MSMK7001 Chap.1 Marketing, Customer Value and Relationships
Marketing, Customer Value and Relationships
Value goes out before profit comes back
The course starts by setting aside the idea that marketing means advertising. It is defined as the strategies and activities through which a company acquires and engages customers, builds strong relationships and creates superior value for them, so that it can capture value in return.
The order in that sentence is the lesson: the firm earns its return because of the value it delivered, not instead of it.
This framing sits under every chapter that follows and under both pieces of written and presented work.
Three words that size a market
A need is a state of felt deprivation, a want is the shape a need takes once culture and personality have worked on it, and a demand is a want with buying power behind it.
Getting these apart matters when a plan estimates how many people will buy, because a large need does not guarantee a large demand.
Marketing management is then defined as choosing target markets and growing profitable relationships inside them, which reduces to two decisions: whom to serve, and with what value proposition.
Five ways a company can think about its customers
The production, product, selling, marketing and societal marketing concepts each make a different assumption about what buyers want.
The chapter sets the selling concept, which begins at the factory and pushes existing products, against the marketing concept, which begins with a defined market and profits through lasting satisfaction.
It also separates customer-driven marketing, useful when buyers know what they want, from customer-driving marketing, needed when they do not.
Myopia, told through three stories
Marketing myopia is attending to the product a company sells rather than the benefit it produces.
The lecture's stories cover a film maker that did not see an electronics firm as a rival, a reformulated drink that won taste tests and lost its loyal drinkers, and a smoke-free cigarette nobody wanted. The chapter closes on relationships: perceived value and satisfaction as building blocks, lifetime value and customer equity as measures, and a map of four customer groups that separates loyalty from profitability.
What this chapter covers
- 01
Marketing as a two-way exchange of value
- 02
Needs, wants and demands
- 03
The five marketing management philosophies
- 04
Selling concept against marketing concept
- 05
Customer-driven and customer-driving marketing
- 06
Marketing myopia in three cases
- 07
Perceived value, satisfaction and lifetime value
- 08
Four customer relationship groups
Worked example · free
Diagnose a manager's philosophy and its blind spot
- 2Name the management philosophy the statement reveals.
- 2Identify the myopic assumption about what the customer buys.
- 2Propose one change grounded in customer value.
Key terms
- Marketing Myopia
- The error of focusing on the particular products a firm sells while overlooking the benefits and experiences customers actually get from them.
- Value Proposition
- The package of benefits a brand promises its customers in return for their custom, and the answer to why a customer should choose it.
- Customer Perceived Value
- What a buyer judges an offer to be worth once its costs are set against its benefits, compared with rival offers.
- Customer Lifetime Value
- The total a single customer is expected to spend with a company across the whole period they remain a customer.
- Customer Equity
- The combined lifetime values of all of a company's customers, used as a measure of the strength of its customer base.
- Societal Marketing Concept
- A philosophy holding that a firm should meet its target markets' wants while asking whether doing so also serves buyers and society over the long term.
Marketing, Customer Value and Relationships FAQ
What is the difference between the selling concept and the marketing concept?
The selling concept works inside-out: it starts with the factory and existing products and relies on heavy promotion to win short-term sales, with little interest in who buys or why. The marketing concept works outside-in: it starts with a defined market and customer needs, coordinates every activity affecting customers, and earns profit through lasting satisfaction.
Why does a product that wins taste tests still fail?
Because the test measured one attribute while customers were buying something broader. In the lecture's drink example the new formula won blind comparisons, yet loyal drinkers valued their attachment to the original. The failure was myopic: the company optimized the product it could measure and ignored the benefit people actually paid for.
Is every loyal customer worth keeping?
Not at any cost. The course maps customers on two separate axes, projected loyalty and potential profitability. A loyal customer who buys little is a barnacle, while a profitable one who will not stay is a butterfly. Retention spending should follow lifetime value, which means some loyal customers need a different offer rather than a bigger reward.
Assessment move
Take three companies you bought from this month and write one sentence for each saying which of the five philosophies their advertising reveals. Then rewrite one product-centered slogan so that it names the customer's benefit instead. The exercise trains the move the case report rewards, which is diagnosing a firm's thinking from its own words.
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