Principles of Marketing
Chapter 1
Define marketing and outline the steps in the marketing process (p.6-8)
Marketing is about satisfying consumer needs.
Marketing is defined as ‘’a social and managerial process by which individuals and groups obtain
what they need and want through creating and exchanging products and value with others’’
Marketing is also defined as ‘’the process by which companies create value for customers and build
strong consumer relationships in order to capture value from customers in return’’
Five-step model of the marketing process:
1. Understand the marketplace and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing programme that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity
In the first four steps, companies work to understand consumers, create customer value and build
strong customer relationships. In the final step, companies reap the rewards of creating superior
customer value. By creating value FOR consumers, they in turn capture value FROM consumers in the
form of sales, profits and long-term customer equity.
In Business-to-Business (B2B) marketing, professional organizations exchange products of value to
each other. In this case marketing is an exchange between similar individuals and groups. This
contrasts with Business-to-Customer (B2C) markets where marketing is not an exchange between
similar individuals and groups. Marketing is a managerial process pursued to fulfill their needs and
wants, while the consumer is trying to fulfill their needs and wants while just living their life. With
this difference in mind, the definition of marketing identifies marketing’s unique contribution to an
organization and the demands it imposes.
WHAT IS MARKETING?
A managerial process deployed by an organization (individual or group)
WHAT IS ITS OBJECTIVE
To fulfill the needs and wants of the deploying organization. These could be anything. They could be
to maximize profits, although the objective of commercial marketers is to achieve sales targets or
market share objectives. More generally, the objective for a profit or non-profit organization could be
to change the needs and wants of other individuals or groups. For example: the want of individuals
for a product or to vote for a political candidate.
HOW IS THIS ACHIEVED?
A social process whereby other individuals or groups obtain needs and wants by creating and
exchanging products and value. This limits how the deploying organization behaves. It has to
understand the needs and wants of other individuals or groups and changes itself so that it can create
products and value that it can exchange.
,Describe the 5 core customer and marketplace concepts
The 5 core customer and marketplace concepts are:
- needs, wants and demands
Human needs are states of felt deprivation. They include basic physical needs for food, clothing,
warmth and safety, social needs for belonging and affection; and individual needs for knowledge and
self/expression.
Human wants are human needs take as they are shaped by culture and individual personality. We
NEED food, but we WANT different dishes. Humans have unlimited wants, but they have limited
resources so they want to choose products that provide the most satisfaction for their money.
If human wants are backed by buying power, human wants become human demands.
- The market offering – products, services and experiences
Companies address (sturen) needs by putting forth a value proposition, a set of benefits that they
promise to customers to satisfy their needs. The value proposition is fulfilled through a market
offering – some combination of products, services, information or experiences offered to a market to
satisfy a need or want. These offers aren’t limited to physical products, they also include services,
activities or benefits offered for a sale that are essentially intangible and do not result in the
ownership of anything.
Smart marketers look beyond the attributes of the products and services they sell. They create brand
meaning and brand experiences, and not only the product. Many sellers make the mistake of paying
more attention to the specific products they offer than to the benefits and experiences produced by
these products.
- Value, satisfaction and quality
How do consumers choose among many market offerings that might satisfy a given need? Customers
form expectations about the value and satisfaction that various market offerings will deliver and buy
accordingly. If they are satisfied, customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the product or service to others.
Marketers must be careful to set the right level of expectations. If they set expectations too low, they
might satisfy those who buy but fail to attract enough buyers. If they raise expectations too high,
buyers will be disappointed. Customer value and customer satisfaction are key building blocks for
developing and managing customer relationships. The guiding concept is customer value: the
consumer’s assessment of the product’s overall capacity to satisfy his or her needs.
Customers often don’t judge product values and costs accurately or objectively: they act on
perceived value. Customer satisfaction is the extent to which a product’s perceived performance
matches a buyer’s expectations. If the product’s performance falls short of expectation, the buyer is
dissatisfied. If performance matches or exceeds expectations, the buyer is satisfied or delighted.
Satisfied customers make repeat purchases and tell others about their good experiences.
, - Exchanges, transactions and relationships
Marketing occurs when people decide to satisfy needs and wants through exchange relationships.
Exchange is the act of obtaining a desired object from someone by offering something in return. This
is only one of the many ways people can obtain a desired object. But as a means of satisfying needs,
exchange has much in its favour. People do not have to prey on others or depend on donations, nor
must they possess the skills to produce every necessity for themselves. They can concentrate on
making things they are good at making and trade them for needed items made by others
Exchange allows a society to produce much more than it would with any alternative system.
Exchange is the core concept of marketing. For an exchange to take place, several conditions must be
satisfied:
At least two parties must participate and each must have something of value to offer the
other.
Each party must also want to deal with the other party and each must be free to accept or
reject the other’s offer
Each party must be able to communicate and deliver
These conditions make exchange POSSIBLE. Wherether exchange actually TAKES PLACE depends on
the parties coming to an agreement.
A transaction is a marketing’s unit of measurement. It is defined as ’a trade between two parties
that involves at least two things of value, agreed-upon conditions, a time of agreement and a place of
agreement’. A transaction do not always involve money.
Transaction marketing is part of the larger idea of relationship marketing: the process of creating,
maintaining and enhancing strong, value-laden relationships with customers and other stakeholders.
The goal is to retain customers and grow their business with the company. Marketers want to build
strong relationships with customers, marketers also have to work at building long-term relationships
with distributors, dealers and suppliers. They build strong economic and social connections by
promising and consistently delivering high-quality products, good service and fair prices. Increasingly,
marketing is shifting from trying to maximize the profit on each individual transaction to maximizing
mutually beneficial relationships with consumers and other parties. A company wants to build a
unique company asset called a marketing network that consists of the company and all of its
supporting stakeholders.
Chapter 1
Define marketing and outline the steps in the marketing process (p.6-8)
Marketing is about satisfying consumer needs.
Marketing is defined as ‘’a social and managerial process by which individuals and groups obtain
what they need and want through creating and exchanging products and value with others’’
Marketing is also defined as ‘’the process by which companies create value for customers and build
strong consumer relationships in order to capture value from customers in return’’
Five-step model of the marketing process:
1. Understand the marketplace and customer needs and wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing programme that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity
In the first four steps, companies work to understand consumers, create customer value and build
strong customer relationships. In the final step, companies reap the rewards of creating superior
customer value. By creating value FOR consumers, they in turn capture value FROM consumers in the
form of sales, profits and long-term customer equity.
In Business-to-Business (B2B) marketing, professional organizations exchange products of value to
each other. In this case marketing is an exchange between similar individuals and groups. This
contrasts with Business-to-Customer (B2C) markets where marketing is not an exchange between
similar individuals and groups. Marketing is a managerial process pursued to fulfill their needs and
wants, while the consumer is trying to fulfill their needs and wants while just living their life. With
this difference in mind, the definition of marketing identifies marketing’s unique contribution to an
organization and the demands it imposes.
WHAT IS MARKETING?
A managerial process deployed by an organization (individual or group)
WHAT IS ITS OBJECTIVE
To fulfill the needs and wants of the deploying organization. These could be anything. They could be
to maximize profits, although the objective of commercial marketers is to achieve sales targets or
market share objectives. More generally, the objective for a profit or non-profit organization could be
to change the needs and wants of other individuals or groups. For example: the want of individuals
for a product or to vote for a political candidate.
HOW IS THIS ACHIEVED?
A social process whereby other individuals or groups obtain needs and wants by creating and
exchanging products and value. This limits how the deploying organization behaves. It has to
understand the needs and wants of other individuals or groups and changes itself so that it can create
products and value that it can exchange.
,Describe the 5 core customer and marketplace concepts
The 5 core customer and marketplace concepts are:
- needs, wants and demands
Human needs are states of felt deprivation. They include basic physical needs for food, clothing,
warmth and safety, social needs for belonging and affection; and individual needs for knowledge and
self/expression.
Human wants are human needs take as they are shaped by culture and individual personality. We
NEED food, but we WANT different dishes. Humans have unlimited wants, but they have limited
resources so they want to choose products that provide the most satisfaction for their money.
If human wants are backed by buying power, human wants become human demands.
- The market offering – products, services and experiences
Companies address (sturen) needs by putting forth a value proposition, a set of benefits that they
promise to customers to satisfy their needs. The value proposition is fulfilled through a market
offering – some combination of products, services, information or experiences offered to a market to
satisfy a need or want. These offers aren’t limited to physical products, they also include services,
activities or benefits offered for a sale that are essentially intangible and do not result in the
ownership of anything.
Smart marketers look beyond the attributes of the products and services they sell. They create brand
meaning and brand experiences, and not only the product. Many sellers make the mistake of paying
more attention to the specific products they offer than to the benefits and experiences produced by
these products.
- Value, satisfaction and quality
How do consumers choose among many market offerings that might satisfy a given need? Customers
form expectations about the value and satisfaction that various market offerings will deliver and buy
accordingly. If they are satisfied, customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the product or service to others.
Marketers must be careful to set the right level of expectations. If they set expectations too low, they
might satisfy those who buy but fail to attract enough buyers. If they raise expectations too high,
buyers will be disappointed. Customer value and customer satisfaction are key building blocks for
developing and managing customer relationships. The guiding concept is customer value: the
consumer’s assessment of the product’s overall capacity to satisfy his or her needs.
Customers often don’t judge product values and costs accurately or objectively: they act on
perceived value. Customer satisfaction is the extent to which a product’s perceived performance
matches a buyer’s expectations. If the product’s performance falls short of expectation, the buyer is
dissatisfied. If performance matches or exceeds expectations, the buyer is satisfied or delighted.
Satisfied customers make repeat purchases and tell others about their good experiences.
, - Exchanges, transactions and relationships
Marketing occurs when people decide to satisfy needs and wants through exchange relationships.
Exchange is the act of obtaining a desired object from someone by offering something in return. This
is only one of the many ways people can obtain a desired object. But as a means of satisfying needs,
exchange has much in its favour. People do not have to prey on others or depend on donations, nor
must they possess the skills to produce every necessity for themselves. They can concentrate on
making things they are good at making and trade them for needed items made by others
Exchange allows a society to produce much more than it would with any alternative system.
Exchange is the core concept of marketing. For an exchange to take place, several conditions must be
satisfied:
At least two parties must participate and each must have something of value to offer the
other.
Each party must also want to deal with the other party and each must be free to accept or
reject the other’s offer
Each party must be able to communicate and deliver
These conditions make exchange POSSIBLE. Wherether exchange actually TAKES PLACE depends on
the parties coming to an agreement.
A transaction is a marketing’s unit of measurement. It is defined as ’a trade between two parties
that involves at least two things of value, agreed-upon conditions, a time of agreement and a place of
agreement’. A transaction do not always involve money.
Transaction marketing is part of the larger idea of relationship marketing: the process of creating,
maintaining and enhancing strong, value-laden relationships with customers and other stakeholders.
The goal is to retain customers and grow their business with the company. Marketers want to build
strong relationships with customers, marketers also have to work at building long-term relationships
with distributors, dealers and suppliers. They build strong economic and social connections by
promising and consistently delivering high-quality products, good service and fair prices. Increasingly,
marketing is shifting from trying to maximize the profit on each individual transaction to maximizing
mutually beneficial relationships with consumers and other parties. A company wants to build a
unique company asset called a marketing network that consists of the company and all of its
supporting stakeholders.
