Chapter 1 Marketing

What is marketing?
• The process of which companies create value for customers
• build strong customer relationship
• in order to capture value from customers in return

The marketing process

1. Understand the market place and customers’ needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationship and create customer delight
5. Capture value from customers to create profits and customers equity

Customer-driven marketing strategy

1. Market segmentation - dividing the market into segments of customers
2. Target marketing - selecting which segments to go after
3. Differentiation - differentiating the market offering to create superior customer value
4. Positioning - arranging a product to occupy a place relative to competing products in minds of customers

Marketing management orientations

1. Production concept
1. This concepts hold that consumers will favour products that are
1. Available
2. Highly affordable
2. Management should focus on
1. Improving production
2. Distribution efficiency
3. Marketing myopia
1. Mistake of paying more attention to the specific products
2. Rather than benefits and experiences produced by the products
2. Product concept
1. This concepts hold that consumers will favour products that
1. Offer the most in quality, performance and innovative
2. Management should focus on
1. Making continuous product improvements
3. Marketing myopia
3. Selling concept
1. This concepts hold that consumers will
1. Not buy enough of the firm’s products unless
1. It undertakes large-scale selling and promotion effort
2. Focus on creating sales transactions rather than building long term customer relationship
3. Aim to sell what the company make rather than what the market want
4. e.g. insurance and blood donation
5. Inside out perspective (Design first and promote later)
4. Marketing concept
1. This concepts hold that achieving organizational goals depends on
1. Knowing the needs and wants of target markets
2. Delivering desired satisfaction better than competitor
3. Focus on customer
2. Outside in perspective (Survery first, design later)