,Chapter 1
The aim of marketing is to create value for customers to capture value from them in return. The aim of
marketing is to make selling superfluous and to know and understand the customers. Customers are
reassessing how they engage with brands.
The goals of marketing are:
Ø To attract new customers by promising superior value
Ø To keep and grow current customers by delivering value and satisfaction.
We define marketing as:
Capturing value is happening through sales, profits, and long-term customer equity.
The marketing process is a simple five step model for creating and capturing customer value.
The five steps explained:
1) Understand the marketplace and the customer needs and wants. In this step we examine five core
customer and marketplace concepts:
1. Needs, wants, and demands.
Needs are states of felt deprivation. They include basic needs, social needs, and individual needs.
Wants are the form human needs take as they are shaped by cultural and individual personalities.
And demands are the human wants that are backed by buying power so, willingness and ableness
to buy
2. Market offerings. This is some combination of products, services, information, or experiences
offered to a market to satisfy a need or a want. They are not limited to physical products and
include other entities, such as persons, places, organizations, etc. Many sellers make the mistake of
paying more attention to the specific products a company offers than to the benefits and
experiences produced by these products. These sellers suffer from marketing myopia, they are
product orientated and not customer orientated. Smart marketers look beyond the attributes of
the products and services they sell.
3. Customer value and satisfaction. Customers form expectations about the values and satisfaction
that various marketing offers will deliver and buy accordingly. Satisfied customers buy again and
tell others about their experiences. Dissatisfied customers switch to competitors. Marketers must
, be careful to set the right level of expectations. Value and satisfaction are the key building blocks
for developing and managing customer relationships.
4. Exchanges and relationships. Marketing occurs when people decide to satisfy their needs and
wants through exchange relationships. Exchange is the act of obtaining a desired object from
someone by offering something in
return. Companies want to build
strong relationships by consistently
delivering superior customer value.
5. Markets. A market is a set of actual
and potential buyers of a product or
service. These buyers share a
particular need or want that can be
satisfied through exchange
relationships. Marketing means
managing markets to bring about
profitable customer relationships.
Marketing is not only carried out by sellers, but also buyers carry out marketing. Marketers must
therefore deal with customer-managed relationships. Where the question is: “How can our
customers influence us?”. In the model ‘A Modern Marketing System’ is showed what the main
elements in a marketing system are. The companies and competitors research the market and
interact with consumers to understand their needs. Then they create and exchange marketing
content with consumers through marketing intermediaries. A company’s success at engaging
customers and building profitable relationships depends on its own actions and on how well the
entire system serves the needs of final consumers.
2) Designing a customer value driven marketing strategy and plan. Marketing management can design a
customer driven marketing strategy. Marketing management is the art and science of choosing target
markets and building profitable relationships with them. The aim is to engage, keep, and grow target
customers by creating, delivering, and communicating superior customer value. The two main
questions here are:
1. What customers will we serve? This decision will be made by dividing the market into segments
and selecting which segment your company will go after. The company wants to select only
customers that can be profitable and that it can serve well. Marketing managers must decide which
customers they want to target and the level, timing, and nature of their demand. This is the part of
segmentation and targeting.
2. How can we serve these customers? The company must decide how it will differentiate and
position itself in the marketplace. A brand’s value proposition is the set of benefits or values it
promises to deliver to consumers to satisfy their needs. They answer the question “Why should I
buy your brand rather than a competitor?”. This is the part of differentiation.
3. Marketing management wants to design strategies that will engage target customers and build
profitable relationships with them. This is the part of positioning. There are five alternative
concepts which organizations design and carry out their marketing strategies:
- The production concept is the idea that consumers will favor products that are available and
highly affordable therefore the organization should focus on improving production and
distribution efficiency. This is a useful concept, but it can also lead to marketing myopia since
the producers is only focusing on the product and not on the consumers.
- The product concept is the idea that consumers will favor products that offer the most quality,
performance, and features. Therefore, the organization should devote its energy to making
continuous product improvements. Focusing only on the products can again lead to marketing
myopia.
- The selling concept is the idea that consumers will not buy enough of the firm’s products
unless the firm undertakes large-scale selling and promotion efforts. It is an inside-out view. It
focuses on creating sales transactions rather than building long-term profitable customer
, relationships. The aim is to sell what the company makes rather than to make what the market
wants
- The marketing concept is a philosophy in which achieving organization goals depends on
knowing the needs and wants of target markets and delivering the desired satisfaction better
than competitors do. It is an outside-in view. Customer focus and value are the paths to sales
and profits. The job is to find the right products for your customers.
- The societal marketing concept is the idea that a company’s marketing decisions should
consider consumer’s’ wants, the company’s requirements, consumers’ long-run interests, and
society’s long-run interest. It calls for sustainable marketing, socially and environmentally
responsible marketing that meets the present needs of consumers and businesses while also
preserving or enhancing the ability of future generations to meet their needs. Companies
should balance between company profits, consumer wants, and society’s interests.
3) Construct an integrated market program that delivers superior value. The integrated marketing
program is a comprehensive plan that communicates and delivers intended value. In this step the
chosen marketing strategy is transformed into action. It consists of the firm’s marketing mix:
1. Product. A need-satisfying market offering. The goal is to build strong brands.
2. Price. How much will the company charge for the offering. Create real value.
3. Place. How will it make the offering available to target consumers. So, how are demand and supply
chains managed.
4. Promotion. It must engage target consumers, communicate about the offering, and persuade
consumers of the offering merit. So, communicate the value proposition.
4) Engage customers and managing profitable customer relationships.
Customer relationship management is the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
Satisfied customers are more likely to be loyal and give the company a larger share of their business. A
customer buys from the firm that offers the highest customer-perceived-value. This is the consumers’
evaluation of the difference between all the benefits and all the costs of a market offering relative to
those of competing offers. Customers satisfaction is the extent to which perceived performance
matches a buyer’s expectation. Companies aim to delight customers by promising on what they can
deliver and then deliver more than they promised. Customer satisfaction results from the balance
between customer expectations and subjectively perceived performance. Together with customer-
perceived value customer satisfaction are relationship building blocks.
Marketers can use specific tools to develop stronger bonds with customers.
The new marketing is customer-engagement marketing. Which is making the brand a meaningful part
of consumers’ conversations and lives by fostering direct and continuous customer involvement in
shaping brand conversations, experiences, and community.
Marketers want to create customer brand advocacy by which satisfied customers initiate favorable
interactions with others about a brand.
One form of customer-engagement marketing is consumer-generated marketing. Here, the brand
exchanges created by consumers themselves by which consumers are playing an increasing role in
shaping their own brand experiences and those of other consumers. It creates credibility and trust.
Harnessing consumer-generated content, however, can be a time-consuming and costly process, and
companies may find it difficult to mine even a little gold from all the content submitted. Consumer
The aim of marketing is to create value for customers to capture value from them in return. The aim of
marketing is to make selling superfluous and to know and understand the customers. Customers are
reassessing how they engage with brands.
The goals of marketing are:
Ø To attract new customers by promising superior value
Ø To keep and grow current customers by delivering value and satisfaction.
We define marketing as:
Capturing value is happening through sales, profits, and long-term customer equity.
The marketing process is a simple five step model for creating and capturing customer value.
The five steps explained:
1) Understand the marketplace and the customer needs and wants. In this step we examine five core
customer and marketplace concepts:
1. Needs, wants, and demands.
Needs are states of felt deprivation. They include basic needs, social needs, and individual needs.
Wants are the form human needs take as they are shaped by cultural and individual personalities.
And demands are the human wants that are backed by buying power so, willingness and ableness
to buy
2. Market offerings. This is some combination of products, services, information, or experiences
offered to a market to satisfy a need or a want. They are not limited to physical products and
include other entities, such as persons, places, organizations, etc. Many sellers make the mistake of
paying more attention to the specific products a company offers than to the benefits and
experiences produced by these products. These sellers suffer from marketing myopia, they are
product orientated and not customer orientated. Smart marketers look beyond the attributes of
the products and services they sell.
3. Customer value and satisfaction. Customers form expectations about the values and satisfaction
that various marketing offers will deliver and buy accordingly. Satisfied customers buy again and
tell others about their experiences. Dissatisfied customers switch to competitors. Marketers must
, be careful to set the right level of expectations. Value and satisfaction are the key building blocks
for developing and managing customer relationships.
4. Exchanges and relationships. Marketing occurs when people decide to satisfy their needs and
wants through exchange relationships. Exchange is the act of obtaining a desired object from
someone by offering something in
return. Companies want to build
strong relationships by consistently
delivering superior customer value.
5. Markets. A market is a set of actual
and potential buyers of a product or
service. These buyers share a
particular need or want that can be
satisfied through exchange
relationships. Marketing means
managing markets to bring about
profitable customer relationships.
Marketing is not only carried out by sellers, but also buyers carry out marketing. Marketers must
therefore deal with customer-managed relationships. Where the question is: “How can our
customers influence us?”. In the model ‘A Modern Marketing System’ is showed what the main
elements in a marketing system are. The companies and competitors research the market and
interact with consumers to understand their needs. Then they create and exchange marketing
content with consumers through marketing intermediaries. A company’s success at engaging
customers and building profitable relationships depends on its own actions and on how well the
entire system serves the needs of final consumers.
2) Designing a customer value driven marketing strategy and plan. Marketing management can design a
customer driven marketing strategy. Marketing management is the art and science of choosing target
markets and building profitable relationships with them. The aim is to engage, keep, and grow target
customers by creating, delivering, and communicating superior customer value. The two main
questions here are:
1. What customers will we serve? This decision will be made by dividing the market into segments
and selecting which segment your company will go after. The company wants to select only
customers that can be profitable and that it can serve well. Marketing managers must decide which
customers they want to target and the level, timing, and nature of their demand. This is the part of
segmentation and targeting.
2. How can we serve these customers? The company must decide how it will differentiate and
position itself in the marketplace. A brand’s value proposition is the set of benefits or values it
promises to deliver to consumers to satisfy their needs. They answer the question “Why should I
buy your brand rather than a competitor?”. This is the part of differentiation.
3. Marketing management wants to design strategies that will engage target customers and build
profitable relationships with them. This is the part of positioning. There are five alternative
concepts which organizations design and carry out their marketing strategies:
- The production concept is the idea that consumers will favor products that are available and
highly affordable therefore the organization should focus on improving production and
distribution efficiency. This is a useful concept, but it can also lead to marketing myopia since
the producers is only focusing on the product and not on the consumers.
- The product concept is the idea that consumers will favor products that offer the most quality,
performance, and features. Therefore, the organization should devote its energy to making
continuous product improvements. Focusing only on the products can again lead to marketing
myopia.
- The selling concept is the idea that consumers will not buy enough of the firm’s products
unless the firm undertakes large-scale selling and promotion efforts. It is an inside-out view. It
focuses on creating sales transactions rather than building long-term profitable customer
, relationships. The aim is to sell what the company makes rather than to make what the market
wants
- The marketing concept is a philosophy in which achieving organization goals depends on
knowing the needs and wants of target markets and delivering the desired satisfaction better
than competitors do. It is an outside-in view. Customer focus and value are the paths to sales
and profits. The job is to find the right products for your customers.
- The societal marketing concept is the idea that a company’s marketing decisions should
consider consumer’s’ wants, the company’s requirements, consumers’ long-run interests, and
society’s long-run interest. It calls for sustainable marketing, socially and environmentally
responsible marketing that meets the present needs of consumers and businesses while also
preserving or enhancing the ability of future generations to meet their needs. Companies
should balance between company profits, consumer wants, and society’s interests.
3) Construct an integrated market program that delivers superior value. The integrated marketing
program is a comprehensive plan that communicates and delivers intended value. In this step the
chosen marketing strategy is transformed into action. It consists of the firm’s marketing mix:
1. Product. A need-satisfying market offering. The goal is to build strong brands.
2. Price. How much will the company charge for the offering. Create real value.
3. Place. How will it make the offering available to target consumers. So, how are demand and supply
chains managed.
4. Promotion. It must engage target consumers, communicate about the offering, and persuade
consumers of the offering merit. So, communicate the value proposition.
4) Engage customers and managing profitable customer relationships.
Customer relationship management is the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
Satisfied customers are more likely to be loyal and give the company a larger share of their business. A
customer buys from the firm that offers the highest customer-perceived-value. This is the consumers’
evaluation of the difference between all the benefits and all the costs of a market offering relative to
those of competing offers. Customers satisfaction is the extent to which perceived performance
matches a buyer’s expectation. Companies aim to delight customers by promising on what they can
deliver and then deliver more than they promised. Customer satisfaction results from the balance
between customer expectations and subjectively perceived performance. Together with customer-
perceived value customer satisfaction are relationship building blocks.
Marketers can use specific tools to develop stronger bonds with customers.
The new marketing is customer-engagement marketing. Which is making the brand a meaningful part
of consumers’ conversations and lives by fostering direct and continuous customer involvement in
shaping brand conversations, experiences, and community.
Marketers want to create customer brand advocacy by which satisfied customers initiate favorable
interactions with others about a brand.
One form of customer-engagement marketing is consumer-generated marketing. Here, the brand
exchanges created by consumers themselves by which consumers are playing an increasing role in
shaping their own brand experiences and those of other consumers. It creates credibility and trust.
Harnessing consumer-generated content, however, can be a time-consuming and costly process, and
companies may find it difficult to mine even a little gold from all the content submitted. Consumer
