The Principles of Marketing

Marketing. Why do your customers like your company? What makes them want to come back and buy again?
Marketing means managing customer relationships in a profitable way. It means that you are living up to who you claim to be and what you claim to do. It defines what your company really stands for...
Apple's slogan is "Think Different". Is that not what they do all day long? They are constantly inventing and producing the newest, greatest, and coolest things out there. They stick to their motto quite well. And why are they so successful? Because they build and manage profitable customer relationships by creating a superb line of technology and maintaining their positive company image always. This is effective marketing.

This figure represents The Marketing Process according to Principles of Marketing (POM). This process is as follows:                                                                    

The Marketing Process

1) Understanding your customer. What does your customer need, what does your customer want, and what does your customer demand. Many companies make the common mistake called Marketing Myopia, which means that the company doesn't pay as much attention to the benefits produced by the products, as they are to focusing on the specific products themselves. You have to focus on your customers more than the company itself when it comes to marketing. It's all about making the customers happy, whether you're selling food, selling clothing, or providing a service. Make them happy enough that they'll want to return.
Now your company can obviously only do a good job marketing its products if everyone in the chain is doing their job well. So if your suppliers aren't supplying and replenishing your products quickly, you can't promise customers that you have everything done on time, because you just don't. Lying to customers although sometimes seems necessary, is usually not the best idea because it just frustrates them and causes them to have negative feelings about the company. Avoid creating a negative company-image in people's minds at all costs.

2) Next, you want to design a marketing strategy that is specific and appropriate to your target market. If you are marketing for the Trump Hotel Collection for example, you have to realize that your target market is not your average man on the street, but rather professional millionaires. Therefore, know what they value, want, and demand.                                                                                  
Companies vary on the exact philosophy they use in order to carry out their marketing strategies. Some focus more on producing and selling, making their products as available and affordable as possible, while others focus less on "make and sell", and focus more on "sense and respond", seeking the right products for their customers. The latter of the two is what is called the Marketing Concept. Part of this, called the Societal Marketing Concept holds that the company should not only consider on the consumer's short-term wants, but also on society's long-run interests. There are many examples that can illustrate this concept, but here is a very simple one:

Odwalla had an outbreak of E. coli bacteria in 1996 in many of their juices and mixes. Their decision was to recall all of their products, costing them millions of dollars, even though there was no evidence that the bacteria even came from within Odwalla factories. This decision was made because Odwalla cares about customer safety, and is not only driven to make profit. Simply put, it's "putting people before profits".
The Societal Marketing Concept says that although it's very important for a company to consider consumers' immediate desires, it's also very important that society's long-term interests are taken into consideration as well. This includes caring about the environment, which explains the recent focus on "go green" slogans and productions.

3) Every company has to construct its own marketing strategy that outlines the company's values and beliefs. This strategy should be able to be broken down into the "Four P's of Marketing": product, price, place, and promotion. In other words, the company starts off creating a needed product, chooses a price and place to make it available to consumers, and then persuades them to purchase that product.

Jack Welch

4) The company needs to build strong relationships with customers. Jack Welch, former CEO of G.E., is famous for the message that he always relayed: "If you are not thinking customer, you are not thinking." At the end of the day, if you don't have customers, you don't have a business. It's that simple. This is why building effective relationships with customers is vital if you want to succeed in the business world. It's not enough to just understand this idea, you have to apply it to your everyday life, always thinking about your customer's needs and wants.
       Customer relationship management (CRM), is the overall process of building and keeping profitable customer relationships by constantly delivering satisfaction and value. Customer-perceived value is the customer's evaluation of why your product is better or worse than your competitor's products. Customer satisfaction results when your product matches the customer's expectations. The ways in which companies relate to their customers change over time. As time goes on, companies are more focused on forming lasting relationships with target customers rather than trying to reach all potential customers.
 Best Buy recently created a new "Customer-Centricity" strategy that distinguishes between their most valuable and least valuable consumers. They develop reward methods such as discounts to attract their most profitable customers, while at the same time purposely discourage irregular, unprofitable customers by charging restocking fees.
      More and more companies are making use of the internet as a source to advertise and allure consumers. Facebook, YouTube, and many more social networking sites are being utilized to be as interactive with customers as possible. This creates a type of marketing called consumer-generated marketing, as the consumers themselves are ultimately the ones writing up blogs and putting out videos clips that promote or discourage products. At the same time though, companies need to remember that managing partner relationships between various departments in the company's supply chain, as well as outside partners, also plays a large role in bringing greater value to customers.

5) These four steps lead up to the final step in the marketing process which is capturing value from customers. Although many companies look at how much a customer is worth today, it really goes much deeper than that. The customer lifetime value is the measure of all of the purchases from your company a customer will make over his life. So if a customer spends $50 a week in your store, shops there 40 weeks a year, and lives in that area for 10 years, his lifetime value to your store is $20,000. And this number doesn't include the amount of other customers that he has brought to the store. Therefore it is important to recognize how valuable each customer really is, especially when you're trying to keep them purchasing products from your company. The value that all of your customers combined bring to your company is total customer equity.
Every company should evaluate and classify its customers in order to know if investing in products for them is a wise idea. Each company should distinguish between customers that are profitable but no loyal, profitable and loyal, and between short-term customers and long-term customers. Doing this will help you reach your ultimate goal of capturing value from your customers by building the right relationships with the right customers.

Grand Opening!

Welcome to my Marketing Blog!
My goal in this blog is to write down my notes about Marketing. Most of these ideas come from the book Principles of Marketing, by Philip Kotler and Gary Armstrong. However, I am adding many of my own ideas and thoughts throughout the blog. Enjoy, follow, and please comment!