CHAPTER 1 & 2

CHAPTER 1

MARKETING DEFINITON:FIRMS CREATING VALUE AND BUILD STRONG CUSTOMER RELATIONSHIPS TO CAPTURE CUSTOMER VALUE

MARKETING PROCESS

  1. Understand the marketplace and customer needs and wants
  1. Design a customer-driven marketing strategy
  1. Construct an integrated marketing programme that delivers superior value
  1. Build profitable relationships and create customer delight
  1. Capture value from customers to create profits and customer equity

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NEEDS – states of felt deprivation

WANTS – needs shaped by culture and personality

DEMANDS – wants backed by buying power

MARKET OFFERING: combination of products, services, information or experiences offered to satisfy a need or want

MARKETING MYOPIA: mistake made by marketers by focusing more on product than benefits and experiences produced by the product

5 PHILOSOPHIES

THE PRODUCTION CONCEPT = consumers favour accessible, highly affordable products

THE PRODUCT CONCEPT = consumers favour products that offer quality, performance and innovation

THE SELLING CONCEPT = consumers will only buy when there’s large-scale selling and promotion

THE MARKETING CONCEPT = firms should deliver on the needs and wants of target markets better than competitors

MARKETS: the set of all actual and potential buyers of a product or service

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THE SOCIETAL MARKETING CONCEPT =balancing business profits, consumer wants and society’s interests

PREPARING AN INTEGRATED MARKETING PLAN AND PROGRAMME - build customer relationships by transforming the marketing strategy into action

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) = process of building and maintaining profitable customer relationships by delivering superior customer value (customers will buy from the firm that offers the highest customer perceived value) and satisfaction (the extent to which the perceived performance of a product matches the customer’s satisfaction)

MARKETING MIX = product (satisfies a customer need), price (how much to charge for the offer), place (how the offer will be made available to the consumer) and promotion (how to communicate with customers and persuade them of the merits of the product)z

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CUSTOMER LOYALTY AND RETENTION = delighted customers remain loyal and talk favorably about the firm and its products

GROWING SHARE OF CUSTOMER = this is an increase in the portion of a customer’s purchasing in the firm’s product categories

CUSTOMER EQUITY = this is the combined discounted customer lifetime values of all the firm’s current and potential customers; the more loyal the firm’s profitable customers, the higher the customer equity

EXCHANGE: customers respond positively to an offering by buying what they desire

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CAPTURING VALUE FROM CUSTOMERS

STRANGERS = low profitability and little loyalty

BUTTERFLIES = profitable but not loyal

TRUE FRIENDS = profitable and loyal

BARNACLES = highly loyal but not profitable

THE NEW MARKETING LANDSCAPE: the new digital age, rapid globalization, ethics and social responsibility and growth of not-for-profit marketing

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FIRMS RELATE WITH MORE CAREFULLY SELECTED CUSTOMERS: selective relationship management

RELATE FOR THE LONG TERM: using customer relationship management to retain current customers

FIRMS RELATE DIRECTLY for the convenience of a consumer

CHAPTER 2

A MISSION STATEMENT = short statement of why an organization exists, what its overall goal is, identifying the goal of its operations, what kind of product or service it provides, its primary customers or market, and its geographical region of operation

BUSINESS PORTFOLIO = company's set of investments, holdings, products, businesses and brands

STEPS IN STRATEGIC PLANNING

MARKET PENETRATION = measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service

MARKET DEVELOPMENT = growth strategy that identifies and develops new market segments for current products

A DIVERSIFICATION STRATEGY = the strategy that an organization adopts for the development of its business

STRATEGIC PLANNING = organisational management activity used to:

  • set priorities
  • focus energy and resources
  • strengthen operations
  • ensure employees and other stakeholders are working toward common goals
  • establish agreement around intended outcomes/results
  • assess and adjust the organisation's direction in response to a changing environment

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DOG: low market share and is in a low rate of growth

CASH COW: low-growth, high share business/products

QUESTION MARK: low share business units in high growth markets

STAR: high growth and high share business/product

DOWNSIZING = reduction in organizational size and operating costs implemented by management in order to improve organizational efficiency, productivity, and/or the competitiveness of the organization

THE 4 Cs

SBUs - defined in terms of their market growth rate and market share

CUSTOMER SOLUTION = product

CUSTOMER COST = price

CONVENIENCE = place

COMMUNICATION = promotion

RETURN ON MARKETING INVESTMENT

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  1. Defining the firm’s mission
  1. Setting firms’ objective and goals
  1. Designing the business portfolio
  1. Planning marketing and other functional strategies

IS THE MARKETING BUDGET WELL SPENT ?

NET RETURN on marketing investment is divided by the marketing investment costs

Difficult to measure impact in monetary value

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