CHAPTER 1
customers and build strong customer relationships in
A. Definition of Marketing
B. Marketing Process
I. Understand the marketplace and customer
needs and wants
a. Five Core Customer And Marketplace
Concepts
(1) Needs, Wants, and Demands;
(2) Market Offerings (Products,
Services, and Experiences);
(3) Value and Satisfaction;
(4) Exchanges and Relationships;
(5) Markets.
II. Design a customer-driven marketing strategy
a. Marketing Management Philosophies
(1) Production orientation
(2) Sales Orientation
(3) Market Orientation
(4) Societal Marketing Orientation
III. Construct an integrated marketing program
that delivers superior value
IV. Build profitable relationships and create
customer delight
a. Customer Relationship Management
(1) Customer-Engagement Marketing
(2) Consumer-Generated Marketing
(3) Partner Relationship Management
V. Capture value from customers to create
profits and customer equity
a. Creating Customer Loyalty and Retention
b. Growing Share of Customer
c. Building Customer Equity
C. Changing Marketing Landscape
I. The Digital Age: Online, Mobile, and Social
Media Marketing (Social Media Marketing,
Mobile Marketing )
II. Changing Economic Environment
III. Growth of Not-for-Profit Marketing
IV. Rapid Globalization
V. Sustainable Marketing
Marketing
The process by which companies create value for
order to capture value from customers in return.
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.
Marketing myopia
The mistake of paying more attention to the specific
products a company offers than to the benefits and
experiences produced by these products.
Exchange
The act of obtaining a desired object from someone by
offering something in return. To exist (1) There must be
at least two parties, (2) Each party has something that
might be of value to the other party, (3) Each party is
capable of communication and delivery, (4) Each party is
free to accept or reject the offer, (5) Each party believes
it is appropriate or desirable to deal with the other
party.
Market
The set of all actual and potential buyers of a product or
service.
Marketing management
The art and science of choosing target markets and
building profitable relationships with them.
Production concept/ orientation
The idea that consumers will favor products that are
available and highly affordable and that the organization
should therefore focus on improving production and
distribution efficiency.
focuses on the internal capabilities of the firm rather
than on the desires and needs of the marketplace.
Sales Orientation Consumers themselves are playing a bigger role in
shaping their own brand experiences and those of
based on the ideas that people will buy more goods and
others.
services if aggressive sales techniques are used.
Examples: consumer-to-consumer blogs, video sharing
Market Orientation or Marketing Concept
sites, social media, and other digital forums.
focuses on the satisfaction of customers’ needs and
Partner Relationship Management
wants while meeting organizational objectives.
Working closely with partners in other company
Societal Marketing Orientation
departments and outside the company to jointly bring
states that an organization exists not only to satisfy greater value to customers.
customers’ wants and needs and to meet organizational
Customer Lifetime Value
objectives but also to preserve or enhance individual’s
and society’s long-term best interests. The value of the entire stream of purchases that the
customer would make over a lifetime of patronage.
Customer Satisfaction
Create customer’s delight.
customers’ evaluation of a good or service in terms of
Share of customer
whether that good or service has met their needs and
expectations. The portion of the customer’s purchasing that a
company gets in its product categories.
Relationship Marketing
Customer Equity
a strategy on keeping and improving relationships with
current customers. Strategies: customer-oriented the total combined customer lifetime values of all the
personnel, effective training programs, employees with company’s customers. It is a measure of the future
authority to make decisions and solve problems, and value of the company’s customer base.
teamwork.
Why Study Marketing?
Marketing Mix or 4P’s
1. It plays an important role in society.
product, price, place, and promotion
2. It is important to businesses.
Customer Relationship Management
3. It offers outstanding careers opportunities.
The overall process of building and maintaining
4. It is applied in everyday life.
profitable customer relationships by delivering superior
customer value and satisfaction.

Customer-perceived value

The customer’s evaluation of the difference between all

the benefits and all the costs of a marketing offer
relative to those of competing offers.

Customer-Engagement Marketing

fostering direct and continuous customer involvement in

shaping brand conversations, brand experiences, and
brand community.

Goal: to make the brand a meaningful part of

consumers’ conversations and lives.

Consumer-Generated Marketing CHAPTER 2

 A. Strategic planning Mission statement
I. Defining the company mission A statement of the organization’s purpose—what it
II. Setting company objectives and goals wants to accomplish in the larger environment.
III. Designing the Business Portfolio
a. Growth-share Matrix Business portfolio
b. Strategies for SBUs The collection of businesses and products that make up
i. Build - the company.
ii. Hold -
iii. Harvest - Portfolio analysis
iv. Divest - The process by which management evaluates the
c. Developing Strategies for Growth products and businesses that make up the company.
and Downsizing
i. Market penetration Growth-share matrix
ii. Product development
iii. Market development A portfolio-planning method that evaluates a company’s
iv. Diversification SBUs in terms of its market growth rate and relative
IV. Planning marketing and other functional market share.
strategies
Market Growth Rate
a. Customer-Driven Marketing Strategy
provides a measure of market attractiveness.
i. Market Segmentation
ii. Market Targeting Relative Market Share
iii. Differentiation serves as a measure of company strength in the market.
iv. Positioning
b. Developing an Integrated Marketing Stars
Mix are high-growth, high-share businesses or products.
B. Managing the Marketing Effort They often need heavy investments to finance their
I. Marketing Analysis rapid growth. Eventually their growth will slow down,
II. Marketing Planning and they will turn into cash cows.
III. Marketing Implementation
IV. Marketing Control Cash Cows
Cash cows are low-growth, high-share businesses or
products. These established and successful SBUs need
less investment to hold their market share. Thus, they
produce a lot of the cash that the company uses to pay
its bills and support other SBUs that need investment.

Question marks
are low-share business units in high-growth markets.
They require a lot of cash to hold their share, let alone
increase it. Management has to think hard about which
question marks it should try to build into stars and
which should be phased out.

Strategic planning
The process of developing and maintaining a strategic fit
between the organization’s goals and capabilities and its
changing marketing opportunities.
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.
Product/market expansion grid
A portfolio-planning tool for identifying company
growth opportunities through market penetration,
market development, product development, or
diversification.
Market penetration Product (Customer Solution)
Company growth by increasing sales of current products goods and services combination the company offers to
to current market segments without changing the the target market.
product.
Price (Customer Cost)
Market Development amount of money customers must pay to obtain the
company growth by identifying and developing new product.
market segments for current company products.
Place (Convenience)
Product Development includes company activities that make the product
company growth by offering modified or new available to target consumers.
products to current market segments.
Promotion (Communication)
Diversification refers to activities that communicate the merits of the
company growth through starting up or acquiring product and persuade target customers to buy it.
businesses outside the company’s current products and
Strengths
markets.
internal capabilities that may help the company reach
Marketing Strategy its objectives.
is a marketing logic by which the company hopes to
Weaknesses
create customer value and achieve profitable customer
internal limitations that may interfere in reaching
relationships.
company’s objectives.
Market Segmentation
Opportunities
dividing a market into distinct groups of buyers who
external factors that the company may exploit at their
have different needs, characteristics, or behaviours, and
advantage
who might require separate products or marketing
programs Threats
current and emerging external factors that may
Market Segment
challenge the company’s performance.
a group of consumers who respond in a similar way to a
given set of marketing efforts. Marketing Planning
involves choosing marketing strategies that will help the
Market Targeting
company attain its overall strategic objectives. A
process of evaluating each market segment’s
detailed marketing plan for each business, product or
attractiveness and selecting one or more segments to
brand.
enter.
Marketing Implementation
Positioning
turning marketing strategies and plans into marketing
arranging a product to occupy a clear, distinctive and
actions to accomplish strategic marketing objectives.
desirable place relative to competing products in the
minds of target consumers. Marketing Control
Measuring and evaluating the results of marketing
Differentiation
strategies and plans and taking corrective action to
differentiating the market by creating a superior
ensure that the objectives are achieved.
customer value.
Return On Marketing Investment (Or Marketing ROI)
Marketing Mix
The net return from a marketing investment divided by
The set of tactical marketing tools— product, price,
the costs of the marketing investment
place, and promotion— that the firm blends to produce
the response it wants in the target market. Chapter 3: Marketing Environment

I. The Microenvironment
a. The Company
b. Suppliers
 c. Marketing Intermediaries
d. Competitors
e. Publics
f. Customers
II. The Macroenvironment
a. The Demographic Environment
b. The Economic Environment
c. The Natural Environment
d. The Technological Environment
e. The Political and Social Environment
f. The Cultural Environment
III. Responding to the Marketing Environment
Any group that has an actual or potential interest in or impact
on an organization’s ability to achieve its objectives.
Financial publics
This group influences the company’s ability to obtain funds.
Banks, investment analysts, and stockholders are the major
financial publics.
Media publics
This group carries news, features, and editorial opinion. It
includes newspapers, magazines, television stations, and
blogs and other Internet media.

Marketing environment
The actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with target customers.
Government publics
Management must take government developments into
account. Marketers must often consult the company’s lawyers
on issues of product safety, truth in advertising, and other
matters.

Microenvironment Citizen-action publics

The actors close to the company that affect its ability to serve
its customers— the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics.
Macroenvironment
The larger societal forces that affect the microenvironment—
demographic, economic, natural, technological, political, and
cultural forces.
Marketing intermediaries
Firms that help the company to promote, sell, and distribute
its goods to final buyers.
Resellers
are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers
and retailers who buy and resell merchandise.
Physical distribution firms
help the company stock and move goods from their points of
origin to their destinations.
Marketing services agencies
are the marketing research firms, advertising agencies, media
firms, and marketing consulting firms that help the company
target and promote its products to the right markets.
Financial intermediaries
include banks, credit companies, insurance companies, and
other businesses that help finance transactions or insure
against the risks associated with the buying and selling of
goods.
Public
A company’s marketing decisions may be questioned by
consumer organizations, environmental groups, minority
groups, and others. Its public relations department can help it
stay in touch with consumer and citizen groups.
Local publics
This group includes neighborhood residents and community
organizations. Large companies usually create departments
and programs that deal with local community issues and
provide community support.
Consumer markets
consist of individuals and households that buy goods and
services for personal consumption.
Business markets
buy goods and services for further processing or use in their
production processes, whereas reseller markets buy goods
and services to resell at a profit.
Government markets
consist of government agencies that buy goods and services
to produce public services or transfer the goods and services
to others who need them.
International markets
consist of these buyers in other countries, including
consumers, producers, resellers, and governments.
Demography
The study of human populations in terms of size, density,
location, age, gender, race, occupation, and other statistics.
Baby Boomers, who were born between 1946 and 1964.
Generation X. “birth dearth,” born btwn 1965 and 1976
Millennials (or Generation Y) between 1977 and 2000.
Generational Marketing.
Do marketers need to create separate products and marketing
programs for each generation?
Economic environment
Economic factors that affect consumer purchasing power and
spending patterns.
Industrial Economies
which constitute rich markets for many different kinds of
goods.
Subsistence Economies
they consume most of their own agricultural and industrial
output and offer few market opportunities.
Developing Economies
that can offer outstanding marketing opportunities for the
right kinds of products.
Natural environment
Natural resources that are needed as inputs by marketers or
that are affected by marketing activities.
Environmental sustainability
Developing strategies and practices that create a world
economy that the planet can support indefinitely.
Technological environment
Forces that create new technologies, creating new product
and market opportunities.
Political environment
Laws, government agencies, and pressure groups that
influence and limit various organizations and individuals in a
given society.
Cultural environment
Institutions and other forces that affect society’s basic values,
perceptions, preferences, and behaviors.
Chapter 4: Managing Marketing Information to Gain
Customer Insights
I. Marketing Information and Customer Insights
II. Assessing Marketing Information Needs
III. Developing Marketing Information
a. Internal Data
b. Competitive Marketing Intelligence
c. Marketing Research
i. Defining the Problem and Research
Objectives
ii. Developing the Research Plan
iii. Gathering Secondary Data
iv. Primary Data Collection
v. Implementing the Research Plan
vi. Interpreting and Reporting the Findings
IV. Analyzing and Using Marketing Information
a. Customer Relationship Management
b. Distributing and Using Marketing Information
Customer insights
Fresh understandings of customers and the marketplace
derived from marketing information that become the basis for
creating customer value and relationships.
Marketing information system (MIS)
People and procedures for assessing information needs,
developing the needed information, and helping decision
makers to use the information to generate and validate
actionable customer and market insights.
Internal databases
Electronic collections of consumer and market information
obtained from data sources within the company network.
Competitive marketing intelligence
The systematic collection and analysis of publicly available
information about consumers, competitors, and
developments in the marketing environment.
Marketing research
The systematic design, collection, analysis, and reporting of
data relevant to a specific marketing situation facing an
organization.
Exploratory research
Marketing research to gather preliminary information that will
help define problems and suggest hypotheses.
Descriptive research
Marketing research to better describe marketing problems,
situations, or markets, such as the market potential for a
product or the demographics and attitudes of consumers.
Causal research
Marketing research to test hypotheses about cause-and-effect
relationships.
 Individual interviewing

Involves talking with people in their homes or offices, on the

street.

Focus group interviewing

Personal interviewing that involves inviting six to ten people

Secondary data to gather for a few hours with a trained interviewer to talk
about a product, service, or organization. The interviewer
Information that already exists somewhere, having been
“focuses” the group discussion on important issues.
collected for another purpose.
Online marketing research
Primary data
Collecting primary data online through Internet surveys,
Information collected for the specific purpose at hand.
online focus groups, Web-based experiments, or tracking
Commercial online databases consumers’ online behavior.

Collections of information available from online commercial Online focus groups

sources or accessible via the Internet.
Internet search engines
can be a big help in locating relevant secondary information
sources.
Relevant (fits research project needs)
Accurate (reliably collected and reported)
Current (up-to-date enough for current decisions)
Gathering a small group of people online with a trained
moderator to chat about a product, service, or organization
and gain qualitative insights about consumer attitudes and
behavior.
Sample
A segment of the population selected for marketing research
to represent the population as a whole.

Impartial (objectively collected and reported)

Observational research

Gathering primary data by observing relevant people, actions,

and situations.

Ethnographic research

A form of observational research that involves sending trained Customer relationship management (CRM)
observers to watch and interact with consumers in their
“natural environments.” Managing detailed information about individual customers
and carefully managing customer touch points to maximize
Survey research customer loyalty.
Gathering primary data by asking people questions about
their knowledge, attitudes, preferences, and buying behavior.
Chapter 5: Consumer Markets and Consumer Buyer Behavior
Experimental research
I. Model of Consumer Behavior
Gathering primary data by selecting matched groups of II. Characteristics Affecting Consumer Behavior
subjects, giving them different treatments, controlling related a. Cultural Factors
factors, and checking for differences in group responses. b. Social Factors
c. Personal Factors
Mail questionnaires
d. Psychological Factors
can be used to collect large amounts of information at a low III. Types of Buying Decision Behavior
cost per respondent. a. Complex Buying Behavior
b. Dissonance-Reducing Buying Behavior
c. Habitual Buying Behavior
d. Variety-Seeking Buying Behavior
Telephone interviewing
IV. The Buyer Decision Process
is one of the best methods for gathering information quickly, a. Need Recognition
and it provides greater flexibility than mail questionnaires. b. Information Search
 c. Evaluation of Alternatives The unique psychological characteristics that distinguish a
d. Purchase Decision person or group.
e. Postpurchase Behavior
V. The Buyer Decision Process for New Products Motive (drive)
a. Stages in the Adoption Process A need that is sufficiently pressing to direct the person to seek
b. Individual Differences in Innovativeness satisfaction of the need.
c. Influence of Product Characteristics on Rate of
Adoption Motivation Research

Consumer buyer behavior refers to qualitative research designed to probe consumers’

hidden, subconscious motivations.
The buying behavior of final consumers— individuals and
households that buy goods and services for personal Perception
consumption.
The process by which people select, organize, and interpret
Consumer market information to form a meaningful picture of the world.

All the individuals and households that buy or acquire goods Selective attention
and services for personal consumption.
the tendency for people to screen out most of the
Culture information to which they are exposed.

The set of basic values, perceptions, wants, and behaviors

learned by a member of society from family and other
important institutions.

Subculture

A group of people with shared value systems based on

common life experiences and situations.

Social class

Relatively permanent and ordered divisions in a society

whose members share similar values, interests, and
behaviors.

Group

Two or more people who interact to accomplish individual or

mutual goals.

Opinion leader
A person within a reference group who, because of special
skills, knowledge, personality, or other characteristics, exerts
social influence on others.
Selective distortion
describes the tendency of people to interpret information in a
way that will support what they already believe.

Buzz marketing Selective retention

involves enlisting or even creating opinion leaders to serve as means that consumers are likely to remember good points
“brand ambassadors” who spread the word about a made about a brand they favor and forget good points made
company’s products. about competing brands.

Online social networks Learning

Online social communities—blogs, social networking Web Changes in an individual’s behavior arising from experience.
sites, or even virtual worlds—where people socialize or
Belief
exchange information and opinions.
A descriptive thought that a person holds about something.
Lifestyle
Attitude
A person’s pattern of living as expressed in his or her
activities, interests, and opinions. A person’s consistently favorable or unfavorable evaluations,
feelings, and tendencies toward an object or idea.
Personality
Complex buying behavior New product

Consumer buying behavior in situations characterized by high
consumer involvement in a purchase and significant perceived
differences among brands.
Dissonance-reducing buying behavior
Consumer buying behavior in situations characterized by high
involvement but few perceived differences among brands.
A good, service, or idea that is perceived by some potential
customers as new.
Adoption process
The mental process through which an individual passes from
first hearing about an innovation to final adoption.

Habitual buying behavior

Consumer buying behavior in situations characterized by low-

consumer involvement and few significantly perceived brand
differences.

Variety-seeking buying behavior

Consumer buying behavior in situations characterized by low

consumer involvement but significant perceived brand
differences.

Need recognition

The first stage of the buyer decision process, in which the

consumer recognizes a problem or need.

Information search

The stage of the buyer decision process in which the

consumer is aroused to search for more information; the
consumer may simply have heightened attention or may go
into an active information search.

Alternative evaluation

The stage of the buyer decision process in which the

consumer uses information to evaluate alternative brands in
the choice set.

Purchase decision

The buyer’s decision about which brand to purchase.

Postpurchase behavior

The stage of the buyer decision process in which consumers

take further action after purchase based on their satisfaction
or dissatisfaction with a purchase.

Cognitive dissonance

Buyer discomfort caused by postpurchase conflict.