Sem 2, AY2021/2022

Yang Lu
§ Define marketing and outline the steps in the marketing process.
§ Explain the importance of understanding the marketplace and customers
and identify core marketplace concepts.
§ Identify the key elements of a customer value-driven marketing strategy and
discuss the marketing management orientations that guide marketing
strategy.
§ Discuss customer relationship management and identify strategies for
creating value for customers and capturing value from customers in return.

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

§ Marketing process

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§ Customer needs
§ Needs: states of felt deprivation
§ Wants: the form human needs take as they are shaped by culture and individual
personality.
§ Demands: human wants that are backed by buying power.

§ Market offerings:
§ some combination of products, services, information, or experiences offered to a
market to satisfy a need or want.
§ Markets:
§ The set of actual and potential buyers of a product or service.

§ Exchange:
§ the act of obtaining a desired object from someone by offering something in return

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Marketing management is the art and science of choosing target markets and
building profitable relationships with them.
§ What customers will we serve (target market)?
§ Segments of customers (market segmentation)
§ Selecting which segments it will go after (target marketing)

§ How can we best serve these customers (value proposition)?

§ A brand’s value proposition is the set of benefits or values it promises to deliver to
customers to satisfy their needs.

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§ Marketing management orientations that guide marketing strategy
§ Production concept
§ The idea that consumers will favor products that are available and highly affordable.
§ Emphasize improving production and distribution efficiency.
§ Product concept
§ The idea that consumers will favor products that offer the most quality, performance, and
features.
§ Emphasize continuous product improvement.
§ Selling concept
§ The idea that consumers will not buy enough of the firms’ products unless the firm
undertakes a large-scale selling and promotion effort.
§ Marketing concept
§ Emphasize on knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do.
§ Societal Marketing concept
§ The idea that a company’s marketing decisions should consider consumers’ wants, the
company’s requirements, consumer’s long-run interests, and society’s long run interest.

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§ Selling and marketing concepts

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Societal marketing:
The company’s marketing decisions
should consider consumers’ wants,
the company’s requirements,
consumers’ long-run interests, and
society’s long-run interests

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 § Comment on this marketing
program idea

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§ Relevant metrics
§ Market share
§ the percentage of a market (defined in terms of either units or revenue) accounted for by a
specific entity
§ indicator of market competitiveness

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§ Relevant metrics
§ Category Development Index
§ It measures the sales performance of a category of goods or services within a specific group of
customers, compared with its average performance among all consumers.

§ Brand Development Index (BDI)

§ It quantifies how well a brand is performing within a specific group of customers, compared with
its average performance among all consumers.

§ Useful for understanding specific customer segments relative to the market as a whole.

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§ Developing an integrated marketing mix
§ The marketing mix is comprised of a set of tools known as the four Ps:

Four Ps Four As
Product Acceptability
Price Affordability
Place Accessibility
Promotion Awareness

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§ Customer relationship management - the overall process of building and
maintaining profitable customer relationships by delivering superior
customer value and satisfaction.

§ 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

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§ Customer-Engagement Marketing
§ Fosters direct and continuous
customer involvement in shaping
brand conversations, experiences, and
community.
§ Consumer-Generated Marketing
§ Brand exchanges created by
consumers themselves.
§ Consumers are playing an increasing
role in shaping brand experiences.

§ But careful…

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§ Customer lifetime value
§ the value of the entire stream of purchases that the customer would make over a
lifetime of patronage.
§ Share of customer is the portion of the customer’s purchasing that a
company gets in its product categories.
§ Offer greater variety to current customers
§ Cross-sell program
§ The process of encouraging customers to purchase products or services in addition to the
original items they intended to purchase
§ E.g., complimentary products
§ Up-sell program
§ The process of encouraging customers to upgrade or include add-ons to the product or
service they’re buying.

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§ Relevant metrics
§ Share of requirements (known as share of wallet)
§ A measure of loyalty
§ Reflects the market share a brand enjoys within a market narrowly defined as the people
who have purchased that brand.

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§ Relevant metrics
§ A relative measure that indicates how heavily the customers of a given brand use
the product category
§ Known as weight index
§ Help to define as measure whether a firm’s consumers are “heavy users”.

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§ Where do we get the data?
§ The Amazon Shopper
Panel is an opt-in,
invitation-only program
where participants can
earn monthly rewards by
sharing receipts from
purchases made outside of
Amazon.com and by
completing short surveys.

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§ Customer equity is the total
combined customer lifetime values
of all of the company’s current and
potential customers.
§ A measure of the future value of the
company’s customer base.
§ Customer as assets and need to be
managed and maximized.

Figure 1.5 Customer Relationship Groups

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§ To increase customer equity, Cadillac is
making the classic car cool again among
younger buyers. For example, says GM,
“Cadillac will lead the company to an all-
electric future.”

§ To increase customer equity, SK-II

targets younger generations across
genders.

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§ An extended model of the
marketing process

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§ L2 Marketing strategies

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