Summary Marketing free essay sample

Marketing process: understand the marketplace and customer needs and wants ( design a customer-driven marketing strategy ( construct and integrated marketing program that delivers superior value ( build profitable relationships and create customer delight ( capture value from customers to create profits and customer equity. 5 core customer and marketplace concepts: 1. Needs, wants, demands 2. Marketing offerings (Products, services, and experiences) 3. Value and satisfaction (building blocks for developing and managing customer relationships) 4. Exchanges and relationships 5. Markets (the set of all actual and potential buyers of a product or service) So the marketing process involves 5 steps: the first four steps create value for customers. First, marketers need to understand the marketplace and customer needs and wants. Next, marketers design a customer-driven marketing strategy with the goal of getting, keeping and growing target customers. In the third step, marketers construct a marketing program that actually delivers superior value. All of these steps form the basis for the fourth step, building profitable customer relationships and creating customer delight. We will write a custom essay sample on Summary Marketing or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In the final step, the company reaps the rewards of strong customer relationships by capturing value from customers. Marketing myopia: only watching at the product instead of the underlying customer needs. Marketing management: the art and science of choosing target markets and building profitable relationships with them. (find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value). = customer management and demand management. It’s best to select customers (target marketing) instead of serving all customers. alternative concepts under which organisations design and carry out their marketing strategies: †¢ Production concept: consumers will favour products that are available and highly affordable †¢ Product concept: consumers will favour products that offer the most in quality, performance, and innovative features. †¢ Selling: buying asks for a lot of selling and promotion effort. ( inside-out perspective â⠂¬ ¢ Marketing: achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. The job is not to find the right customers for your product, but to find the right products for your customer. ( outside-in perspective. Our goal is to lead customers where they want to go before they know where they want to go. †¢ Societal marketing concepts: a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Selling concept: factory ( existing products ( selling and promoting ( profits through sales volume Marketing concept: market ( customer needs ( integrated marketing ( profits through customer satisfaction 4 P’s of marketing: Product, Price, Place, Promotion (these are marketing mix tools ( integrated marketing program) 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 market offering relative to those of competing offers. Customer satisfaction: the extent to which a product’s perceived performance matches a buyer’s expectations. A company should deliver high customer satisfaction relative to competitors, it does not attempt to maximize customer satisfaction. In the past companies focused on mass marketing to all customers, today companies are building more direct and lasting relationships with more carefully selected customers (selective relationship management). Direct marketing (by telephone, mail-order catalogs, kiosks and online) is booming. Partner relationship management: working closely with partners in other company departments and outside the company to jointly bring greater value to customers ( every employee must be customer focused. Outcomes of creating customer value: customer loyalty and retention, share of market and share of customer, and customer equity. The aim of customer relationship management is to create not just customer satisfaction, but customer delight (emotional relationship with product or service). Customer lifetime value: the value of the entire stream of purchases that a customer would make over a lifetime of patronage. Share of customer: the portion of the customer’s purchasing that a company gets in its product categories. Companies want not only to create profitable customers, but to ‘own’ them for life, capture their customer lifetime value, and earn a greater share of their purchases. Customer equity: the combined discounted customer lifetime values of all of the company’s current and potential customers. Whereas sales and market share reflect the past, customer equity suggests the future. The goal is to build the right relationship with the right customers. The major new developments in marketing can be summed up in a single word: relationships. Today, marketers of all kinds are taking advantage of new opportunities for building relationships with their customers, their marketing partners, and the world around them. 2 Company and Marketing strategy: Partnering to build customer relationships Strategic planning: the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities ( adapting the firm to take advantage of opportunities in its constantly changing environment. Mission statement: a statement of the organization’s purpose –what it wants to accomplish in the larger environment. They should be market oriented and defined in terms of customer needs. They should be realistic and specific. They should fit the market environment and be motivating. Business portfolio: the collection of businesses and products that make up the company The major activity in strategic planning is business portfolio analysis, whereby management evaluates the products and businesses making up the company. Product/market expansion grid: a portfolio-planning tool for identifying company growth opportunities through: †¢ market penetration: making more sales to current customers without changing its products †¢ market development: identifying and developing new market segments for current company products †¢ product development: offering modified or new products to current markets †¢ diversification: starting up or acquiring businesses outside the company’s current products and markets. Companies must not only develop strategies for growing their business ortfolios but also strategies for downsizing them. Managers should focus on promising growth opportunities, not fritter away energy trying to salvage fading ones. Customer value and satisfaction are important ingredients in the marketer’s formula for success. Marketers must partner effectively with other companies in the marketing system to form a competitively superior value-delivery network. Value chai n: the series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products. A company’s success depends on how well each department performs its work of adding customer value and on how well the activities of various departments are coordinated. In today’s marketplace competition no longer takes place between individual competitors. Rather, it takes place between the entire value-delivery networks created by these competitors. So even if Toyota makes the best cars, it might lose in the marketplace if Ford’s dealer network provides more customer-satisfying sales and service. Customer-driven marketing strategy: Companies cannot serve all consumers in a given market. So they divide up the total market, choose the best segments and design strategies for profitably serving chosen segments. This process involves: †¢ market segmentation: the process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, who might require separate products or market programs. A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. †¢ target marketing: a company should target segments in which it can profitably generate the greatest customer value and sustain it over time. Market positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. †¢ Differentiation: actually differentiating the market offering to create superior customer value. Marketing mix: 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. One concern: the four P’s concept takes the seller’s view of the market, not the buyer’s view. It might be better described as the four C’s. Ps4Cs ProductCustomer solution PriceCustomer cost PlaceConvenience PromotionCommunication Managing the marketing process requires the four marketing management functions: analysis, planning, implementation, and control. SWOT analyse: a complete analysis of the company’s situation. It evaluates the company’s overall Strengths (S), Weaknesses (W), Opportunities (O) and Threats (T). Contents of a marketing plan: executive summary, current marketing situation, threats and opportunities analysis, objectives and issues, marketing strategy, action programs, budgets, controls. To be successful companies must also be effective at implementation: turning marketing strategies into marketing actions. Marketing control involves evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Marketers want to know the actual return on investments: Return on marketing investment (or marketing ROI): the net return from a marketing investment divided by the costs of the marketing investment. Marketers are using customer-centered measures of marketing impact, such as customer acquisition, customer retention, and customer lifetime value. Increased customer equity in relation to the cost of the marketing investments, determines return on marketing investment. A company’s success depends on how well each department performs its customer value-adding activities and how well the departments work together to serve the customer ( partner relationship management ( so they form an effective value chain that serves the customer. 3 The marketing environment Marketing environment: the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. It is made up of a microenvironment and a macroenvironment. Microenvironment: 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: the larger societal forces that affect the microenvironment: demographic, economic, natural, technological, political, and cultural forces. The company’s microenvironment Marketing management’s job is to build relationships with customers by creating customer value and satisfaction. The company n designing marketing plans, marketing management takes other company groups into account-groups such as top management, finance, research and development (RD), purchasing, operations, and accounting. Suppliers they provide the resources needed by the company to produce its goods and services. Most marketers today treat their suppliers as partners in creating and delivering customer value. Marketing intermediaries help the company to promote, sell, and distribute its products to final buyers; they include resellers, physical distribution firms, marketing service agencies and financial intermediaries. Today’s marketers recognize the importance of working with their intermediaries as partners rather than simply as channels through which they sell their products. Customers The company needs to study five types of customer markets closely: 1. consumer markets 2. business markets 3. reseller markets 4. government markets 5. international markets Competitors The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. No single competitive marketing strategy is best for all companies. Publics A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives: †¢ Financial publics influence the company’s ability to obtain funds: banks and stockholders. †¢ Media publics carry news, features, and editorial opinions: newspapers, magazines †¢ Government publics, marketers must often consult the company’s lawyers on issues of products safety, truth in advertising, and other matters †¢ Citizen-action publics †¢ Local publics †¢ General publics †¢ Internal publics The company’s macroenvironment Major forces in the company’s macroenvironment: †¢ Demographic forces: demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. the post-world war 2 baby boom produced 78 million baby boomers, born between 1946-1964. The youngest boomers are now in their early forties. As a group, the baby boomers are the most affluent Americans. However although the more affluent boomers have grabbed most of the headlines, baby boomers cut across all walks of life, creating a diverse set f target segments for businesses. Generation X: the 45 million people born between 1965 and 1976 in the ‘birth dearth’ following the baby boom. Generation Y: The 72 million children of the baby boomers, born between 1977 and 1994. But marketers need to form more precise age-specific segments with each group. Marketers must increasingly consider the special needs of non-traditional households, because they are now g rowing more rapidly than traditional households. Each group has distinctive needs and buying habits. This is a period of great migratory movements between and within countries, this is interesting because people in different regions buy differently. The U. S. population is becoming better educated. The rising number of educated people will increase the demand for quality products, books, magazines, travel, personal computers, and internet services. Between 2004 and 2014, the number of professional workers is expected to increase 21% and manufacturing is expected to decline 5%. As the population in the United States grows more diverse, successful marketers will continue to diversify their marketing programs to take advantage of opportunities in fast-growing segments: gay/lesbian, people with disabilities, ethnic groups. †¢ Economic forces: consists of factors that affect consumer purchasing power and spending patterns. Some countries have subsistence economies they consume most of their own agricultural and industrial output. Others are industrial economies, which constitute rich markets for many different kinds of goods. people are spending more carefully since the recession of the early 2000s. alue marketing has become the watchword for many marketers. Rather than offering high quality at a high price, or lesser quality at very low prices, marketers are looking for ways to offer today’s more financially cautious buyers greater value – just the right combination of product quality and good service at a fair price. Over the past three dec ades, the rich have grown richer, the middle class has shrunk and the poor have remained poor. Food, housing and transportation use up the most household income. However consumers at different income levels have different spending patterns. Engel’s laws: as family income rise, the percentage spent on food declines, the percentage spent on housing remains about constant (except for such utilities as gas, electricity, and public services, which decrease), and both the percentage spent on most other categories and that devoted to savings increase. †¢ Natural forces: involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends in the natural environment: shortage of raw materials increased pollution increased government intervention In the U. S. the Environmental Protection Agency (EPA) was created in 1970 to set and enforce pollution standards and to conduct pollution research. †¢ Technological forces create new technologies, creating new product and market opportunities. They made a lot of wonders (televisions, cars, internet) and a lot of blunders (chemical weapons, nuclear missiles). New technologies cre ate new markets and opportunities. Every new technology replaces an older technology. As products and technology become more complex, the public needs to know that these are safe. Thus, government agencies investigate and ban potentially unsafe products. †¢ Political forces consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Almost every marketing activity is subject to a wide range of laws and regulations. Legislation affecting business around the world has increased steadily over the years. Regulations are constantly changing, marketers must work hard to keep up with changes in regulations and their interpretations. Reasons for business legislation: To protect companies from each other To protect consumers To protect the interest of society Cause-related marketing has become a primary form of corporate giving. It lets companies ‘do well by doing good’ by linking purchases of the company’s products or services with fund-raising for worthwhile causes or charitable organizations. Critics: cause-related marketing is more a strategy for selling than a strategy for giving. †¢ Cultural forces: institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviours. Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, businesses, and governments. Secondary beliefs and values are more open to change. Believing in marriage is a core belief, believing that people should get married early in life is a secondary belief. The major cultural values of a society are expressed in people’s views of themselves and others, as well as in their views of organizations, society, nature, and the universe. More people choose to stay home, this asks for home improvement and entertainment products (cocooning). People are getting more aware of nature( organic food, fuel-efficient cars People vary in their beliefs about the origin of the universe and their place in it. People have been moving away from materialism and dog-eat-dog ambition to seek more permanent values – family, community, earth, faith – and more certain grasp of right and wrong. Marketing management cannot always control environmental forces. But whenever possible, smart marketing managers will take a proactive rather than reactive approach to the marketing environment.