Principles of Marketing:

Chapter1: Marketing – Creating and capturing customer value

- Chapter perview:
o Amazon.com: Obsessed with creating customer value and relationships
 An empty chair represents the all-important customer, is occupied by a
“Customer Experience Bar Raiser” – represent customer’s interests
 The Kindle
 Perhaps more important than what A sells is how it sells
- What is marketing?
o Companies are strongly customer focused and heavily committed to marketing
(understanding and satisfying customer needs) => building lasting relationships
o Defined
 Marketing is managing profitable customer relationships
 Marketing: The process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in return.
 not “telling and selling” but “satisfying customer needs”
 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 Goal:
 To attract new customers by promising superior value
 To keep and grow current customers by delivering satisfaction [the simplest]
o The aim: “The aim of marketing is to make selling unnecessary.”
- Five steps in the process.
o Understand the marketplace and customer needs and wants
 needs, wants and demands
 design want-satisfying marketing offerings
 are not limited to physical products
 also include entities
 build value-laden customer relationships
 marketing myopia: brand experiences
 customer value and satisfaction:
 set the right level of expectations
 are key building blocks for developing and managing customer
relationships.
 exchanges and relationships: Marketing consists of actions taken to create,
maintain, and grow desirable exchange relationships with target audiences
 A market
 a modern marketing system
 “How should our customers reach us?”
 notice?

o Design a customer-driven marketing strategy

  marketing management: (customer management / demand management)
 two important ?:
 what’s your target
o selecting customers to serve: whom
o marketing managers know they cannot serve all but select only
customers that it can serve well and profitably
 how can we serve customers best
o a brand’s value proposition is the set of benefits or values it
promises to deliver to customers
 Marketing management orientations:
 the production concept
o products that are available and highly affordable

`  improving production and distribution efficiency

o the oldest orientation

o most likely lead to marketing myopia
 the product concept
o products that offer the most quality, performance, and features
o making continuous product improvements
o FAO
 the selling concept
o will not buy enough of the firm’s products unless the it undertakes
a large-scale selling and promotion effort
o unsought goods (insurance, blood donations)
o aggressive selling carries high risks : sales transaction > long-term,
profitable customer relationships (to sell what makes than the
market wants
 the marketing concept
o achieving organizational goals depends on knowing the needs and
wants of target markets and delivering the desired satisfactions
better than competitors do
o customer focus and value are the paths to sales and profits
o focus on “a customer-centered sense and respond” rather than
“product-centered make and sell”
o find the right products for your customers
 Figure 1.3 (contrasts the selling and marketing concept)
 the societal marketing
o a company’s marketing decisions should consider consumers’
wants, the company’s requirements, customers’ long-run interests,
and society’s long-run interests
o sustainable marketing
 shared value: societal and economic needs
o Figure 1.4 (balance profits, customer wants and society’s interests)
o Construct an integrated marketing program that delivers superior value
 deliver the intended value to target customers
 transforming the marketing strategy into action, consist of the firm’s marketing
mix
 the major tool: the four Ps marketing
 product: create need-satisfying offering
 price: how it will charge
 place: make it available to target customer
 promotion: communicate and persuade of its merits
o Build profitable relationships and create customer delight
 Customer relationship management: modern, important
 define: a customer data management activity (CRM)
 customer-perceived value
 customer satisfaction
o match customer’s expectation
o exceed theirs is highly satisfied or delighted
o smart companies aim to delight customers by promising only what
they can deliver and then delivering more
o customer evangelists
o other information
 customer relationship levels
 basic relationships
 full partnerships
 customer relationship tools
o frequency marketing programs
o club marketing programs
 The changing nature of customer relationships
 Relating with more carefully selected customers
o target fewer customer, more profitable
o use customer profitability analysis
 Relating more deeply and interactively
o interactive customer relationships
 new technologies have profoundly changed
 new communications approaches create deeper customer
involvement and a sense of community
 new technologies create challenges: customer-managed
relationships => intrusion and attraction => social network
marketing
o consumer-generated marketing
 consumers themselves are playing a bigger role in shaping
their own brand exp
 uninvited and invited one
 harness customer-generated content can be time-
consuming and costly process
  has become a significant marketing force
o Partner relationship management
 create customer value
 working closely with others inside and outside
 marketing channels consist of distributors, retailers, others
connecting with buyers => si[[ly chain management
o Capture value from customers to create profits and customer equity
 the final step involves capturing value in the form of sales, market share, and
profits
 the outcome of creating customer value
 creating customer loyalty and retention (maintain)
o good customer relationship => customer satisfaction
o drop in satisfaction (recession or economic uncertainty) => drop in
loyalty
o the aim of CRM is to create customer satisfaction and delight
 customer lifetime value
 growing share of customer [the portion of the customer’s purchasing that a
company gets in its product categories]
 CRM increases the share of customer
 building the right relationships with the right customers
 building customer equity
 the ultimate aim of CRM is to produce high customer equity
 suggest the future
 build the right relationship with the right customer
o classify customers according to their potential profitability and
projected loyalty
o 4 relationship groups: each requires a different relationship
management strategy

o group profitability loyal fit invest

o strangers low little little no
o butterflies potentially not good short
rarely to turn true friends
o true friends good good strong continuous
turn true believers
o barnacles not highly limite improve profitability
(con đỉa) d

- The major trends and forces affecting marketing in this age of customer relationships
o the changing economic environment
 the financial crisis causes consumers rethink their spending priorities and cut
back on buying
 The goal in uncertain economic times is to build market share and strengthen
customer relationships at the expense of competitors who cut back
 o the digital age
 fundamentally change the way communicating, sharing information … : a major
impact on the ways companies bring value to their customers
 the most dramatic DT is the Internet
 online marketing is the fastest-growing form of marketing
o the growth of not-for-profit marketing
 governments agencies are signing social marketing campaigns => concern for the
environment
o rapid globalization
 global marketing?
o sustainable marketing -the call for more ethics and social responsibility
 company is expected to deliver value in a socially and environmentally
responsible way

Chapter 2: Company and Marketing strategy

- Chapter preview:
o McDonald’s strategy to success
 New customer-focused strategic blueprint—called the Plan to Win
- Company- Wide Strategic Planning: Defining Marketing’s Role
o Strategic planning:
 the annual and long-range plans deal with the company’s current business and
how to keep going
 the strategic plan involves adapting the firm to take advantage of opportunities in
its constantly changing environment
o Corporate level
 Defining the company mission
 a mission statement : should be market oriented and defined in terms of
satisfying basic customer needs
 should be meaningful and specific yet motivating
 empathize strengths and tell how it intends to win in the marketplace
 Setting company objectives and goals
 detailed supporting objectives should be responsible by each manager
 marketing strategies and programs must be developed to support mar
objectives
 Designing the business portfolio
 business portfolio
 involve two steps :
o analyze the current business portfolio
 portfolio analysis
 management
 identify the key business (SBUs)
  the purpose is to find ways in which the company can best
use its strengths to take advantage of attractive
opportunities in the environment
 BCG

 Star: 2growth,  Question mark: low-

2share share, 2growth
 Cash cows: lowgr,  Dog: lowgr, low-share
2share

o shape the future portfolio
o Business unit, product, and market level
 Planning marketing and other functional strategies