library / lib29c5a2f09c7fdaae
Principles of Marketing
Philip Kotler, Gary Armstrong · 2020
In a sentence
A comprehensive introduction to modern marketing centered on creating customer value and engagement in order to capture value from customers in return.
Principles of Marketing (18e Global Edition) by Kotler, Armstrong, and Opresnik is the foundational textbook that frames all of marketing around a single, powerful idea: marketing is the process of engaging customers and building profitable customer relationships by creating value for customers and capturing value in return. Through a clear five-step marketing process model, the book walks readers from understanding the marketplace and customer needs, to designing customer value-driven marketing strategies, to building integrated marketing programs, to managing customer relationships, and finally to capturing value as sales, profits, and customer equity. Richly illustrated with real-world brand stories—from Emirates and Rolex to Disney, Apple, and Airbnb—the text integrates the latest forces reshaping marketing: digital, mobile, and social media; big data and artificial intelligence; customer engagement marketing; globalization; and sustainability. It equips students and practitioners with both the conceptual frameworks and the practical, measurable tools needed to win in a fast-changing, increasingly digital marketplace.
The four lenses
- Science
- Statistics
- Systems
- Strategy
The model
A causal model expressing how understanding customers and deploying customer value-driven marketing strategy and an integrated marketing mix drive customer engagement, perceived value, satisfaction, and relationships, which in turn produce loyalty, share of customer, and ultimately customer equity and marketing ROI.
Customer and Marketplace Understandingdesign lever
The degree to which a firm researches and comprehends customer needs, wants, demands, and the marketplace environment as the foundational first step of the marketing process.
Customer Value-Driven Marketing Strategydesign lever
The firm's choices of which customers to serve (segmentation and targeting) and how to serve them (differentiation and positioning / value proposition) to create superior customer value.
Integrated Marketing Mix (4 Ps)design lever
The blend of product, price, place, and promotion tactical tools the firm deploys to deliver the intended value proposition and engage target customers in a coordinated program.
Digital, Mobile, and Social Media Engagement Toolsdesign lever
The use of online, mobile, social media, big data, and AI-based tools to engage customers directly, continuously, and interactively in shaping brand conversations, experiences, and community.
Customer Engagementpsychological state
The extent of direct and continuous customer involvement in shaping brand conversations, experiences, advocacy, and community, going beyond passive purchase to active participation.
Customer-Perceived Valuepsychological state
The customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers, judged subjectively rather than objectively.
Customer Satisfactionpsychological state
The degree to which a product's perceived performance matches or exceeds a buyer's expectations, ranging from dissatisfaction to satisfaction to delight.
Customer Relationships and Loyaltybehavioral pattern
The strength and durability of profitable bonds between the firm and its customers, including loyalty, retention, and brand advocacy built through superior value and satisfaction.
Share of Customeroutcome metric
The share a firm captures of a customer's purchasing within its product categories, increased through cross-selling, up-selling, and offering greater variety to existing customers.
Customer Equityoutcome metric
The total combined customer lifetime values of all of the company's current and potential customers, serving as a forward-looking measure of the firm's customer base value and performance.
Marketing Return on Investmentoutcome metric
The net return from a marketing investment divided by the costs of the marketing investment, measuring the profits and customer-centered returns generated by marketing activities.
How they connect
- customer understanding → predicts value driven strategy
- value driven strategy → predicts integrated marketing mix
- integrated marketing mix → influences customer engagement
- integrated marketing mix → influences customer perceived value
- digital social engagement tools → moderates customer engagement
- customer perceived value → predicts customer satisfaction
- customer engagement → predicts customer relationships
- customer satisfaction → predicts customer relationships
- customer relationships → predicts share of customer
- customer relationships → predicts customer equity
- share of customer → predicts customer equity
- customer equity → predicts marketing roi
A candidate measure
Principles of Marketing — derived measurement candidates
Customer and Marketplace Understanding
research investment; insight reports generated; data analytics maturity
self-report suitability: medium
Customer Value-Driven Marketing Strategy
segment definition clarity; positioning distinctiveness
self-report suitability: medium
Integrated Marketing Mix (4 Ps)
mix consistency score; campaign integration measures
self-report suitability: medium
Digital, Mobile, and Social Media Engagement Tools
platform reach; engagement rates; analytics adoption
self-report suitability: medium
Customer Engagement
interaction counts; UGC volume; community participation
self-report suitability: high
Customer-Perceived Value
perceived value ratings; price premium tolerance
self-report suitability: high
Customer Satisfaction
satisfaction scores; complaint rates
self-report suitability: high
Customer Relationships and Loyalty
retention rate; referral rate; tenure
self-report suitability: high
Share of Customer
wallet share percentage; cross-sell ratio
self-report suitability: low
Customer Equity
total CLV; customer equity trend
self-report suitability: none
Marketing Return on Investment
marketing ROI; net marketing contribution; marketing ROS
self-report suitability: none
The story
The reader A marketing student or practitioner who wants to understand and master how to create value for customers and build profitable customer relationships.
External problem
They need to learn how to attract, engage, and retain customers in a fast-changing, increasingly digital and competitive marketplace.
Internal problem
They feel overwhelmed by the complexity of marketing concepts, jargon, and the rapid pace of digital change.
Philosophical problem
Marketing should be about genuinely satisfying customer needs and creating value, not just manipulating people into buying things.
The plan
- Understand the marketplace and customer needs and wants.
- Design a customer value-driven marketing strategy by choosing target markets and a value proposition.
- Build an integrated marketing program (the 4 Ps) that delivers value.
- Engage customers and manage profitable customer relationships.
- Capture value from customers as sales, profits, and customer equity, while measuring marketing ROI.
Success
- The reader can design winning, customer value-driven marketing strategies.
- They build deep customer engagement, loyalty, and advocacy.
- They can measure and justify marketing investments and improve career employability skills.
At stake
- Falling into marketing myopia by focusing on products instead of customer needs.
- Wasting marketing dollars without measurable returns.
- Losing customers and competitive position in a fast-changing digital marketplace.
Related in the library