[FDNMARK] Chapter 2 & 3: The Marketing Process and Marketing Environment

Marketing

Marketing

the process by which companies create value for customers and build strong relationships to capture value from customers in return

Understanding the Marketplace and customer needs
Designing a Customer-Driven Strategy
Preparing an Integrated Plan and Program
Building Customer Relationships
Capturing Value from Customers

The Marketing Framework

Need

states of deprivation

Want

formed and shaped by culture and individual personality

Demand

wants backed by buying/purchasing power

Market Offerings

some combination of products, services, information, or experiences offered to a market to satisfy a need or want

Marketing Myopia

focusing only on existing wants and losing sight of underlying consumer needs

Segmenting

process of dividing the total market into smaller groups seeking similar needs and wants from a product or service

Targeting

consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter

Positioning

the way the product is defined by consumers on important attributes; the place where the product occupies in consumers’ minds relative to competing products

Demographic

dividing the market into segments based on the variables such as:

• age

• gender

• family size cycle

• income

• occupation

• education

• religion

• race

• generation

• nationality

Geographic

dividing the market into different geographical units, such as:

• nations

• states

• regions

• countries

• cities

• neighborhoods

Psychographic

dividing the market into segments based on:

• social classes

• lifestyles

• personality characteristics

Behavioral

dividing the market into segments based on:

• consumer knowledge

• attitudes

• uses

• responses to a product

Production
Product
Selling
Marketing
Societal

5 Marketing Management Orientations

Production Concept

improving production and distribution efficiency

Product Concept

continuous product improvements

Selling Concept

typically practiced with unsought goods

Marketing Concept

customer focus and value are the paths to sales and profits

Societal Concept

improves both the consumer’s and the society’s well-being

Integrated Marketing Program

a comprehensive plan that communicates and delivers the intended value to chosen customers

Customer Relationship Management

the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction

Customer Perceived Value

the difference between total customer value and total customer cost of marketing offering relative to those of competing offers

Customer Satisfaction

the extent to which product's perceived performance matches a buyer's expectations

Customer Lifetime Value

the value of the entire stream of purchases that 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

Customer Equity

total combined customer lifetime values of all of the company's customers

Internal Environment

includes the factors that affect the performance from within its boundaries

internal factors

within the organization's control

external factors

outside the organization's control

Task Environment

the environment of the organization or set of conditions originating from suppliers, distributors, customers, stock markets, and competitors which directly affects the organization from attaining business goals

Competitors
Customers
Suppliers
Distributors
Substitute Products
New Entrants

(6) Task Environment

Competitors

encourages progress and product development

Competitors

forces organizations to be more innovative and productive

Customers

create profits, the basic reason for the very existence of any business organization

Customers

knowledge about their needs and fulfilling these needs is an organization's primary concern

Customers

an organization must continuously monitor their environment in terms of any changes in customers' needs or preferences

Suppliers

an organization must interact with them from whom inputs (materials, equipment, energy, capital, and labor) are obtained which will be transformed into outputs of products and services

Distributor

play a vital role in keeping the lines between manufacturers and users operating smoothly

Distributor

can expedite response times, enhance a company's reach and even create value-added packages

Distributor

their benefit is the speed with which manufacturers can respond to customers demands

Substitute Products

offer either price or quality or convenience advantages

Substitute Products

firms that ignore the potential threats from them find themselves losing their market share

New Entrants

all organizations want to keep their number in the given industry limited

New Entrants

increases competition and decreases profitability

Socio-cultural
Technological
Economic
Environmental
Politico-legal
Global

General Environment Components

Vulnerable
Uncertain
Complex
Ambiguous

VUCA

Convenience
Shopping
Specialty
Unsought

(4) Types of Products

Value
Brand
Relationship

(3) Types of Customer Equity