or reducing demand Adapted from
8 types of demand
Negative No Latent Declining Irregular Full Overfull Unwholesome
Negative
A market is in a state of negative demand if a major part of the market dislikes the product and may even pay a price to avoid it.
No
Target consumers may be unaware of or uninterested in the product. The marketing task is to find ways to connect the benefits of the product with the person’s natural needs.
LAtent
Many consumers may share a strong need that cannot be satisfied by any existing product. The marketing task is to measure the size of the potential market and develop effective products and services that would satisfy the demand.
Declining
Every organisation, sooner or later, faces declining demand for one or more of its products. The marketing task is to reverse the declining demand through creative remarketing of the product.
Irregular
Many organisations face demand that varies on a seasonal, daily or even hourly basis, causing problems of idle or overworked capacity. The marketing task is to find ways to alter the same pattern of demand through flexible pricing, promotion and other incentives.
Full
Organisations face full demand when they are satisfied with their volume of business. The marketing task is to maintain the current level of demand in the face of changing consumer preferences and increasing competition.
Overfull
Some organisations face a demand level that is higher than they can, or want to, handle. The marketing task, called demarketing, requires finding ways to reduce the demand temporarily or permanently. Demarketing aims not to destroy demand but only to reduce its level, temporarily or permanently.
Unwholesome
Unwholesome products will attract organised efforts to discourage their consumption. The marketing task is to get people who like something to give it up, using such tools as fear messages, price hikes and reduced availability.
The value proposition
The marketing organisations value proposition is the set of benefits or values that it promises to deliver to customers to satisfy their needs. It should differentiate brands and position them in the marketplace. The proposition answers the customer’s question “Why should I buy your brand rather than a competitors?”
Five concepts or philosophies guide marketing efforts:
Production Concept Product concept Selling concept Marketing Concept Societal marketing concept
Production Concept
focus on production & distribution efficiency
Product concept
focus on continuous product improvements
Selling concept
focus on large-scale selling and promotion (used extensively with unsought goods). Profits through sales volume
Marketing Concept
focus on understanding customer needs and wants, and delivering satisfaction efficiently. Profits thorough customer satisfaction
Societal marketing concept
Marketing strategy should deliver value to customer in a way that maintains or improves both the consumer’s and society’s well being.
Also sometimes referred to as sustainable marketing
Marketing concept
A marketing management philosophy which holds that achieving organisational goals depends on knowing the needs and wants of a target market and delivering the desired satisfaction better than competitors do
The marketing program
It builds customer relationships by transformingthe marketing strategy into action. It consists of the firm’s marketing mix –that is, the set of marketing tools the firm uses to implement its marketing strategy.
The extended marketing mix
Product- Goods, services, experiences
Price
People - Relationships
Placement logistics - Demand chain management
Promotion
Process
Physical evidence
Building customer relationships
Customer relationship management (CRM) is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Customer engagement and today’s digital and social media
The digital age has spawned a dazzling set of new customer relationship-building tools, from websites, online ads and videos, mobile ads and apps, and blogs to online communities and the major social media, such as Twitter, Facebook, YouTube, Instagram and Pinterest.
Customer-engagement marketing goes beyond just selling a brand to consumers. Its goal is to make the brand a meaningful part of consumers’ conversations and lives.
Consumer generated marketing
Brand exchanges
Consumer empowerment
•
Brand exchanges created by consumers can be both invited and uninvited.
•
Consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.
•
Brands must embrace this new consumer empowerment and master the new digital and social media relationship tools –or risk being left behind.
Partner relationship management
Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.
Partner relationship management
Partners inside the organisation
Marketers have been charged with understanding customers and representing customer needs to different company departments. All departments are responsible for delivering value to customers.
Partner relationship management
Partners outside the organisation
Marketing channels consist of distributors, retailers and others who connect the company to its buyers.
Relationship marketing: Customer lifetime value
Customer lifetime value (CLV) refers to the value of an entire stream of purchases that the customer would make over a lifetimeof patronage
Capturing value from customers
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Building the right relationship with the right customers
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Changing marketing landscape
1. The digital age (online, mobile and social media marketing) 2. The challenging world economy 3. Measuring marketing’s contribution to organisational performance 4. Growth of not-for-profit (NFP) marketing 5. Rapid globalisation 6. Sustainable marketing
The digital age
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Information revolution is creating a new environment
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Convergence of telecommunications, media and technology (TMT) –computer systems, information services and electronics
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Transformation of alliance networks
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Accelerating change and the emergence of new global competitors
Measuring marketing’s contribution to organisational performance
Businesses exist to create wealth for their owners, while not-for-profit organisations seek to survive in order to continue satisfying those who depend on them.
•
Marketers are challenged to show an impact in sales, profit and the ongoing success of the organisation.
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NFPand commercial organisations
Sustainable marketing: The call for more environmental and social responsibility
A further factor in today’s marketing environment is the increased call for companies to take responsibility for the social and environmental impact of their actions.
•
Ethics and environmental movements are placing even stricter demands on companies as time passes.