Marketing Unit 1:
Creating Customer Relationships and Value through Marketing:
What is marketing?
• Good marketing is not easy, every year thousands of new products fail in the
• Marketing is the activity of creating, communicating, delivering, and exchanging
offerings that benefit the organization, its stake holders and society at large
Marketing focuses on: Discovering and satisfying consumer needs
What four factors are needed for Marketing to occur?: The four factors are 1. Two or
more parties (Individuals or organizations) with unsatisfied needs; 2. A desire and ability
to have their needs satisfied; 3. A way for the parties to communicate; and 4. Something
Marketing your career:
• Marketing affects all individuals, all organizations, all industries, and all
• This knowledge should make you a better consumer, enable you to be a more
informed citizen, and help you in your career planning.
Marketing: delivering benefits to the Organization, Its Stakeholders, and society:
• The American Marketing Association represents marketing professionals.
Combining its 2004 and 2007 definitions,
• “Marketing is the activity for creating, communicating, delivering, and
exchanging offerings that benefit its customers, the organization, its stake holders
and society at large”
• To serve both buyers and sellers, marketing seeks (1) to discover the needs and
wants of prospective customers and (2) to satisfy them.
• Exchange: is the trade of things of value between buyer and seller so that each is
better off after the trade.
The Diverse Factors Influencing Marketing Activities:
• An organization’s marketing activity focuses on assessing and satisfying
consumer needs, countless other people, groups and forces interact to shape the
nature of its activities
• Foremost is the organization itself, whose mission and objectives determine what
business it is in and what goals it seeks.
• With in the organization management is responsible for establishing these goals.
• The marketing department works closely with a network of other departments and
employees to help provide the customersatisfying products required for the
organization to survive and prosper.
• Organizations marketing decisions are affected by and, in turn, often have an
important impact on society as a whole. • The organization must strike a balance among the sometimesdiffering interests of
these individuals and groups.
• It is not possible to simultaneously provide the lowestpriced and highestquality
products to customers and pay the highest prices to suppliers, the highest wages to
employees, and the maximum dividends to shareholders.
What Is Needed for Marketing to Occur:
• At least four factors are required (1) two or more parties (individuals or
organizations) with unsatisfied needs, (2) a desire and ability on their part to be
satisfied, (3) a way for the parties to communicate, and (4) something to
Two or More Parties with Unsatisfied Needs:
• You’ve developed an unmet need a desire for information about latebreaking
celebrity news but you don’t yet know that People magazine exists.
Desire and Ability to Satisfy These Needs:
• Both you and the bookstore owner want to satisfy these unmet needs.
A Way for the Parties to Communicate:
• The marketing transaction of buying a copy of People will never occur unless you
know the product exists and its location.
• Similarly, the storeowner won’t stock the magazine unless there’s a market of
potential buyers nearby.
• When you receive a free sample in the mail or see the magazine on display in the
bookstore, this communications barrier between you (the buyer) and your
bookstore (the seller) is overcome.
Something to Exchange:
• You exchange your money for the bookstore’s magazine.
• Both you and the bookstore have gained something and also given up something,
but you are both better off because you have each satisfied your unmet needs.
• You have the opportunity to read People, but you gave up some money; the store
gave up the magazine but received money, which enables it to remain in business.
Discovering Consumer Needs:
• When Apple built its first Apple II personal computer and started a new industry,
consumers didn’t really know what the benefits would be. So they had to be
educated about how to use personal computers.
• In contrast, Bell a U.S. bicycle helmet maker, listened to its customers, collected
hundreds of ideas, and put several into its new products.
The Challenge: Meeting Consumer Needs with New Products:
• Newproduct experts generally estimate that up to 94 percent of the more than
40,00 new consumable products (food, beverage, health, beauty, and other
household and pet products) Don’t succeed in the long run • Robert M. McMath, who has studied more than 110,000 of these newproduct
launches has two key suggestions: (1) Focus on what the customer benefit is, and
(2) learn from the past
Consumer Needs and Consumer Wants:
• Should marketing try to satisfy consumer needs or consumer wants? Marketing
tries to do both.
• Discovering needs involves looking carefully at prospective customers.
• A principle activity of a firm’s marketing department is to scrutinize its consumers
to understand what they need and want and the forces that shape those needs and
What a Market Is:
• Potential consumers make up a market, which is with both the desire and the
ability to buy a specific offering.
• All markets ultimately are people.
• Even when we say a firm bought a Xerox copier, we mean one or several people
in the firm decided to buy it.
• People who are aware of their unmet needs may have the desire to buy the
product, but that alone isn’t sufficient.
• People must have the ability to buy, such as the authority, time, and money.
Satisfying Consumer Needs:
• Marketing doesn’t stop with the discovery of consumer needs.
• The organization can’t satisfy all consumer needs, so it must concentrate its
efforts on certain needs of a specific group of potential consumers.
• This is the Target Market: one of more specific groups of potential consumers
toward which an organization directs its marketing program.
The Four Ps: Controllable Marketing Mix Factors:
• Having selected its target market consumers, the firm must take steps to satisfy
• (1. Find potential consumers 2. Get information about their needs 3. Discover
consumer needs 4. Create concepts for products 5. Satisfy consumer needs by
designing a marketing program having the right combination of the Four Ps)
• Some one in the organizations marketing department often the marketing
manager, must develop a complete marketing program to reach consumers by
using a combination of four tools (The Four Ps)
1. Product: A good, service, or idea to satisfy the consumer’s needs.
2. Price: What is exchanged for the product
3. Promotion: A means of communication between the seller and buyer.
4. Place: A means of getting the product to the consumer.
Designing an effective marketing mix conveys to potential buyers a clear customer value
proposition: A cluster of benefits that an organization promises customer to satisfy their
needs. • Walmart’s customer value proposition can be summed up as “ everyday low
prices for a broad range of products that are always in stock in convenient
Uncontrollable, Environmental Forces:
• Environment forces in a marketing decision, those involving social, economic,
technological, competitive, and regulatory forces.
• Examples of this are: What consumers themselves want and need, changing
technology, the state of the economy in terms of whether it is expanding or
contracting, actions that competitors take, and government restrictions.
The Marketing Program: How Customer Relationships are built:
• An organization’s marketing program connects it with its customers.
• Critically important concepts are: Customer value, customer relationships, and
Customer Value and Customer Relationships:
• Intense competition in today’s fastpaced domestic and global markets has caused
massive restructuring of many of American industries and businesses.
• This has prompted many successful U.S. firms to focus on “customer value”
• That firms fain loyal customers by providing unique value is the essence of
• What is new, however, is a more careful attempt at understanding how a firm’s
customer perceives value and then actually creating and delivering that value.
• Customer value: Is a unique combination of benefits received by targeted buyers
that include quality, convenience, and ontime delivery, and both beforesale and
aftersale service at a specific price
• Loyal, satisfied customers are likely to repurchase more over time. Firms now
actually try to place a doll