Understanding Marketing: Customer Value, Orientation, and Strategy

Posted on Mar 4, 2025 in Business Administration and Management (BAM)

The Nature of Marketing

Marketing: The achievement of corporate goals through meeting and exceeding customer needs better than the competition, or the delivery of value to customers at a profit.

Three conditions must be met before the marketing concept can be applied:

  1. Company activities should be focused on providing customer satisfaction rather than, for example, simply producing products.
  2. The achievement of customer satisfaction relies on integrated effort.
  3. For integrated effort to come about, management must believe that corporate goals can be achieved through satisfied customers.

Customer Value

Customer value is key to building a successful business.

Formula: Perceived benefits – Perceived sacrifice.

Four Forms of Customer Value:

  • Price Value: One of the most powerful customer motivations to purchase is because a product is perceived as being cheaper than those offered by competitors. Basic products at low prices.
  • Performance Value: In the same way that some customers have a preference for low price, others are more concerned about product performance. They are attracted to products by their functionality and perceived quality levels. Be consistently innovative.
  • Emotional Value: Find effective ways to differentiate products based on performance elements. The mind of the consumer is what is known as emotional value. It is created through marketing activity and explains why some consumers will pay huge premiums for luxury brands.
  • Relational Value: Another important motive to purchase is the quality of service received by the customer. The notion of the lifetime value of a customer is recognition by the company of the potential sales, profits, and endorsements that come from a repeat customer who stays with the company for several years.

Business Orientation

  • Production Orientation: Production capabilities → Manufacture product → Customers.
  • Sales Orientation: Products and services → Aggressive sales effort → Customers.
  • Customer Orientation: Customer needs → Potential market opportunities → Marketing products and services → Customers.

Marketing Planning

a) Where are we now? b) Where would we like to be? c) How do we get there?

Market Orientation:

  • Know customers’ choice criteria.
  • Invest in market research.
  • Marketing spend is an investment.
  • Are fast and flexible to pursue new opportunities.

Internal Orientation:

  • Price and product performance are key to most sales.
  • Rely on anecdote and received wisdom.
  • Marketing spend is a luxury.

Business Mission and Strategy

There is no right or wrong business mission in abstract. The mission should be based on the vision that top management and their subordinates have of the future of the business.

Four Generic Strategies:

  • Differentiation
  • Cost Leadership (These seek competitive advantage in a broad range of market or industry segments.)
  • Differentiation Focus
  • Cost Focus (These are confined to a narrow segment.)

Marketing Audit

A marketing audit is a systematic examination of a firm’s marketing environment, objectives, strategies, and activities, which aims to identify key strategic issues, problem areas, and opportunities.

One concise way of presenting the outcomes of a marketing audit is through a summary of a SWOT analysis.