Chapter 1
Marketing: The process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return.
Create value for customers Capture
value from
customers
Construct an Engage customers,
Understand the Design a integrated Capture value from
build profitable
marketplace and → customer value- → marketing program →
relationships, and → customers to create
customer needs driven marketing that delivers profits and
create customer
and wants stratgey superior value customer equity
dlight
Needs: States of felt deprivation
Wants: The form human needs take as they are shaped by culture and individual personality
Demands: Human wants that are backed by buying power
Market offerings: Some combination of products, services, information, or experiences offered to
a market to satisfy a need or want
Marketing myopia: The mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products
Marketing management: The art and science of choosing target markets and building profitable
relationships with themselves
Production concept: The idea that consumers will favour products that are available and highly
affordable; therefore, the organisation should focus on improving production and distribution
efficiency.
Product concept: The idea that consumer will favour products that offer the most quality,
performance, and features; therefore, the organisation should devote its energy to making
continuous product improvements.
Selling concept: The idea that consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort.
Marketing concept: A philosophy in which achieving organisational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than competitors
do.
Societal marketing concept: The idea that a company’s marketing decisions should consider
consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-
run interests.
Customer relationship management: The overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
Customer-perceived value: The customer’s evaluation of the difference between all the benefits
and all the costs of a marketing offer relative to those of competing offers.
Customer satisfaction: The extent to which a product’s perceived performance matches a buyer’s
expectations.
1
,Customer-engagement marketing: Making the brand a meaningful part of consumer’s
conversations and lives by fostering direct and continuous customer involvement in shaping brand
conversations, experiences, and community.
Consumer-generated marketing: Brand exchanges created by consumers themselves – both
invited and uninvited – by which consumers are playing an increasing role in shaping their own
brand experiences and those of other consumers.
Partner relationship management: Working closely with partners in other company departments
and outside the company to jointly bring greater value to customers.
Customer lifetime value: The value if the entire stream of purchases a customer makes over a
lifetime of patronage.
Share of customer: The portion of the customer’s purchasing that a company gets in it product
categories.
It’s important to not only acquire customers but also to keep and grow them.
Customer equity: The total combined customer lifetime values of all of the company’s customers.
Different types of customers (Stranger, butterflies, true friends, barnacles) require different
engagement and relationship management strategies. The goal is the build the right relationships
with the right customers.
Digital and social media marketing: Using digital marketing tools to engage consumers
anywhere, at any time, via their digital devices.
Rather than slashing prices in uncertain economic times, many marketers hold the line on prices and
instead explain again why their brands are worth it.
Today’s customers expect companies to deliver value in a socially and environmentally responsible
way.
Figure 1.6 (page 54)
2
, Chapter 2
Strategic planning: The process of developing and maintaining a strategic fit between the
organisation’s goals and capabilities and its changing marketing opportunities.
Marketing planning occurs at the business-unit, product, and market levels. Is supports company
strategic planning with more detailed plans for specific marketing opportunities.
Mission statement: A statement of the organisation’s purpose – what it wants to accomplish in the
larger environment. They should be market-oriented and defined in terms of satisfying basic
customer needs. Each marketing strategy must then be defined in greater detail.
The best business portfolio (the collection of businesses and products that make up the company)
is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.
First, the company must analyse its current business portfolio and determine which businesses
should receive more, less, or no investment. Second, it must shape the future portfolio by
developing strategies for growth and downsizing.
Portfolio analysis: The process by which management evaluates the products and businesses that
make up the company. First step is to identify SBU’s (strategic business units), the key businesses
that make up the company.
Growth-share matrix (Boston Consulting Group): A portfolio-planning method that evaluates a
company’s SBUs in terms of market growth rate (mgr) and relative market share (rms). Both high:
Star; Both low: Dog; mgr high, rms low: Question mark; mgr low, rms high: Cash cow.
For each SBU, a company can pursue one of four strategies:
1. Invest more and build its share
2. Invest just enough to hold its share
3. Milk short-term cash flow and harvest the SBU
4. Selling or phase an SBU out and divest it.
But these kind of methods can be difficult, time consuming, and costly to implement. In addition,
these approaches focus on classifying current businesses but provide little advice for future
planning.
Product/market expansion grid: A portfolio-planning tool for identifying company growth
opportunities through market penetration, market development, product development, or
diversification.
• Market penetration: Company growth by increasing sales of current products to current
market segments without changing the product.
• Market development: Company growth by identifying and developing new market
segments for current company products. Demographic ↔ Geographic.
• Product development: Company growth by offering modified or new products to current
market segments.
• Diversification: Company growth through starting up or acquiring businesses outside the
company’s current products and markets.
Managers should focus on promising growth opportunities, not fritter away energy trying to salvage
fading ones.
Value chain: The series of internal departments that carry out value-creating activities to design,
produce, market, deliver, and support a firm’s products.
3
Marketing: The process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return.
Create value for customers Capture
value from
customers
Construct an Engage customers,
Understand the Design a integrated Capture value from
build profitable
marketplace and → customer value- → marketing program →
relationships, and → customers to create
customer needs driven marketing that delivers profits and
create customer
and wants stratgey superior value customer equity
dlight
Needs: States of felt deprivation
Wants: The form human needs take as they are shaped by culture and individual personality
Demands: Human wants that are backed by buying power
Market offerings: Some combination of products, services, information, or experiences offered to
a market to satisfy a need or want
Marketing myopia: The mistake of paying more attention to the specific products a company
offers than to the benefits and experiences produced by these products
Marketing management: The art and science of choosing target markets and building profitable
relationships with themselves
Production concept: The idea that consumers will favour products that are available and highly
affordable; therefore, the organisation should focus on improving production and distribution
efficiency.
Product concept: The idea that consumer will favour products that offer the most quality,
performance, and features; therefore, the organisation should devote its energy to making
continuous product improvements.
Selling concept: The idea that consumers will not buy enough of the firm’s products unless the firm
undertakes a large-scale selling and promotion effort.
Marketing concept: A philosophy in which achieving organisational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than competitors
do.
Societal marketing concept: The idea that a company’s marketing decisions should consider
consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-
run interests.
Customer relationship management: The overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
Customer-perceived value: The customer’s evaluation of the difference between all the benefits
and all the costs of a marketing offer relative to those of competing offers.
Customer satisfaction: The extent to which a product’s perceived performance matches a buyer’s
expectations.
1
,Customer-engagement marketing: Making the brand a meaningful part of consumer’s
conversations and lives by fostering direct and continuous customer involvement in shaping brand
conversations, experiences, and community.
Consumer-generated marketing: Brand exchanges created by consumers themselves – both
invited and uninvited – by which consumers are playing an increasing role in shaping their own
brand experiences and those of other consumers.
Partner relationship management: Working closely with partners in other company departments
and outside the company to jointly bring greater value to customers.
Customer lifetime value: The value if the entire stream of purchases a customer makes over a
lifetime of patronage.
Share of customer: The portion of the customer’s purchasing that a company gets in it product
categories.
It’s important to not only acquire customers but also to keep and grow them.
Customer equity: The total combined customer lifetime values of all of the company’s customers.
Different types of customers (Stranger, butterflies, true friends, barnacles) require different
engagement and relationship management strategies. The goal is the build the right relationships
with the right customers.
Digital and social media marketing: Using digital marketing tools to engage consumers
anywhere, at any time, via their digital devices.
Rather than slashing prices in uncertain economic times, many marketers hold the line on prices and
instead explain again why their brands are worth it.
Today’s customers expect companies to deliver value in a socially and environmentally responsible
way.
Figure 1.6 (page 54)
2
, Chapter 2
Strategic planning: The process of developing and maintaining a strategic fit between the
organisation’s goals and capabilities and its changing marketing opportunities.
Marketing planning occurs at the business-unit, product, and market levels. Is supports company
strategic planning with more detailed plans for specific marketing opportunities.
Mission statement: A statement of the organisation’s purpose – what it wants to accomplish in the
larger environment. They should be market-oriented and defined in terms of satisfying basic
customer needs. Each marketing strategy must then be defined in greater detail.
The best business portfolio (the collection of businesses and products that make up the company)
is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.
First, the company must analyse its current business portfolio and determine which businesses
should receive more, less, or no investment. Second, it must shape the future portfolio by
developing strategies for growth and downsizing.
Portfolio analysis: The process by which management evaluates the products and businesses that
make up the company. First step is to identify SBU’s (strategic business units), the key businesses
that make up the company.
Growth-share matrix (Boston Consulting Group): A portfolio-planning method that evaluates a
company’s SBUs in terms of market growth rate (mgr) and relative market share (rms). Both high:
Star; Both low: Dog; mgr high, rms low: Question mark; mgr low, rms high: Cash cow.
For each SBU, a company can pursue one of four strategies:
1. Invest more and build its share
2. Invest just enough to hold its share
3. Milk short-term cash flow and harvest the SBU
4. Selling or phase an SBU out and divest it.
But these kind of methods can be difficult, time consuming, and costly to implement. In addition,
these approaches focus on classifying current businesses but provide little advice for future
planning.
Product/market expansion grid: A portfolio-planning tool for identifying company growth
opportunities through market penetration, market development, product development, or
diversification.
• Market penetration: Company growth by increasing sales of current products to current
market segments without changing the product.
• Market development: Company growth by identifying and developing new market
segments for current company products. Demographic ↔ Geographic.
• Product development: Company growth by offering modified or new products to current
market segments.
• Diversification: Company growth through starting up or acquiring businesses outside the
company’s current products and markets.
Managers should focus on promising growth opportunities, not fritter away energy trying to salvage
fading ones.
Value chain: The series of internal departments that carry out value-creating activities to design,
produce, market, deliver, and support a firm’s products.
3
