Core Principles of Marketing and Customer Value

Defining Marketing and Its Core Goals

Marketing is a business function dealing with customers. The simplest definition: marketing is engaging customers and managing profitable customer relationships. The goal of marketing is to:

• Attract new customers by promising superior value.
• Keep and grow current customers by delivering satisfaction.

Sound marketing is critical to the success of every organization. Both for-profit firms (such as Apple) and not-for-profit organizations use marketing. Marketing is all around you: at home, at university, and at work. Marketing is not only selling and advertising; it is satisfying customer needs.

Formal Definition of Marketing

The most complete definition: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

The Marketing Process

Step 1: Understand the Marketplace and Customer Needs

Needs: Basic states of felt deprivation.

• Physical needs: Food, clothing, warmth, and safety.
• Social needs: Belonging and affection.
• Individual needs: Knowledge and self-expression.

Wants: The form human needs take as shaped by culture and individual personality. Consumers' needs and wants are fulfilled by market offerings:

1. A combination of products, services, information, experiences, places, and ideas offered to a market to satisfy a need or a want.
2. Marketing myopia: Paying more attention to the specific products than to the benefits and experiences produced.
3. Brand experiences.

Customers face a broad array of products and services that satisfy a need. They choose among them based on the expectations about the value and satisfaction that various market offerings will deliver.

Exchange and Relationships

Exchange: The act of obtaining a desired object from someone by offering something in return.

Relationships: Marketing consists of actions taken to create, build, and maintain desirable exchange relationships.

Market: The set of all actual and potential buyers of a product. These buyers share a particular need or want.

Step 2: Designing a Customer Value-Driven Strategy

Marketing management must design a customer value-driven marketing strategy. Marketing management is the art and science of choosing target markets and building profitable relationships with them. The marketing manager must answer two important questions when designing a marketing strategy:

1. Which customers will we serve?
2. How can we serve these customers best? (e.g., IKEA)

Step 3: Preparing an Integrated Marketing Program

The company develops marketing plans and programs, known as the marketing mix.

Step 4: Building Profitable Customer Relationships

This is the overall process of building and maintaining profitable customer relationships.