CHAPTER 1 & 2
CHAPTER 1
MARKETING DEFINITON:FIRMS CREATING VALUE AND BUILD STRONG CUSTOMER RELATIONSHIPS TO CAPTURE CUSTOMER VALUE
MARKETING PROCESS
- Understand the marketplace and customer needs and wants
- Design a customer-driven marketing strategy
- Construct an integrated marketing programme that delivers superior value
- Build profitable relationships and create customer delight
- 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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- Defining the firm’s mission
- Setting firms’ objective and goals
- Designing the business portfolio
- 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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