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Fundamental Principles of Marketing

Essay by   •  October 25, 2017  •  Course Note  •  514 Words (3 Pages)  •  1,045 Views

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Objective of a Business

Profit Maximization

- Long Term

- Across the entire portfolio of products/services that the firm sells

Firm Value

- The more the business succeeds in achieving its objective, the greater will be its firm value.

Fundamental Principles of Marketing

1. We don’t see products in terms of their attributes, but as solutions for delivering customer value

2. Competing products are those that satisfy the same needs as our product. E.g., Drill, Macbook, Coke

3. Since consumers will purchase the product that gives them the highest perceived value,

- my firm should first know the value drivers of consumers, and competitors who are satisfying those value drivers;

- come up with a product/service that satisfies value drivers of consumers better than the competitors

Marketing myopia

Tactical decisions do marketers make to deliver customer value?(4 Ps of Marketing)

1. Product Decisions

- What should be the attributes of the product/service that deliver value?

2. Pricing Decisions

- What should be the price of the product/service?

3. Place/Distribution Channel Decisions

- The contact point between customers and the product

- How should I sell the product: through the internet, retailers, your own sales force, etc.

4. Promotion/Communication Decisions

Environmental Analysis is required to formulate the Background Marketing Strategy?(3Cs of marketing)

1. Understanding the Customers’ Needs (different sensitivities, group into segments, size & growth rate)

2. Understanding the Competitive Scenario (market share)

3. Understanding your Company’s Strengths and Weaknesses (which value drivers can we match as much or better than competitors)

4.

STP - Segmentation

Why?

1. Consumers differ in their sentitivities to the value drivers(fundamental criterion). Values drivers may even be contradictory across segments.

2. Company's core and contraints - unable to satify all customers

3. Competitors have products that satify specific groups of customers. It's hard to come up with one product that provides value to all customers better than my segment-specific competitors.

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