Principles of Marketing Chapter 1

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Chapter 1


• Define marketing and outline the steps in the marketing process • Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts • Identify the key elements of a customer-driven market strategy and discuss the marketing management orientations that guide marketing strategy. • Discuss customer relationship management and identify strategies for creating value for customers and captures value from customers in return. • Describe the major trends and forces that are changing the market landscape in this age of relationships.


1. What Is Marketing?

2. Understand the Marketplace and Customer Needs
5. Building Customer Relationships

3. Designing a Customer-driven Marketing Strategy
6. Capturing Value from Customers

4. Preparing an Integrated Marketing Plan and Program

7. The Changing Marketing Landscape

8. So, what is marketing? Pull it all together.

What is Marketing?


• Broadly defined: 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. • In a narrow business context, marketing involves building profitable, value-laden exchange relationships with customers.


• Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return.


Understand the marketplace and customer needs and wants Design a customer-driven marketing strategy Construct an integrated marketing program that delivers superior value Build profitable customer relationships and create customer delight Capture value from customers to create profits and customer equity 7


• • • • •

Customer needs, wants, and demands Market offerings Value and satisfaction Exchanges and relationships Markets



• States of deprivation • Physical—food, clothing, warmth, safety • Social—belonging and affection • Individual—knowledge and self-expression

Wants Demands

• Form that needs take as they are shaped by culture and individual personality

• Wants backed by buying power


• Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want • Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs


• Forms expectations about the Value and satisfaction of various market offerings

• Set the right level of expectations • Not too high or low


• Exchange is the act of obtaining a desired object from someone by offering something in return. • Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object. 13

Markets are the set of actual and potential buyers of a product


Designing a Customer-driven Marketing Strategy

• Marketing management is the art and science of choosing target markets and building profitable relationships with them – What customers will we serve? (what’s our target market?) – How can we best serve these customers? (what’s our value proposition)? 16

• Market segmentation refers to dividing the markets into segments of customers • Target marketing refers to which segments to go after

who are their target market?

• Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it.


• The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs


Production concept

Product concept

Selling concept

Marketing concept

Societal concept

What weight should be given to the interests of customers, the organization, and society? 20

• Production concept is the idea that...
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