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Chapter 1

COMM 131 Chapter Notes - Chapter 1: Customer Satisfaction, Market Segmentation, Marketing Management


Department
Commerce
Course Code
COMM 131
Professor
Jacob Brower
Chapter
1

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WHAT IS MARKETING?
It deals with customers
It is managing profitable customer relationships
2 goals of marketing:
o Attract new customers by promising superior value
o Grow current customers by delivering satisfaction
Everyone uses marketing including large companies and not for profit organizations
MARKETING DEFINED
Marketing isn’t only selling and advertisements
o This is only the tip of the iceberg
It is satisfying customer needs
If the marketer understands the customer, then they are able to develop products that provide superior
customer value than the competition
The aim of marketing is to make selling unnecessary
o You just have the build customer relationships and they will come to you on their own
It is a social and managerial process by which individuals and organizations obtain what they need and want
through creating and exchanging value with others
Business context: marketing involves building profitable, value-laden exchange relationships with customers
HENCE, we define marketing a the process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return
THE MARKETING PROCESS
In the first 4 steps, the company works to understand consumers, create customer value, and build strong
relationships
In the final step, companies reap the rewards of creating this customer value
By creating value FOR consumers, they in turn capture value FROM consumers in the form of sales, profits, and
long-term customer equity
STEP 1: CUSTOMER NEEDS, WANTS, AND DEMANDS
The most basic concept underlying marketing is that of human needs
Human needs are state of felt deprivation. They include:
o Basic physical needs for food, clothing, warmth, and safety
o Social needs for belonging and affection
o Individual needs for knowledge and self-expression
o Note: these needs weren’t created by marketers; they are a basic part of the human makeup

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Wants: the form human needs take as they are shaped by culture and individual personality
o A person needs food, but wants a breakfast sandwich from Subway
o Wants are shaped by one’s society as well as by marketing programs
o They are described in terms of objects that will satisfy needs
o When backed by buying power, they become demands
Given their wants and resources (money), people demand products with benefits that add up to the most value
and satisfaction
Outstanding marketing companies: conduct consumer research and analyze large amounts of customer data
o Their people at all levels stay close to customers
STEP 2: MARKET OFFERINGS
Customers’ needs and wants are fulfilled through market offerings
Market offerings: some combination of products, services, information, or experiences offered to a market to
satisfy a need or want
They are not limited to physical products
They also include services actives or benefits offered for sale that are essentially intangible and do not result in
the ownership of anything
Market offerings also include entities such as persons, places, organizations, information and ideas
Many sellers make the mistake of paying more attention to the specific product they have to offer rather than
focusing on the benefits and experiences produced by these products
o These selling’s suffer from “marketing myopia
o They are so taken with their products that they focus only on existing wants and lose the sigh of
underlying customer needs
o They forget that a product is only a TOOL to solve a consumer problem
o EX: a customer might want an inch drill BUT what they really want is an inch sized hole in their wall
o These sellers will have a problem if a new product comes along that serves their need cheer and more
easily
They customer will have the same need, but will want a different product
Smart marketers look beyond the attributes of the product
By showing how the product or service will benefit the customer, they create brand experience
o EX: you don’t just watch a NASCAR race, you immerse yourself in the thrilling experience
STEP 3: CUSTOMER VALUE AND SATISFACTION
Many products can satisfy a customer’s needs
So how do they choose which one to buy?
o Customers form expectations about the value and satisfaction that various market offerings will
deliver…and then they buy according to that
o Dissatisfied customers often switch to competitors and tell others about bad product
Marketers need to be careful to set the right level of expectations
o If they set expectations too low, they may satisfy those who buy, but fail to attract enough buyers
o If expectations are too high, they will attract a lot of customers but won’t satisfy them
Customer value and satisfaction are key building blocked for developing managing customer relationship
STEP 4: EXCHANES AND RELATIONSHIPS
Marketing occurs when people decide to satisfy needs and wants through exchange relationships

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Exchange: is the act of obtaining a desired object from someone by offering something in return
The marketer tries to bring about a response to some market offering
o The response may be more than simply buying or trading products
o Ex: a political candidate may want votes not necessarily a product
Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences
o Beyond just attracting new customers, the company wants to retain customers and grow its business
o Marketers want to build strong relationships by consistently delivering superior customer value
MARKETS:
The concept of exchange and relationships lead to the concept of a market
Market: a set of all actual and potential buyers of a product
o These buyers share a particular need or want that can be satisfied through exchange relationships
Marketing means managing markets to bring about profitable customer relationships
o Making these relationships takes time
o Sellers need to search for buyers, identify their needs, design good market offerings, set prices, promote
them, store and deliver them
Core marketing activities: consumer research, product development, communication, distribution, pricing, and
service
Buyers also market they do marketing when they search for products and interact with companies to obtain
information about products
o Technology has now made marketing an interactive affair
o It’s no longer “how should we reach customers”, the question is now “how can customers reason us”
These are the main elements of the marketing system
Marketing involves serving a market of final consumers in the face of competition
The company and competitors research the market and interact with consumers to understand needs
THEN, the create and send their market offering and messages to customers
All parties in the system are effected by major environment forces demographic, economic, physical,
technological, political/legal, and social/cultural
Each party in the system adds value for the next level
Arrows: represent relationships that must be developed and managed
THUS, a company’s success at building profitable relationships depends on its own actions AND on how well the
entire system serves the needs to the final consumer
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