Lecture 1: Introduction to Marketing
• Marketing: the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offering that have value for customers, clients, partners, and
society at large
• Value
o Epistemic: novelty, curiosity, fun
o Conditional: required for particular context or a sociocultural setting – ex.
Traditions/holidays
o Hedonic: creates customer emotions (+/-) experiences, sensory, epistemic
o Symbolic: associated w/ psychological meanings
o Functional: has desired characteristics, is useful, reliable & of appropriate quality
for purpose
• Exchanges of Value
o An exchange: a transfer of value b/w buyer and seller
▪ Marketer tries to bring out a response to some market offering – the
response may be more than buying
• Relationship Building Blocks: Customer Value and Satisfaction:
o Customer-perceived value: the customer’s evaluation of the difference b/w all
the benefits and all the costs of a market offering relative to those of competing
offers
o Creating superior value
▪ Look beyond product attributes and existing customer wants to product
benefits and experiences, and customer needs and offer superior
customer value
o Customer satisfaction depends on product’s perceived performance relative to
buyer’s expectations
▪ Depends on the product’s perceived performance relative to buyer’s
expectations
▪ When performance matches expectation, the customer is satisfied; when
performance exceeds expectations, customer is delighted
▪ Satisfied customer will make repeat purchases and tell others
o Customer value and satisfaction
▪ Customers form expectations about the value of various marketing offers
and buy accordingly
▪ How do buyers form their expectations?
• Past buying experience
• The opinions of friends
• Market and competitor info and promises
o Customer satisfaction depends on how well the product’s
performance lives up to customer’s expectations
• Marketers must be careful to set right level of expectation
• Marketing (2): the management process responsible for identifying, anticipating and
satisfying customer requirements profitably
,• Marketing (3): ‘to bring to market’ and to produce (an offer) to be sold in the market
• Market: the aggregate of all prospects and customers w/ an unmet need and ability to
buy
• Marketing is a process for creating and capturing value
•
• Bringing an entity to market
o Markets can be identified by type of buyer, type of seller, product category,
industry, and geographic region
o Marketers should work to:
▪ Understand the needs and wants of specific markets
▪ Select the market they can serve best
▪ Developing products and services to satisfy customers in this market
• Who are our competitors & how are they meeting customer needs?
o Identifying competitors
o Ranking competitors
o How are they meeting customer needs?
o Comparing competitive factors
• Understanding your customer
o Maslow’s Hierarchy of Needs
▪ Biological and physiological
▪ Safety (first two are basic needs)
▪ Love/belonging
▪ Esteem (these next two are psychological needs)
▪ Self-actualization (self-fulfillment needs)
o Needs – felt states of deprivation
o Wants – the form human needs take as shaped by culture and individual
personality
o Demands – wants backed by buying power
▪ To understand customer needs, wants, and demands – marketers
conduct consumer research and analyze customer data
• Selecting customers to serve
o Marketers deciding who they will serve by dividing the market into segments of
customers, and select which segment they will go after (target marketing)
o Market segmentation: dividing a market into different groups w/ similar needs,
characteristics, or behaviors
, o Target marketing: the process of evaluating each market segments’
attractiveness and selecting one or more segment to enter
• Choosing a value proposition
o The firm must decide how it will differentiate and position itself
o Differentiation: the that you make your offering or brand more desirable than all
the other sin the competitive frame of reference
▪ Mercedes: ‘unlike any other’ – BMW: ‘the ultimate driving machine’
• Creating targeted value
•
• Preparing the marketing program
o The marketing plan delivers the value to the target customer by transforming the
marketing strategy into actions
o Marketing plan consists of firm’s marketing mix (also called 4P’s)
▪ Product: a market offering that satisfies a need
▪ Price: the amount the firm will charge for the offering
▪ Place: how and where will the firm make the offering available to the
customer
▪ Promotion: communicating the value of the offering and persuading
them of its merits
• Customer relationship management (CRM): “the overall process of building and
maintaining profitable customer relationships by delivering superior customer value and
satisfaction – it deals w/ all aspects of acquiring, keeping and growing customers”
• Capturing value from the customer
o Creating customer loyalty and retention
o Loyalty increases as satisfaction levels increase
o Customer delight leads to emotional relationships and loyalty
o Loyal customers – less price sensitives
o Customer lifetime value: is the total worth to a business of a customer over the
whole period of their relationship – customer lifetime value shows true worth of
customer
o Growing share of customer: the portion of the customer’s purchasing that a
company gets in its product categories
, o Building customer equity: the total combined customer lifetime values of all of
the company’s current and potential customers
• To sum it up:
•
• Why marketing is necessary:
o Systematic thinking about future
o Better co-ordination of a company’s efforts
o Alignment of goals and objectives
o Allows you to better prepare for future or sudden developments
• Importance of marketing in organizations
o R&D (Product (attribute) differentiation consumer research, STP) → Distribution
& Logistics (Product accessibility & exposure) → Human resources (internal
marketing & corporate marketing) → finance/accounting (budgets/valuation) →
marketing (storytelling & marketing management) → strategy (process)
• The marketing mix – consists of tactical marketing tools blended into an integrated
marketing programmed that delivers the intended value to target customers: 7P’s
o Product
• Marketing: the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offering that have value for customers, clients, partners, and
society at large
• Value
o Epistemic: novelty, curiosity, fun
o Conditional: required for particular context or a sociocultural setting – ex.
Traditions/holidays
o Hedonic: creates customer emotions (+/-) experiences, sensory, epistemic
o Symbolic: associated w/ psychological meanings
o Functional: has desired characteristics, is useful, reliable & of appropriate quality
for purpose
• Exchanges of Value
o An exchange: a transfer of value b/w buyer and seller
▪ Marketer tries to bring out a response to some market offering – the
response may be more than buying
• Relationship Building Blocks: Customer Value and Satisfaction:
o Customer-perceived value: the customer’s evaluation of the difference b/w all
the benefits and all the costs of a market offering relative to those of competing
offers
o Creating superior value
▪ Look beyond product attributes and existing customer wants to product
benefits and experiences, and customer needs and offer superior
customer value
o Customer satisfaction depends on product’s perceived performance relative to
buyer’s expectations
▪ Depends on the product’s perceived performance relative to buyer’s
expectations
▪ When performance matches expectation, the customer is satisfied; when
performance exceeds expectations, customer is delighted
▪ Satisfied customer will make repeat purchases and tell others
o Customer value and satisfaction
▪ Customers form expectations about the value of various marketing offers
and buy accordingly
▪ How do buyers form their expectations?
• Past buying experience
• The opinions of friends
• Market and competitor info and promises
o Customer satisfaction depends on how well the product’s
performance lives up to customer’s expectations
• Marketers must be careful to set right level of expectation
• Marketing (2): the management process responsible for identifying, anticipating and
satisfying customer requirements profitably
,• Marketing (3): ‘to bring to market’ and to produce (an offer) to be sold in the market
• Market: the aggregate of all prospects and customers w/ an unmet need and ability to
buy
• Marketing is a process for creating and capturing value
•
• Bringing an entity to market
o Markets can be identified by type of buyer, type of seller, product category,
industry, and geographic region
o Marketers should work to:
▪ Understand the needs and wants of specific markets
▪ Select the market they can serve best
▪ Developing products and services to satisfy customers in this market
• Who are our competitors & how are they meeting customer needs?
o Identifying competitors
o Ranking competitors
o How are they meeting customer needs?
o Comparing competitive factors
• Understanding your customer
o Maslow’s Hierarchy of Needs
▪ Biological and physiological
▪ Safety (first two are basic needs)
▪ Love/belonging
▪ Esteem (these next two are psychological needs)
▪ Self-actualization (self-fulfillment needs)
o Needs – felt states of deprivation
o Wants – the form human needs take as shaped by culture and individual
personality
o Demands – wants backed by buying power
▪ To understand customer needs, wants, and demands – marketers
conduct consumer research and analyze customer data
• Selecting customers to serve
o Marketers deciding who they will serve by dividing the market into segments of
customers, and select which segment they will go after (target marketing)
o Market segmentation: dividing a market into different groups w/ similar needs,
characteristics, or behaviors
, o Target marketing: the process of evaluating each market segments’
attractiveness and selecting one or more segment to enter
• Choosing a value proposition
o The firm must decide how it will differentiate and position itself
o Differentiation: the that you make your offering or brand more desirable than all
the other sin the competitive frame of reference
▪ Mercedes: ‘unlike any other’ – BMW: ‘the ultimate driving machine’
• Creating targeted value
•
• Preparing the marketing program
o The marketing plan delivers the value to the target customer by transforming the
marketing strategy into actions
o Marketing plan consists of firm’s marketing mix (also called 4P’s)
▪ Product: a market offering that satisfies a need
▪ Price: the amount the firm will charge for the offering
▪ Place: how and where will the firm make the offering available to the
customer
▪ Promotion: communicating the value of the offering and persuading
them of its merits
• Customer relationship management (CRM): “the overall process of building and
maintaining profitable customer relationships by delivering superior customer value and
satisfaction – it deals w/ all aspects of acquiring, keeping and growing customers”
• Capturing value from the customer
o Creating customer loyalty and retention
o Loyalty increases as satisfaction levels increase
o Customer delight leads to emotional relationships and loyalty
o Loyal customers – less price sensitives
o Customer lifetime value: is the total worth to a business of a customer over the
whole period of their relationship – customer lifetime value shows true worth of
customer
o Growing share of customer: the portion of the customer’s purchasing that a
company gets in its product categories
, o Building customer equity: the total combined customer lifetime values of all of
the company’s current and potential customers
• To sum it up:
•
• Why marketing is necessary:
o Systematic thinking about future
o Better co-ordination of a company’s efforts
o Alignment of goals and objectives
o Allows you to better prepare for future or sudden developments
• Importance of marketing in organizations
o R&D (Product (attribute) differentiation consumer research, STP) → Distribution
& Logistics (Product accessibility & exposure) → Human resources (internal
marketing & corporate marketing) → finance/accounting (budgets/valuation) →
marketing (storytelling & marketing management) → strategy (process)
• The marketing mix – consists of tactical marketing tools blended into an integrated
marketing programmed that delivers the intended value to target customers: 7P’s
o Product
