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Chapter 1:

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

The Marketing Process: Creating and Capturing Customer Value:

1. Understanding the Marketplace and Customer Needs:

1) Needs are states of felt deprivation.
Wants are the form human needs take as they are shaped by culture and
individual personality.
Demands are human wants that are backed by buying power.
2) Market offerings are some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.
Marketing myopia—paying more attention to the specific products than to the
benefits and experiences produced
3) Customers form expectations about the value and satisfaction of market
offerings.
– Satisfied customers buy again
– Dissatisfied customers switch to competitors
• Exchange is the act of obtaining a desired object from someone by offering
something in return.
• Marketing actions try to create, maintain, and grow desirable exchange
relationships.

4) A market is the set of actual and potential buyers.

Consumers market when they:
– search for products
– interact with companies to obtain information
– make purchases
5)
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2. Designing a Customer Value-Driven Marketing Strategy:

1) Selecting customers to serve :
Marketing management is the art and science of choosing target markets and
building profitable relationships with them.
• What customers will we serve (target market)?
• How can we best serve these customers (value proposition)?
2) Choosing a value proposition:
A brand’s value proposition is the set of benefits or values it promises to deliver
to customers to satisfy their needs.
3) Marketing management orientation:
1. Production concept: Consumers will favor products that are available and
highly affordable
2. Product concept: Consumers favor products that offer the most quality,
performance, and features.
3. Selling concept: Consumers will not buy enough of the firm’s products unless
the firm undertakes a large-scale selling and promotion effort.
4. Marketing concept: Know the needs and wants of the target markets and
deliver the desired satisfactions better than competitors.

5. societal marketing concept, The company’s marketing decisions should

consider consumers’ wants, the company’s requirements, consumers’ long-
run interests, and society’s long-run interests.

4) The marketing mix is comprised of a set of tools known a

the four Ps:
1. product
2. price
3. promotion
4. place
Integrated marketing program—a comprehensive plan that communicates
and delivers intended value
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3. Managing Customer Relationships and Capturing Customer Value

1) Customer relationship management—the overall process of building and
maintaining profitable customer relationships by delivering superior customer
value and satisfaction.
2) Relationship Building Blocks
Customer-perceived value : The difference between total customer perceived
benefits and customer cost
Customer satisfaction: The extent to which perceived performance matches a
buyer’s expectations
3) Customer satisfaction depends on the product’s perceived performance relative
to a buyer’s expectations. If the product’s performance falls short of
expectations, the customer is dissatisfied. If performance matches expectations,
the customer is satisfied. If performance exceeds expectations, the customer is
highly satisfied or delighted.
4) Customer-engagement marketing goes beyond just selling a brand to
consumers. Its goal is to make the brand a meaningful part of consumers’
conversations and lives.
5) Consumer-Generated Marketing
Brand exchanges created by consumers themselves.
Consumers are playing an increasing role in shaping brand experiences.
6) Partner relationship management involves working closely with partners in
other company departments and outside the company to jointly bring greater
value to customers.
7) Customer lifetime value is the value of the entire stream of purchases that the
customer would make over a lifetime of patronage.
8) Share of customer is the portion of the customer’s purchasing that a company
gets in its product categories.
9) Customer equity is the total combined customer lifetime values of all of the
company’s customers.
10) Building the right relationship with the right customer:

Strangers show low potential profitability and little projected loyalty.

Butterflies are potentially profitable but not loyal.
True friends are both profitable and loyal.
Barnacles are highly loyal but not very profitable.
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4. The Changing Marketing Landscape:

 Describe the major trends and forces that are changing the marketing landscape in
this age of relationships?
• Digital Age
• Changing Economic Environment
• Growth of Not-for-Profit Marketing
• Rapid Globalization
• Sustainable Marketing

• We live in the age of Internet of Things, where everything is connected to everything

else.
Digital and social media marketing involves using digital marketing tools such as
websites, social media, mobile ads and apps, online videos, email, and blogs that
engage consumers anywhere, at any time, via their digital devices.
• Social media provide exciting opportunities to extend customer engagement and get
people talking about a brand.
• Mobile marketing: Using mobile channels to stimulate immediate buying, make
shopping easier, and enrich the brand experience.
• Big Data and AI: Brands can use big data to gain deep customer insights, personalize
marketing offers, and improve customer engagements and service.
• Not-for-profit marketing is growing, as sound marketing can help organizations
attract membership, funds, and support.
• Rapid Globalization: Managers around the world are taking both local and global
views of the company’s:
• Industry
• Competitors
• Opportunities
• Sustainable Marketing: Corporate ethics and social responsibility have become
important for every business.
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Chapter 2:
Company-Wide Strategic Planning :

Strategic planning is the process of developing and maintaining a strategic fit between the
organization’s goals and capabilities, and its changing marketing opportunities.

Steps in Strategic Planning:

The mission statement is the organization’s purpose; what it wants to accomplish in the
larger environment.

• Setting Company Objectives and Goals:

• Business objectives
– Build profitable customer relationships
– Invest in research
– Improve profits
• Marketing objectives
– Increase market share
– Create local partnerships
– Increase promotion

• Designing The Business Portfolio:

The business portfolio is the collection of businesses and products that make up the
company.
Portfolio analysis is a major activity in strategic planning whereby management evaluates
the products and businesses that make up the company

• Strategic business units can be a

• Company division
• Product line within a division
• Single product or brand

• Analyzing The Current Business Portfolio:

• Identify strategic business units (S B U s)
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• Assess the attractiveness of its various S B U s

• Decide how much support each S B U deserves

The B C G Growth-Share Matrix:

The best-known portfolio-planning method is the now-classic Boston Consulting Group

(BCG) approach. The growth-share matrix defines four types of SBUs.
• Stars are high-growth, high-share businesses or products requiring heavy investment
to finance rapid growth. They will eventually turn into cash cows.
• Cash cows are low-growth, high-share businesses or products that are established
and successful SBUs requiring less investment to maintain market share.
• Question marks are low-share business units in high-growth markets requiring a lot
of cash to hold their share.
• Dogs are low-growth, low-share businesses and products that may generate enough
cash to maintain themselves but do not promise to be large sources of cash.

Problems with Matrix Approaches:

• Difficulty in defining S B U s and measuring market share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning

The Product/Market Expansion Grid:

Developing Strategies for Growth and Downsizing:

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Companies must develop not only strategies for growing their business portfolios but also
strategies for downsizing them. When a firm finds brands or businesses that are
unprofitable or that no longer fit with the strategy, it must prune, harvest, or divest them.
Downsizing is when a company must prune, harvest, or divest businesses that are
unprofitable or that no longer fit the strategy.

• Planning Marketing: Partnering to Build Customer Relationships:

Explain marketing’s role in strategic planning and how marketing works with its
partners to create and deliver customer value.

1. Partnering with Other Company Departments

Value chain is a series of departments that carry out value creating activities
to design, produce, market, deliver, and support a firm’s products.
2. Partnering with Other Company Departments:
Marketing alone can’t create superior customer value. Under the company-
wide strategic plan, marketers must work closely with other departments to
form an effective internal company value chain.
3. Partnering with Others in the Marketing System:
Value delivery network is made up of the company, suppliers, distributors,
and ultimately customers who partner with each other to improve
performance of the entire system.

• Marketing Strategy and the Marketing Mix

Customer Value-Driven Marketing Strategy:

1. Marketing strategy is the marketing logic by which the company hopes to create
customer value and achieve profitable customer relationships.
2. Market segmentation is the division of a market into distinct groups of buyers who
have different needs, characteristics, or behaviors and who might require separate
products or marketing mixes.
3. Market segment is a group of consumers who respond in a similar way to a given set
of marketing efforts.
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4. Market targeting is the process of evaluating each market segment’s attractiveness

and selecting one or more segments to enter.
5. Market positioning is the arranging for a product to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of target consumers.
6. Differentiation begins the positioning process.
7. Positioning is arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products from competing brands and give them the
greatest advantage in their target markets.

Developing an Integrated Marketing Mix :

Marketing mix is the set of controllable, tactical marketing tools—product, price, place, and
promotion—that the firm blends to produce the response it wants in the target market.

The Four Ps of the Marketing Mix:

• List the
marketing management functions, including the elements of a marketing plan, and
discuss the importance of measuring and managing marketing return on investment.
Managing the Marketing Effort:

The chart shows

Analysis leading
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to Planning, Implementation and Organization, and Control. Planning is shown leading to

Implementation and Organization, which in turn leads to Control. Control is also shown to
lead to Planning as well as Implementation and Organization.
The chart also shows the following:
1. Planning has two elements: Develop strategic plans, and Develop marketing plans
2. Implementation and Organization: Carry out the plans
3. Control has three elements: Measure results, Evaluate results, and Take corrective
action

SWOT analysis:

One variable of the matrix has the values - Internal and External. The values of the other
variable are Positive and Negative. The matrix contents for each of the combinations are as
follows:
• Internal - Positive: Strengths - Internal capabilities that may help a company reach its
objectives
• Internal - Negative: Weaknesses -Internal limitations that may interfere with a
company's ability to achieve its objectives
• External - Positive: Opportunities - External factors that the company may be able to
exploit to its advantage
• External - Negative: Threats - Current and emerging external factors that may
challenge the company’s performance

Market Planning—Parts of a Marketing Plan:

• Executive summary
• Marketing situation
• Threats and opportunities
• Objectives and issues
• Marketing strategy
• Action programs
• Budgets
• Controls

Marketing Implementation
• Turning marketing strategies and plans into marketing actions to accomplish
strategic marketing objectives
• Addresses who, where, when, and how
Measuring and Managing Return on Marketing Investment:
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Return on Marketing Investment (Marketing R O I)

• Net return from a marketing investment divided by the costs of the marketing
investment
• Measurement of the profits generated by investments in marketing activities

The chart starts with Marketing Investment leading to Marketing returns and thereon to
Marketing return on investment. Another flow on the same chart also shows that the cost of
marketing investment is measured by marketing return on investment.
Marketing returns is further explained as "Improved customer value and engagement"
leading to "Increased customer attraction" and "Increased customer retention." These two
lead to "Increased customer lifetime values and customer equity."
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Chapter 3:
The marketing environment includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with target
customers.

Describe the environmental forces that affect the company’s ability to serve its customers.
• Microenvironment consists of the actors close to the company that affect its ability
to serve its customers—the company, suppliers, marketing intermediaries, customer
markets, competitors, and publics
• Macroenvironment consists of the larger societal forces that affect the
microenvironment—demographic, economic, natural, technological, political, and
cultural forces.

Actors in the Microenvironment:

1. The Company
In designing marketing plans, marketing management takes other company groups
into account.
• Top management
• Finance
• Research and development (R&D)
• Information technology
• Purchasing
• Operations
• Human resources
• Accounting

2.