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Chapter 1

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Department
Commerce
Course
COMM 131
Professor
Jacob Brower
Semester
Winter

Description
Marketing Chapter 1: Creating and Capturing Customer Value January 8, 2012 What is Marketing? - Managing profitable customer relationships - Goal is to attract new customers but promising superior value and to keep/grow current customers by delivering satisfaction Marketing Defined - Marketing must be understood in the sense of satisfying customer needs - The aim of marketing is to make selling unnecessary - Marketing: 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 - Companies understand consumers, create customer value, and build strong relationships - Companies reap rewards of creating superior customer value Understand Design a Construct an Build Capture value the customer- integrated profitable from and customer driven program that rand createps create profits needsand marketing delivers customer and customer wants strategy superior value delight equity Understanding The Marketplace and Customer Needs Customer Needs, Wants, and Demands - Needs: states of felt deprivation (physical, social, individual) - Wants: the form human needs take as shaped by culture and individual personality - Demands: human wants that are backed by buying power Market Offerings – Products, Services, and Experiences - Consumer 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 - Include people, places, organizations, information, and 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 - Brand Experiences: created by orchestrating several products and services Customer Value and Satisfaction - Customers form expectations about the value and satisfaction that various market offerings will deliver - Satisfied customers buy repeatedly and tell others about their good experiences - Dissatisfied customers switch to competitors and disparage the product to others Exchanges and Relationships - Marketing occurs when people decide to satisfy needs and wants through exchange relationships - Exchange: the act of obtaining a desired object by offering something in return - Marketing consists of actions taken to maintain desirable exchange relationships with target audiences involving a product, service, idea, or object Markets - Market: the set of all actual and potential buyers of a product or service - Buyers in a market share needs/wants - Core marketing activities include research, product development, communication, distribution, pricing, and customer service - Marketers must deal with customer-managed relationships - The company and competition research the market and interact with consumers to understand their needs - Companies create and send market offerings to consumers Designing a Customer-Driven Marketing Strategy - Marketing Management: choosing target markets and building profitable relationships with them - Marketing manager’s aim: find, attract, keep, and grow target customers by creating, delivering, and communicating superior value - Two Questions: - What customers will we serve? - How can we serve these customers best? Selecting Customers to Serve - Segment the market (market segmentation) - Select segments the company will go after (target marketing) - Marketing management is customer management and demand management Choosing a Value Proposition - Decide how to differentiate and position itself in the market - Value Proposition: set of benefits or values it promises to deliver to consumers to satisfy their needs Marketing Management Orientations - Design strategies that will build profitable relationships with target customers - 5 Key Concepts: production, product, selling, marketing, and societal marketing 1. Production Concept - Consumers will favor highly available and affordable products - Focus on improving production and distribution efficiency - eg. Lonovo Computers 2. Selling Concept - Consumers will favor products that offer most in quality, performance, and innovation - Strategy focuses on making continuous product improvements - Focusing only on products can lead to marketing myopia - ie. Companies make a better mousetrap, however customers look for a better solution to the problem – chemical spray, house cat, etc. 3. Selling Concept - Consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort - Used with unsought goods – consumers don’t normally think of buying (ie. insurance, blood donations) - Aggressive selling carries high risk - Focus on creating sales rather than long-term customer relationships - Inside-out perspective (starts with factory, focus on existing products) 4. Marketing Concept - Achieving organizational goals depends on knowing the needs and wants of target markets and delivering desired satisfactions better than competitors - Find the right products for your customers - Outside-in perspective (starts with market, focus on customer needs) - Goal to lead customers where they want to go, before they know where they want to go 5. Societal Marketing Concept - Companies marketing decisions consider consumers’ wants, the company’s requirements, consumers’ long-run interest,
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