WEEK 1:

Introduction
to
Marketing
SIT DOLOR AMET
What is Marketing?

1. Marketing must attract new customers as well as retain/grow current customers

2. All organizations need to perform marketing functions
3. Non-profits (universities, hospitals, churches, politicians, etc…) all perform marketing
functions

Marketing involves engaging customers and managing profitable

customer relationships
Marketing Defined

1. Marketing as the process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return
(Armstrong, et. al., 2020)

2. Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large (American Marketing Association, 2017)
Marketing Defined

1. Marketing as the process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return
(Armstrong, et. al., 2020)

2. Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large (American Marketing Association, 2017)
How do marketers engage, build
relationships, and create value ?
 Create value for customers Capture value from customers

Construct an Engage customers,

Understanding the Capture value from
Design a customer integrated build profitable
marketplace and customers to create
driven marketing marketing program relationships, and
consumer needs & profits and
strategy that delivers create customer
wants customer quality
superior value delight

The Marketing Process

Core Customer and
Marketplace Concepts
1. Needs, wants, and demands

2. Market offerings

3. Value and satisfaction

4. Exchanges and relationships

5. Markets
 Needs Wants Demands

Basic part of human makeup Needs shaped by culture and personality Wants backed by buying power
State of felt deprivation A person needs food, but wants a Big Mac When people are willing to pay for something
Physical - food, clothing, warmth, and safety they want, it becomes a demand
Social - belonging and affection
Individual needs - knowledge and self-
expression

Outstanding marketing companies go to great lengths to learn

and understand their customers’ needs, wants, and demands
Market Offerings

PRODUCTS SERVICES INFORMATION EXPERIENCES

Marketing Myopia
Mistake of paying more attention to your product line
rather than the benefits and experiences these products
give
 Customer Value &
Satisfaction
1. Customers form expectations about the value and
satisfaction that various market offerings will deliver and buy
accordingly
◦ Satisfied customers buy again and tell others about their good
experiences
◦ Dissatisfied customers switch to competitors and disparage the
product to others

2. Customer value and customer satisfaction are key building

blocks for developing and managing customer relationships
◦ Low expectations may fail to attract buyers
◦ High expectations may disappoint buyers
Exchanges and Relationships
Exchange is the act of obtaining a desired
object from someone by offering something
in return

Marketing consists of actions taken to

build and maintain desirable exchange
relationships with target audiences

Strong relationships are built by consistently delivering superior customer value

Set of actual and potential buyers of a product Sellers must search for and engage buyers, In addition to customer relationship
or service identify their needs, design good market management, today’s marketers must also
offerings, set prices for them, promote them, deal effectively with customer-managed
and store and deliver them. relationships.

Markets
 A Modern
Marketing System
 What customers will
we serve?
•What is our target market?
Marketing
Management How can we serve
these customers best?
•What is our value
proposition?
Selecting Customers to Serve
BEER TARGETING A YOUNGER CROWD SCOTCH TARGETING AN OLDER CROWD
Choosing a
Value
Proposition
What Philosophy Guides the
Marketing Strategy?
• Available
Production Concept • Affordable
• Quality/Performance
Product Concept • Innovative Features
• Aggressive selling
Selling Concept • Promotion
• Knowing needs of target market
Marketing Concept • Satisfying customers better than competitors
Societal Marketing • Short term wants vs. long term welfare
Concept • Shared value
 Careful strategic planning
Preparing
An
Integrated Need to clearly answer the 2
previous questions
Marketing
Plan
Should have a 1-year plan
 •Product •Price
Brand name MRP
Variety
Quality Discounts
Features
Payment Period
4 P’s of
Packaging
Sizes Credit

Marketing Distribution Channels

Sales
Advertising
Coverage
Inventory Sales force
Transport
Locations
Direct marketing
Public relations

•Place •Promoti
on
 Customer relationship management

Managing Customer-engagement marketing

Customer
Relationships Consumer-generated marketing

Partner relationship management

Customer Relationship
Management

Acquiring
Keeping
Growing
Relationship Building Blocks
CUSTOMER VALUE SATISFACTION

Customer’s evaluation of the difference Extent to which a product’s perceived

between all the benefits and all the costs of performance matches a buyer’s
a market offering relative to those of expectations
competing offers
◦ Customers often do not judge values and
costs “accurately” or “objectively”
Perceived
◦ They act on perceived value Expectations
Performance
Customer Relationship Levels and
Tools
LEVELS TOOLS

Low-margin customers Frequency marketing programs

Full partnerships Loyalty rewards programs

High-margin customers Club marketing programs

Customer Engagement and
Today’s Digital, Mobile, and
Social Media
•Customer-engagement marketing makes the brand a
meaningful part of consumers’ conversations and lives

•Customer-managed relationships and brand advocacy

•Marketers must find ways to enter consumers’

conversations with engaging and relevant brand
messages

•Simply posting a humorous video, creating a social media

page, or hosting a blog isn’t enough
Consumer-Generated Marketing
Brand exchanges created by consumers
◦ Consumers play an increasing role in shaping their own
brand experiences and those of other consumers.

Uninvited and Invited

◦ Consumer-to-consumer exchanges
◦ Consumers invited by companies
◦ New product and service ideas
◦ Active role in shaping ads and social media content
◦ Create buzz around reintroduction of products

Anticipate potential negative consequences

 Working closely with others both inside and
outside the company to jointly engage and
Partner bring more value to customers
◦ Partners inside the firm—cross-functional
Relationship teams
Management ◦ Partners outside the firm—suppliers,
distributors, retailers
 Creating Creating customer loyalty and retention

Capturing
Value from Growing Growing share of customer
Customers

Building Building customer equity

Creating Customer
Loyalty and Retention
Keeping customers loyal makes good economic sense.

Customer lifetime value is the value of the entire stream of

purchases a customer makes over a lifetime of patronage.

Customer defections can be costly

◦ Can lose that customer’s lifetime value
◦ May cause other customers to defect
 Portion of the customer’s
purchasing that a company gets in
its product categories
Growing
Share of
Customer
Share of Customer is increased by:
Great customer Offering greater Creating programs to
relationship variety to current cross-sell and up-sell
management customers to existing customers
Building Customer Equity
Total combined customer lifetime values of all of the company’s customers

Measures the future value of the company’s customer base

Increases when the loyalty of the firm’s profitable customers increases

The value of a company comes from the value of its current and future customers.
Building the
Right
Relationships
with the
Right
Customers