MARKETING

CHAPTER 1 - CREATING AND CAPTURING CUSTOMER VALUE

DEFINITION: Marketing is a way of conceiving and executing the exchange relationship that
is satisfactory to the parties involved and to society, through the development, valuation,
distribution and promotion, by one of the parties, of the goods, services or ideas that the
other part needs. Marketing discovers, create, awake and satisfy customer´s needs.

The objective of marketing is to create, communicate and deliver value for a specific target
market with profit for the company.

Marketing is about managing profitable customer relationships

•Attracting new customers

•Retaining and growing current customers

4P → “The right product, in the right place, at the right time, and at the right price

LEARNING OBJECTIVES

1.Define marketing and outline the marketing process.

2.Explain the importance of understanding customers and the marketplace, and identify the
five core marketplace concepts
3.Identify the key elements of a customer-driven marketing strategy and discuss the
marketing management orientations.
4.Discuss customer relationship management and identify strategies for creating and
capturing value from customers.
5.Describe the major trends and forces changing the marketing landscape in this age of
relationships.

For an exchange to occur:

•There are at least two parties.
•Each party has something that might be of value to the other party.
•Each party is capable of communication and delivery.
•Each party is free to reject the exchange offer.
•Each party believes it is appropriate or desirable to deal with the other party.
THE MARKETING PROCESS

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 basic physical needs for food, clothing, warmth, and safety

•Social needs for belonging and affection

•Individual needs for knowledge and self-expression

•Wants are the form human needs take as they are shaped by culture and individual
personality

•Wants are shaped by one’s society and are described in terms of objects that will satisfy
those needs

•When backed by buying power, wants become demands

•Given their wants and resources, people demand products with benefits that add up to the
most value and satisfaction.
Market Offerings

•The market offers products, services, and experiences to satisfy a need or want

•Consumers’ needs and wants are fulfilled through market offerings

•Market offerings are not limited to physical products

Services include banking, airline, hotel, tax preparation, and home repair services

What is marketed?

•Goods •Places

•Services •Properties

•Events •Organizations

•Experiences •Information

•Persons •Ideas

Key Customer Markets

•Consumer markets

•Business markets

•International Markets/Global markets

•Nonprofit/Government markets

The 5 Marketing Management Concepts

•Production Concept

•The production concept holds that consumers will favor products that are available and
highly affordable

•Management should focus on improving production and distribution efficiency

•This concept is one of the oldest orientations

•Computer maker Lenovo dominates the highly competitive, price-sensitive Chinese PC

market through low labor costs, high production efficiency, and mass distribution
•Although this concept is useful in some situations, the production concept can lead to
marketing myopia

•Companies adopting this orientation run a major risk of focusing too narrowly on their own
operations and losing sight of the real objective

•They should be looking at satisfying customer needs and building customer relationships

•Product Concept

•The product concept holds that consumers will favor products that offer the most in quality,
performance, and innovative features

•This strategy focuses on making continuous product improvements

•Product quality and improvement are important parts of most marketing strategies

•Focusing only on the company’s products can also lead to marketing myopia

•Some manufacturers believe that if they can “build a better mousetrap, the world will beat a
path to their doors.”

•But they are often surprised

•Buyers may be looking for a better solution to a mouse problem but not necessarily for a
better mousetrap

•The better solution might be a chemical spray, a house cat, or something else that works
even better than a mousetrap

•Also, a better mousetrap will not sell unless the manufacturer designs, packages, and
prices it attractively, brings it to the attention of people who need it, etc.

•Selling Concept

•Consumers will not buy enough of the firm’s products unless it undertakes a large-scale
selling and promotion effort

•The selling concept is typically practiced with unsought goods, such as insurance or blood
donations

•These firms must be good at tracking down prospective customers and selling them on a
product’s benefits

•But aggressive selling carries high risks

•It focuses on creating sales transactions rather than on building long-term, profitable
customer relationships

•The objective is to sell what the company makes rather than making what the market wants

•This assumes that customers who are convinced to buy the product will like it

•Or, if they don’t like it, they may forget their disappointment and buy it again later
 •Marketing Concept

•The marketing concept holds that achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than
competitors do

•Under the marketing concept, customer focus and value are the paths to sales and profits

•Instead of a product-centered “make and sell” philosophy, the marketing concept is a

customer-centered “sense and respond” philosophy

•The job is not to find the right customers for your product but to find the right products for
your customers.

•Requires:

•Top management leadership

•A customer focus

•Competitor intelligence

•SWOT

•Interfunctional coordination to meet customer wants/needs and deliver superior

values

•Societal Marketing Concept

•The possible conflicts between consumer short-run wants and consumer long-run welfare

•Is a company that satisfies the immediate needs and wants of target markets always doing
what’s best for its consumers in the long run?

•The societal marketing concept maintains that marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and society’s well-being

•For example, the water bottle industry promotes health and wellness yet shipping millions of
plastic bottles generates a huge amount of carbon dioxide emissions that contribute to global
warming

•The plastic bottles also create a recycling and solid waste disposal problem.

•So in meeting the short-term consumer wants, the bottled water industry may be causing
environmental problems that hurt society’s long-term interests
DIFFERENCES BETWEEN SALES & MARKETING ORIENTATION

CUSTOMER RELATIONSHIP MANAGEMENT

•Forging long-term partnerships with customers and contributing to their success.

•Companies benefit from:

• repeat sales/referrals that lead to increases in sales, market share and profits

•decreased costs - it’s less expensive to serve existing customers than attract new
ones

•Customers benefit from:

•stable relationships with suppliers (especially in business-to-business)

•greater value and satisfaction

•discounts, (frequent flyer programs, shopper club cards, etc.)

•Successful relationship marketers have:

•customer-oriented employees

•effective training programs

•employees with authority to make decisions and solve problems

• teamwork
The aim of customer relationship management is to produce high CUSTOMER EQUITY,
the total combined customer lifetime values of all of the company’s customers.

The key to this is the creation of superior customer value and satisfaction.

The marketer’s aim is to build the right relationships with the right customers.

The company then captures value from customers in the form of profits and customer
equity.

Good marketers work closely with marketing partners inside and outside the company.

They must be good at customer relationship management and partner relationship

management.

4 marketing concept: specify the target

CUSTOMER RELATIONSHIP MANAGEMENT (5)

target the product to the right type of people

CHAPTER 2 - COMPANY AND MARKETING STRATEGY. PARTNERING TO BUILD

CUSTOMER RELATIONSHIPS

-Learning Objectives

1.Explain company-wide strategic planning and its four steps

2.Discuss how to design business portfolios and develop growth strategies

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

4.Describe the elements of a customer-driven marketing strategy and mix and the forces that
influence it

5.List the marketing management functions, elements of a marketing plan, and measuring
and managing return on marketing investment
Strategic Planning:
•Strategic planning: What is the company mission, objectives, goals and design the way to
get them
•Developing a strategic fit between
•organizational goals and capabilities, and changing marketing opportunities

Steps in strategic planning:

•Mission statement:
•Statement of an organization’s purpose
•What it wants to accomplish in the larger environment
•Need to be specific, realistic, and motivating
Marketing Mix and the Customer(exam)

•Set of controllable (can affect marketing decision), tactical marketing tools that are
blended to produce the desired response in the target market
Core concepts:

Successful marketing requires:

•Profitable à if there is not profit, you´re not going to sell it. Ex.Medicine that helps cancer
pacients, we have to study when (1 year, 2 years…) the company would start to have profit
when they market it

•Offensive (rather than defensive)

•Integrated

•Strategic (future-orientated)
•Effective (gets results)
BCG Growth-Share Matrix (1) (EXAM)

A company classifies all its SBU’s into 4 categories according to the growth-share matrix:

-On the vertical axis, market growth rate provides a measure of market attractiveness.
-On the horizontal axis, relative market share measures the company strength in the
market.

1. Stars are high-growth, high-share businesses or products. They often need heavy
investments to finance their rapid growth. Eventually their growth will slow down, and they
will turn into cash cows.

2. Cash cows are low-growth, high-share businesses or products. These established and
successful SBU’s need less investment to hold their market share. They produce a lot of the
cash that the company uses to pay its bills and support other SBU’s that need investment.

3. Questions marks are low-share business units in high-growth markets. They require a
lot of cash to hold their share and to increase it. Management has to decide which question
marks it should try to build into stars and which should be phased out.

4. Dogs are low-growth, low-share businesses and products. They may generate enough
cash to maintain themselves but do not promise to be large sources of cash.

5 forces driving profitability:

•Barriers to entry
•Power of the customer
•Power of suppliers
•Presence of substitutes
 •Competitive rivalry within industry

Developing Strategies for Growth and Downsizing (1)

1.Beyond evaluating current businesses, designing the business portfolio involves finding
businesses and products the company should consider in the future.

2.Companies need to grow if they are to compete more effectively, satisfy stakeholders, and
attract top talent.

3.A company’s objective must be to manage “profitable growth”.

4. Marketing has the main responsibility for achieving profitable growth for the company.

5. Marketing needs to identify, evaluate, select market opportunities, and establish strategies
for capturing them.

Product-Market Expansion Grid (1)

1. Product-market expansion grid:

Portfolio planning tool for identifying company growth opportunities

2. Market penetration:
Companies can grow by better penetrating current markets with current products.

3. Market development:
Identifying and developing new markets for its current products, such as reviewing
demographic markets.

4. Product development:
Offering modified or new products to current markets.

5. Diversification:
Companies can grow by starting up or buying businesses outside their current
product/markets.
 PARTNERING TO BUILD CUSTOMER RELATIONSHIPS

•Marketing’s role in strategic planning:

•Provides a guiding philosophy
•Provide inputs to help identify marketing opportunities and assess potential for taking
advantage of them
•Designs strategies for reaching objectives

•Partner relationship management:

Companies must work closely with partners in other company departments to form an
effective internal value chain that serves customers.

•Value chain:
Each department carries out value-creating activities to design, produce, market, deliver, and
support the firm’s products. The firm’s success depends not only on how well each
department performs its work but also on how well the various departments coordinate their
activities.

•Value delivery network:

Firms need to look beyond its own internal value chain and into the value chain of its
suppliers, distributors, and customers in order to improve the performance of the customer
value delivery network.

THE MARKETING PROCESS

Analyzing marketing opportunities

Selecting target markets
Developing the marketing mix
Managing the marketing effort

Market segmentation
Target marketing
Market positioning

SWOT

•Strengths (internal)

•Weaknesses (internal)

•Opportunities (external)

•Threats (external)
•Four marketing management functions:
•Marketing analysis
•Marketing planning
•Implementation
•Control

Contents of a Marketing Plan:

•Executive summary

•Current marketing situation

•Market description, product review, competition, and distribution

•Threat and opportunity analysis

•Objectives and issues

•Marketing strategy

•Action program

•Budgets

•Controls
 ● Mk: Understanding the marketplace and customer needs

Identifies clearly and expands on customer needs, wants, demands, market offerings
(products, services, experiences), value to customer after visit, customer satisfaction

● Mk: Integrated marketing plan and program (la que ya tienen)

Identifies clearly and expands on product, price, place, and promotion ( how are they
promoting themselves). 4P & 4C

● Mk: Marketing strategy and the marketing mix (actualizar su marketing) Qué es lo que
están buscando ahora

If we are going to target a different sector, offer another service...Ideas of new products
(existing or new market that we think it has potential). How do we know it has potential (after
doing a survey=excel c). How many people would purchase

CHAPTER 3 - ANALYZING THE MARKETING ENVIRONMENT

LEARNING OBJECTIVES

1.Describe the environmental forces that affect the company’s ability to serve its customers

2.Explain how changes in the demographic and economic environments affect marketing
decisions

3.Identify the major trends in the firm’s natural and technological environments

4.Explain the key changes in the political and cultural environments

5.Discuss how companies can react to the marketing environment

•Marketing environment:
Factors and forces outside of marketing’s direct control affect
management’s ability to develop and maintain successful transactions
with target customers
•Microenvironment:
Forces close to the company that affect its ability to serve customers
•Macroenvironment:
Larger societal forces that affect the organization’s microenvironment
Market environment:

THE COMPANY’S MICROENVIRONMENT

•The company:

•Departaments → Management, finance, research & development, purchasing,

manufacturing, accounting, human resources

•Functional areas of a company

•Suppliers:

•Provide the resources needed to produce goods and services

•Marketing intermediaries:
•Resellers, physical distribution firms, marketing service agencies, financial
intermediaries

•Help the company to promote, sell, and distribute its goods to final buyers

•Customers:

•Five types of markets that purchase a company’s goods and services

•Consumers, business, reseller, government, international markets

•Competitors:

•Those who serve a target market with similar products and services
•Publics:

•Any group that has an interest in a company’s ability to achieve its objectives

•Financial, media, government, citizen-action groups, local, general, internal

THE COMPANY’S MACROENVIRONMENT

1.Demographic environment:

-Study of the human population

-Size, density, location, age, race, sex, occupation, education, etc.

Trends of interest

World population growth Increased diversity

Changing age structure

Changing households

Higher education: the more you earn, the more you expend Geographic shifts

Ex.

2.Economic environment

Factors that affect consumer buying power and spending patterns

Trends of interest

Changes in income and continued spending by consumers

Consumer debt levels rising
Savings going down Changing spending patterns

Ex. The Tata nano. A car which costs 1700 euros.

3.Natural environment:

-Growing shortages of raw materials

-Increased pollution

-Increased government intervention

-National laws

-Green movement

-Focus on environmental and sustainability strategies

Ex. Fritolav is focused on missions that help the environment → They began using solar
energy, instead of fossil fuel, to help make SunChips® snacks.

4.Technological environment:

-New technology creates new markets and opportunities

-Replaces existing products and

services

-R&D activity drive this sector

-Government programs to encourage

more R&D

-Government agencies to regulate new product safety

5.Political & social environment:

-Laws, government agencies, and pressure

groups

-Influence and limit organizations and individuals within society

-Increasing legislation
-Emphasis on ethics and social responsibility

-Cause-related marketing

-Business legislation is used to protect consumers, businesses, and the interests of society

Ex. Toms→ when you buy a pair of shoes, you are helping someone needed

6.Cultural environment:

-Institutions and other forces that influence

-Society’s basic values, perceptions, preferences, and behaviors

-Core beliefs passed on through family, reinforced by schools, churches, business, and
government

-Secondary beliefs are more open to change

-People’s views of themselves, others,

organizations, society, nature, the universe
CHAPTER 4 - MANAGING MARKETING INFORMATION TO GAIN CUSTOMER
INSIGHTS

LEARNING OBJECTIVES
1.Explain the importance of information in gaining insights about the
marketplace and customers

2.Define the marketing information system and discuss its parts

3.Outline the steps in the marketing research process

4.Explain how companies analyze and use marketing information

5.Discuss the special issues some marketing researchers face, including public
policy and ethics issues

•MIS consists of:

•people and procedures for assessing information needs

•developing the needed information

•helping decision makers use the information

•to generate and validate actionable customer and market insights

•Example:

•Pepsi monitors online discussions about its brands by searching key words in
tweets, blogs, posts, and other sources

•Its servers take in 6 million public conversations a day!

•More than 2 billion a year!

•THIS IS TOO MUCH INFORMATION: they need to decide what information is

relevant

Marketers complain that they don’t need more information; they need better
information
•Customer Insight Teams/Groups

•Customer insight groups collect customer and market information from a wide
variety of sources

•These sources can include traditional marketing studies, mingling with and
observing consumers, and monitoring consumer online conversations. Ex:
sometimes a stranger talks to you in order to know your opinión. This people are
posible marketing workers that are making mkt studies.

•The Customer Insight Team then uses this information to develop important
customer insights for the company to create more value for its customers

•Assessing information needs:

•The objective of MIS is to make better marketing decisions so they don´t waste
money and time.

•You must consider the needs of all users

•Balance the information wants with needs and feasibility (and costs) of
offering it

•Developing information:

•Internal data

•Marketing intelligence

DEVELOPING MARKETING INFORMATION

•Internal data:

•Information collected, stored within the organization

•Internal databases

•Sourced from different departments

•Competitive marketing intelligence:

•Systematic collection and analysis

•Publicly available information

•About competitors and market developments

Ex. •Inditex: they figure out what you are going to want next. They do this through
marketing research. They use data from their website to make suggestions for your
next purchase

•Competitive marketing intelligence:

•Systematic collection and analysis

•Publicly available information

•About competitors and market developments

•Radian6 gives companies a Web-based platform that lets them listen to, share with,
learn from, and engage customers across the entire social Web

Ex. Radian 6 →

THE MARKETING RESEARCH PROCESS

•Marketing research:

•Systematic design, collection, analysis, and reporting

•Data relevant to a specific marketing situation

•Facing the organization

•Multi-step process
Can be done by company personnel or contracted to outside companies

•Defining the problem and research objectives:

•Exploratory research is to gather preliminary information that will help define the
problem and suggest hypotheses

•Descriptive research is to describe things, such as the market potential for a

product or the demographics and attitudes of consumers who buy the product

•Causal research is to test hypotheses about cause-and-effect relationships

•Developing the research plan:
•Secondary data is information that already exists somewhere, having been
collected for another purpose

•Primary data consists of information collected for the specific purpose at hand

•The research plan outlines sources of existing data and specifies the exact
research approaches, contact methods, sampling plans, and instruments that will be
used

Ex. Red Bull wants to conduct research on how consumers would react to a new
vitamin-enhanced water drink in several flavors

•Red Bull needs to be concerned with the following:

•The demographic, economic, and lifestyle characteristics of current Red Bull
customers

•The characteristics and usage patterns of the broader population of

enhanced-water users (The new Red Bull product would need strong, relevant
positioning in the crowded enhanced-water market)

•Retailer reactions to the proposed new product line (Failure to get retailer support
would hurt sales of the new drink)

•Forecasts of sales of both the new and current Red Bull products

GATHERING SECONDARY DATA

•There is a wealth of secondary data available but it must be evaluated:

•Is it relevant? (Does it fit the research project needs?)

•Is it accurate? (Was it reliably collected and reported?)

•Is it current? (Is it up-to-date enough for current decisions?)

•Is it impartial? (Was it objectively collected and reported?)

PRIMARY DATA COLLECTION

•Primary data collection:

•Observational research involves gathering primary data by observing relevant
people, actions, and situations

•Survey research
•Experimental research

•Focus group interviewing

•Online marketing research

•Primary data collection:

•Observational research: involves gathering primary data by observing relevant

people, actions, and situations
•Kraft Canada (http://www.kraftcanada.com/) sent its president and other high-level
Kraft executives to observe actual family life in a dozen diverse Canadian homes

•To better understand the challenges faced by elderly shoppers, a Kimberly-Clark

executive tries to shop while wearing vision- impairment glasses and bulky gloves
that simulate arthritis

•Survey research: is the most widely used method for primary data collection. A
company can ask consumers directly about their knowledge, attitudes, preferences,
and buying behavior.

•Advantage is that it can be conducted by phone, mail, in person, on the Web

•Disadvantages are people can’t remember, never thought about it, unwilling
to respond because of privacy, may not take the time

•Experimental research: gathers primary data by selecting matched groups of

subjects, giving them different treatments, controlling related factors, and checking
for differences in group responses

•McDonald’s could introduce a new sandwich at one price in one city and at another
price in another city. If the cities are similar and marketing efforts are the same, then
the differences in sales could be related to the price charged

•Focus group interviewing: consists of inviting 6-10 people to meet with a trained
moderator to talk about a product, service, or organization
•Disadvantages are focus groups are not always open and honest about their real
feelings, behavior, and intentions in front of other people, hard to generalize from the
results

•To help consumers relax and elicit more authentic responses, companies use
settings
that are more comfortable and more relevant to the products to being research

•Schick Canada started having “Slow Sip” sessions whether participants gathered in
a local café to sip coffee or tea and share personal shaving or moisturizing stories

Online marketing research: is done by collecting primary data online through

Internet surveys, online focus groups, Web-based experiments, and tracking
consumers’ online behavior.

•Speed and cost advantages

•Interactive and engaging

•Easier to complete

•Less intrusive than traditional phone or mail surveys

•Excellent medium to reach teens, single people, affluent, well- educated audiences,
working mothers

CONTACT METHODS
TYPES OF SAMPLES

•Sample:

•Segment of the population selected for marketing research

•Represent the population as a whole

•Probability sample:

•Simple random sample

•Every member of the population has a known and equal chance of selection

•Stratified random sample

The population is divided into mutually exclusive groups, such as age groups, and
random samples are drawn from each group

•Cluster (area) sample

The population is divided into mutually exclusive groups (such as blocks), and the
researcher draws a sample of the groups to interview

•Non-probability sample:

•Convenience sample
The researcher selects the easiest population members from which to obtain
information

•Judgment sample
The researcher uses his or her judgment to select population members who are
good prospects for accurate information

•Quota sample

The researcher finds and interview a prescribed number of people in each of several
categories
RESEARCH INSTRUMENTS

•Questionnaires

•Mechanical Instruments

•Eye-tracking goggles

•Neuromarketing measures brain activity to learn how consumers feel and

respond

-PepsiCo neuromarketing results showed that matte beige bags

showing potatoes and healthy ingredients trigger less activity in the area of
the brain associated with feelings of guilt than shiny packages showing
pictures of potato chips

•Implementing the research plan:

•Collecting, processing, and analyzing the information

•Check data for accuracy and completeness

•Tabulate the results and compute statistical measures

•Interpreting and reporting the findings:

•Interpret the findings, draw conclusions, and report them

•Present important findings and insights

•Interpret research results

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Managing detailed information about:

•Individual customers and “touchpoints”

•To maximize customer loyalty

•Use data warehouses and datamining techniques

•Purpose is to make better use of the information the company already has Goal is
to provide higher levels of customer service
OTHER MARKETING INFORMATION CONSIDERATIONS

•Research in small businesses and non-profit organizations

•International marketing research

•Public policy and ethics in marketing research:

•Privacy of information

•Selling under the guise of conducting research activities

•Misuse of research findings for promotional purposes

ejemplos preguntas del tema:

1.Explain the importance of information in gaining insights about the marketplace

and customers

2.Define the marketing information system and discuss its parts

3.Outline the steps in the marketing research process

4.Explain how companies analyze and use marketing information

5.Discuss the special issues some marketing researchers face, including public
policy and ethics issues

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