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Marketing: The Art and Science of Satisfying Customers CH1

Page 1: Chapter 1 — Marketing: The Art and Science of Satisfying Customers

  • This page introduces Chapter 1 and frames marketing as both an art and a science focused on satisfying customers.

Page 2: A Definition of Marketing

  • Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Page 3: My definition of Marketing

  • Marketing pertains to all decisions involved in creating and keeping customers by understanding their needs of consumers and satisfying them.

  • Customer satisfaction = Performance – Expectations

  • In markdown form the explicit formula is: \text{Customer satisfaction} = \text{Performance} - \text{Expectations}

Page 4: Customer Value

  • Customer value is the relationship between benefits and the sacrifice necessary to obtain those benefits.

  • Note: The idea is that value increases with greater benefits and/or lower sacrifices, though the exact expression is not formalized in this text.

Page 5: Customer Satisfaction

  • Customer satisfaction is the feeling that a product met or exceeded the customer's expectations.

Page 6: The Exchange Process

  • Exchange involves two or more parties giving something of value to each other to satisfy felt needs.

Page 7: Exchange

  • Elements of exchange include:

    • At least two parties

    • Something of value each party provides

    • Communication and delivery

    • Freedom to accept or reject

    • Desire to deal with the other party

    • Conditions for exchange

Page 8: Demand

  • Demand is a measure of the desire that potential customers have for a product or service, plus their willingness and ability to pay for it.

Page 9: Does Marketing Create Artificial Demand?

  • This page poses the question of whether marketing creates demand abnormally or artificially.

Page 10: Production Era

  • Focus: Manufacturing/production

  • Success is often defined solely in terms of production victories

  • Emphasis on internal capabilities

Page 11: Sales Era

  • Focus: Selling to customers who resist nonessential goods

  • Strategy: Aggressive personal selling and advertising

  • Objective: Maximizing sales volumes

Page 12: Marketing Era

  • Focus: Find out customers’ needs and fulfill them

  • Balance: Satisfy consumer needs while meeting firm objectives and long-term goals

Page 13: Comparing the Sales and Market Era

  • Points of comparison include:

    • Organization’s focus

    • The firm’s business

    • Those to whom the product is directed (target customers)

    • The firm’s primary goal

    • The tools used to achieve those goals

Page 14: Relationship Era

  • Focus is on developing customers into repeat, loyal customers to increase their lifetime value.

  • Marketing uses customer relationship management (CRM).

  • Relationships involve building long-term bonds with customers.

Page 15: Social Era

  • Builds on the Relationship Era.

  • Emphasizes the use of web and social networking sites to connect to consumers.

Page 16: Is Marketing for Products only?

  • This page raises a question about the scope of marketing beyond products.

Page 17: Nontraditional Marketing

  • Categories include:

    • Person marketing

    • Place marketing

    • Organization marketing

    • Event marketing

    • Cause marketing

Page 18: What is Marketing Strategy?

  • Definition: It means deliberately choosing a different set of activities to deliver a unique mix of value to the target market.

Page 19: Target Market

  • Definition: Group of people toward whom the firm decides to direct its marketing efforts.

Page 20: The Marketing Mix

  • The four elements are:

    • Product

    • Promotion

    • Price

    • Place

  • Also associated concept: Target Market (the group the marketing efforts are directed toward)

Page 21: What do the 4Ps do?

  • This page asks: What do the 4Ps do?

  • Followed by garbled/unclear text: "Ownership Form Functions Watford ON Brentw LON ON Place XII Time ΠΛ" which appears to be OCR or transcription noise.

  • Takeaway: The intended discussion is about the roles/functions of the 4Ps, though the exact content here is not readable.

Page 22: Creativity and Critical Thinking

  • The challenges of the marketplace require critical thinking and creativity.

  • Creativity produces original ideas or knowledge.

  • Critical thinking determines the authenticity, accuracy, and worth of information, knowledge, claims, and arguments.

Connections and themes across pages

  • Evolution of marketing thought: Production Era → Sales Era → Marketing Era → Relationship Era → Social Era, showing a shift from internal capabilities and pushing products to understanding and fulfilling customer needs, building long-term relationships, and leveraging technology.

  • Core concepts: value, demand, exchange, customer satisfaction, and the degree to which a firm can align its objectives with customer needs.

  • Customer-centric metrics: customer satisfaction (formula on Page 3) and lifetime value (mentioned in Page 14 as part of relationship-building strategy).

  • Nontraditional marketing expands the scope of marketing to individuals, places, organizations, events, and causes (Page 17).

  • Marketing strategy emphasizes deliberate choice and differentiation to deliver a unique value mix to the target market (Page 18).

Key terms to remember

  • Marketing definition (Page 2)

  • Customer satisfaction formula: \text{Customer satisfaction} = \text{Performance} - \text{Expectations}

  • Demand definition (Page 8)

  • The four Ps: Product, Promotion, Price, Place (Page 20)

  • Target market definition (Page 19)

  • CRM and relationship-building (Page 14)

  • Eras of marketing: Production, Sales, Market/Marketing, Relationship, Social (Pages 10–15)

  • Nontraditional marketing categories (Page 17)

  • Creativity and critical thinking (Page 22)

Definition of Marketing

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (Page 2).

My definition: Marketing pertains to all decisions involved in creating and keeping customers by understanding their needs of consumers and satisfying them (Page 3).

Understand the Exchange Process

Exchange involves two or more parties giving something of value to each other to satisfy felt needs (Page 6).

Elements of exchange include:

  • At least two parties

  • Something of value each party provides

  • Communication and delivery

  • Freedom to accept or reject

  • Desire to deal with the other party

  • Conditions for exchange (Page 7)

The five different Eras (Management Philosophies)
Production Era

: Focus on manufacturing/production; success defined by production victories; emphasis on internal capabilities (Page 10).

Sales Era

: Focus on selling to customers who resist nonessential goods; strategy of aggressive personal selling and advertising; objective of maximizing sales volumes (Page 11).

Marketing Era

: Focus on finding out customers’ needs and fulfilling them; balance consumer needs with firm objectives and long-term goals (Page 12).

Relationship Era

: Focus on developing customers into repeat, loyal customers to increase their lifetime value; uses customer relationship management (CRM); building long-term bonds (Page 14).

Social Era

: Builds on the Relationship Era; emphasizes the use of web and social networking sites to connect to consumers (Page 15).

Differences between sales and market orientations
Sales Orientation

(Sales Era):

  • Organization’s focus: Internal capabilities.

  • The firm’s business: Selling goods and services.

  • Target customers: Everyone.

  • The firm’s primary goal: Maximizing sales volume.

  • Tools to achieve goals: Primarily intensive promotion.

Market Orientation

(Marketing Era):

  • Organization’s focus: Customer needs and wants.

  • The firm’s business: Satisfying customer needs and wants.

  • Target customers: Specific groups of people.

  • The firm’s primary goal: Satisfying customer needs while achieving organizational objectives.

  • Tools to achieve goals: Coordinated use of marketing activities (the Marketing Mix).

What is demand?

Demand is a measure of the desire that potential customers have for a product or service, plus their willingness and ability to pay for it (Page 8).

Different types of Nontraditional marketing

Categories include:

  • Person marketing

  • Place marketing

  • Organization marketing

  • Event marketing

  • Cause marketing (Page 17)

What is marketing strategy?

Marketing strategy means deliberately choosing a different set of activities to deliver a unique