ADMS 2200 Midterm Notes Ch 1&3

Chapter 1: Creating Customer Value and Engagement o Marketing is engaging customers and managing profitable customer relationships. o Goals of Marketing: o to attract new customers by promising superior value o to keep and grow current customers by delivering value and satisfaction. o Old sense of marketing: making a sale - "telling and selling " o New Sense of marketing: satisfying customer needs o Peter Drucker: "The aim of marketing is to make selling unnecessary" o Broad Definition: Marketing is a social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others o Narrow Definition: marketing involves building profitable, value-laden exchange relationships with customers o 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 The Marketing Process o Understand the marketplace and customer needs and wants o Design a customer value-driven marketing strategy o Construct an integrated marketing program that delivers superior value o Engage customers, build profitable relationships, and create customer delight o Capture value from customers to create profits and customer equity The first 4-steps of marketing process companies work to understand consumers, create customer value, and build strong customer relationships Step 5 companies reap the rewards for creating superior customer value. By creating value for customers, marketers capture value from customers in return. 5 Core Customer and Marketplace Concepts : 1. Needs, Wants, & Demands o Needs: are states of felt deprivation i. Include basic physical needs for food, clothing, warmth and safety ii. Marketers did not create these needs o Wants: the form human needs take as they are shaped by culture and individual personality i. Wants are shaped by one's society and are described in terms of objects that will satisfy those needs. ii. Example: a person is hungry and needs food but wants a Big Mac to satisfy the need for food o Demands: Human wants that are backed by buying power i. Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction 2. Market Offerings (Products, services, and experiences)
o Some combination of products, services, information, or experiences offered to a market to satisfy a need or want o Not limited to physical products o Include services activities or benefits offered for sale that are essentially intangible and do not result in ownership of anything i. Examples: banking, airline, hotel, retailing, and home-repair services o Also include entities, such as person, places organizations, information, ideas and causes 3. Customer Value and Satisfaction o Customer value and customer satisfaction are key building blocks for developing and managing customer relationships 4. Exchanges and Relationships o The act of obtaining a desired object from someone by offering something in return o Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships with target audiences involving a product, services, idea, or other object 5. Market o The set of actual and potential buyers of a product or service o These buyers share a particular need or want that can be satisfied through exchange relationships o Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activites o Questions asked by markerters: i. How can we influence our customers? ii. How can our customers influence us? iii. How can our customers influence each other? Marketing Myopia: the mistake of paying attention to the specific products a company offers than to the benefits and experiences produced by these products Modern Marketing System
Marketing Management o Marketing Management: the art and science of choosing target markets and building profitable relationships with them o Marketing manager's aim: to engage, keep, and grow target customers by creating, delivering , and communicating superior customer value o Must answer 2 important questions: What customers will we serve what's our target market? How can we serve these customers best what's our value proposition? o The company must first decide whom it will serve: o This is done by dividing the market into segments of customers market segmentation o Selecting which segments to go after target marketing o Marketing management is customer management and demand management o Value Proposition a brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs o Companies must design strong value propositions that give them the greatest advantage in their target markets Marketing Management Orientation 1. Production Concept: the idea that consumers will favour products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency a. this concept is one of the oldest orientations that guides sellers b. still useful in some situations c. this concept can lead to marketing myopia i. companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective satisfying customer needs and building customer relationships 2. Product Concept: the idea that consumers will favour products that off the most quality, performance, and features: therefore, the organization should devote its energy to making continuous product improvements a. Focusing only on the company's products can also lead to marketing myopia 3. 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 a. practiced with unsought goods those that buyers do not normally think if buying i. example: life insurance b. these industries must be good at tracking down prospects and selling them on a product's benefits c. aggressive selling high risks i. focuses on creating sales transactions rather than on building long-term, profitable customer relationships d. aim is to sell what the company makes as oppose to make what the market wants
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