Chapter 1

(Plus Section of Chapter 2)

Marketing in a Changing World: Creating Customer Value and Satisfaction

What is Marketing?

(pp. 5-6)

The process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. (p. 6) Simply put: Marketing is the delivery of customer satisfaction at a profit. (p. 5)
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Marketing Strategy g Marketing Mix

The 4 Ps, Tactical Tools
(Fig. 2.6, pp. 67-68) Product (Customer Solution)
Goods-and-service combination that a company offers a target market
(The 4 Cs)

Price (Customer Cost)

Amount of money that consumers have to pay to obtain the product

Target Customers Intended Positioning Activities that persuade target customers to buy the product
Advertising Personal Selling Sales Promotion Public Relations

Company activities that make the product available

Promotion

(Communication)

Place (Convenience) 3

Core Marketing Concepts

(Fig. 1.1, pp. 6-13) Needs, wants, and demands

Markets

Products and services

Exchange, transactions, and relationships

Value, satisfaction, and quality

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What are Consumers Needs, Wants and Demands? (pp. 6-7)

Needs - state of felt deprivation for basic items such as food and clothing, and complex needs such as for belonging. (i.e. I am hungry.) Wants - form that a human need takes as shaped by culture and individual personality. (i.e. I want a hamburger, French fries, and a soft drink.) Demands - human wants backed by buying power. (i.e. I have money to buy this meal.)
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What Will Satisfy Consumers Needs and Wants? (pp. 7-8)

Anything that can be offered to a market to satisfy a need or want
Experiences Persons Places

Products

Organizations

Information

Ideas

Services Activities or benefits offered for sale that are essentially intangible and dont result in the ownership of anything

Caution: Avoid Marketing Myopia (pp. 8, 18)

How Do Consumers Choose Choose Among Products & Services? (pp. 9-11)

Customer Value Value gained from owning a product less the costs Customer Satisfaction Perceived performance in providing value, relative to expectations Quality Total quality management (TQM) continuous improvement Caution: Avoid Marketing Myopia
(pp. 8, 18)
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How Do Consumers Obtain Products and Services? (p. 11)

Exchanges
The core concept of marketing

Transactions

Relationships
Building a marketing network with supporting stakeholders

(p. 14) Relationship Marketing & Customer Lifetime Value

Who Purchases Products and Services? (pp. 12-13)

Needs or wants

Market
Actual and potential buyers who share a particular need or want that can be satisfied through an exchange or relationship. Actual buyers

Resources to exchange

Willingness to exchange

Potential buyers

Connections With Customers

(p. 14)

Most marketers are targeting fewer, potentially more profitable customers. Asking:

What value does the customer bring to the organization? Are they worth pursuing? keeping current customers, and building lasting relationships based on superior satisfaction and value. 10

Focus has shifted to:

Marketing Management
Marketing Management
Implementing programs to create exchanges with target buyers to achieve organizational goals

(p. 14)

Demand Management
Finding and increasing demand, also changing or reducing demand such as in Demarketing

Profitable Customer Relationships

Attracting new customers and retaining and building relationships with current customers

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Marketing Management Philosophies

(pp. 15-22) Based on different assumptions about: - what customers want - what marketers should do

Production Concept Product Concept Selling Concept Marketing Concept

Societal Mktg. Concept

Consumers favor products that are

available and highly affordable. Consumers favor products that offer the most quality, performance, and innovative features. Consumers will buy products only if the company aggressively promotes/ sells these products. Focuses on needs & wants of target markets & delivering satisfaction better than competitors. Focuses on needs & wants of target markets & maintaining or improving societal and customer well-being.

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Production Concept
(Still appropriate under these limited circumstances)

Late 1800s & Early 1900s Demand > Supply; High Costs

(pp. 16-17)

Consumers Favor:

Widely available Highly affordable

Managements Focus:

engineer

Improving production efficiency Improving distribution efficiency

Fails to recognize customer needs/wants

Late 1940s (Post World War II) Demand < Supply

Product Concept

(p. 18)

Consumers Favor:

Quality, performance Innovative features

Managements Focus:

inventor

Make superior products (build a better mousetrap) Make continuous improvements

Focus on physical products, not customer needs & wants Fall in love with the product, not the customer o Customers dont need or want (just dont care) o Over-improve o New technology replaces

Danger: Marketing Myopia

Late 1940s (Post World War II) Demand < Supply

Selling Concept

(p. 18)

Consumers Favor:

Not buying or not buying enough Large-scale selling and promotion efforts Coaxing & pushing people to buy

Managements Focus: hard-sell salesman

Danger: Sell what you can make

(versus Make what you can sell)

Marketing Concept
1950s Present Demand < Supply

(pp. 18-20)

Consumers Favor:

Products that satisfy their needs and wants Understanding the needs and wants of consumers Satisfying them more efficiently and more effectively than competitors

Managements Focus: customer oriented

(NOTE: Efficiency & effectiveness - keeps the best of the production & product concepts) (Focuses on the underlying and latent needs as well as the stated needs)

Marketing and Sales Concepts Contrasted (Fig. 1.4, pp. 18-20)

Starting Point
Factory

Focus
Existing Products

Means
Selling and Promoting

Ends
Profits through Volume

The Selling Concept (inside-out)

Market

Customer Needs

Integrated Marketing

Profits through Satisfaction

The Marketing Concept (outside-in)

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Societal Marketing Concept

Late 20th Century Still emerging Recognizes potential conflict (pp. 20-22)
(Societal & customer well-being)
Maintain & improve long-term well-being Social responsibility Ethics Environment Do good Stop doing bad

Society

Societal Marketing Concept

(Short-term wants)

Consumers

Company
(Profits)
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Chapter Review

(pp. 36-37)

Define what marketing is and discuss its core concepts. Explain the relationships between customer value, satisfaction, and quality. Define marketing management and examine how marketers manage demand and build profitable customer relationships. Compare the five marketing management philosophies.
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