MARKETING
A simple definition of marketing is managing profitable customer relationships. Marketing must both
attract new customers and grow the current customers. Every organization must perform marketing
functions, not just for-profit companies. Nonprofits (colleges, hospitals, churches, etc.) also must
perform marketing. Most people think of marketing as selling and advertising—“telling and selling.”
Marketing must focus on satisfying customer needs.
Marketing is a process by which companies create value for customers and build strong customer
relationships to capture value from customers in return.
The Marketing Process
FIVE CORE CUSTOMER AND MARKETPLACE CONCEPTS ARE CRITICAL:
(1) NEEDS, WANTS, AND DEMANDS;
(2) MARKETING OFFERS (PRODUCTS, SERVICES, AND EXPERIENCES);
(3) VALUE AND SATISFACTION;
(4) EXCHANGES AND RELATIONSHIPS;
(5) MARKETS.
Customer Needs, Wants, and Demands
The most basic concept underlying marketing is that of human needs.
Human needs are states of felt deprivation. They include physical, social, and individual needs. These
needs were not created by marketers; they are a basic part of the human makeup.
WANTS ARE THE FORM HUMAN NEEDS TAKE AS THEY ARE SHAPED BY CULTURE AND INDIVIDUAL
PERSONALITY. AN AMERICAN NEEDS FOOD BUT WANTS A BIG MAC.
WHEN BACKED BY BUYING POWER, WANTS BECOME DEMANDS.
THE BEST MARKETING COMPANIES GO TO GREAT LENGTHS TO LEARN AND UNDERSTAND THEIR
CUSTOMERS’ NEEDS, WANTS, AND DEMANDS
UNDERSTANDING THE MARKETPLACE
AND CUSTOMER NEEDS
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.
Needs and wants are fulfilled through market offerings—some combination of products, services,
information, or experiences offered to a market to satisfy a need or want. Market offerings include
products and services—activities or benefits offered for sale that are essentially intangible and do not
result in the ownership of anything. Marketing myopia occurs when a company becomes so taken with
their own products that they lose sight of underlying customer needs.
Customer Value and Satisfaction
Customers form expectations about the value and satisfaction that various market offerings will deliver
and buy accordingly.
Satisfied customers buy again and tell others about their good experiences.
Dissatisfied customers switch to competitors and disparage the product to others.
Customer value and customer satisfaction are key building blocks for developing and managing
customer relationships.
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.
Marketing management wants to design strategies that will build profitable relationships with target
consumers. But what philosophy should guide these marketing strategies?
There are five alternative concepts under which organizations design and carry out their marketing
strategies:
Designing a Customer-Driven Marketing Strategy
Production concept is the idea that consumers will favor products that are available or highly affordable.
Management should focus on improving production and distribution efficiency.
Marketing Management Orientations
Product concept is the idea that consumers will favor products that offer the most quality, performance,
and features. Organization should therefore devote its energy to making continuous product
improvements.
Marketing Management Orientations
Societal marketing concept is the idea that a company should make good marketing decisions by
considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and
society’s long-run interests. The societal marketing concept questions whether the pure marketing
concept overlooks possible conflicts between consumer short-run wants and consumer long-run
welfare.
Building Customer Relationships
The first three steps in the marketing process understanding the marketplace and customer needs,
designing a customer-driven marketing strategy, and constructing a marketing program—all lead up to
the fourth and most important step: building profitable customer relationships.
Most marketers, however, give the concept of customer relationship management a broader meaning.
In this broader sense, customer relationship management is the overall process of building and
maintaining profitable customer relationships by delivering superior customer value and satisfaction. It
deals with all aspects of acquiring, keeping, and growing customers.
Customer Satisfaction.
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.
Partner Relationship Management
When it comes to creating customer value and building strong customer relationships, today’s
marketers know that they can’t go it alone. They must work closely with a variety of marketing partners.
In addition to being good at customer relationship management,marketers must also be good at partner
relationship management. Major changes are occurring in how marketers partner with others inside and
outside the company to jointly bring more value to customers.
Capturing Value from Customers
Good customer relationship management creates customer delight. In turn, delighted customers remain
loyal and talk favorably to others about the company and its products. Studies show big differences in
the loyalty of customers who are less satisfied, somewhat satisfied, and completely satisfied. Even a
slight drop from complete satisfaction can create an enormous drop in loyalty. Thus, the aim of
customer relationship management is to create not only customer satisfaction but also customer
delight.
Topic 2
