Principles of Marketing
Introduction
The two problems
1. Marketing = advertising
2. Marketing = evil
Marketing
Marketing equation
DO
YOU
HAVE
A
COW
AT
HOME
?
We don't have to
have a cow in the
kitchen if we want
milk, because
someone else in
the company keeps
the cows, someone
else processes the
milk and someone
else distributes it
to the shops. So,
someone has to
think about our
need and then
facilitate strategy
and develop
product, price,
distribution and
communication.
Through
marketing there
are products in
society that bring
us value.
Human decision making
Emotion and Reason
Do you make decisions more emotionally or rationally?
Decision making process
Decision making process
• The human brain is the result of millions of years of
evolution. We have hard-coded instincts that helped our
ancestors survive in small groups of hunters and gatherers.
• Our brains often make snap judgments without much
thought - it's the only way we've been able to avoid imminent
danger.
• If we scrutinized every piece of information, analyzed every
decision rationally, we could not function normally in life.
What is the purpose of the limbic
system?
• It shapes emotions,
behaviour and memory
• Activates fight or flight
mode:
• tiger -> fear -> escape ->
survival -> genes
• Facilitates buying decisions
• Two systems:
• System 1: instinctive, emotional,
subconscious
• System 2: slower, rational,
conscious
• Our lives are dominated by
System 1
• System 2 is slow but very good
at some important things like
learning and planning.
Instinct vs Reason
Marketing
WHAT IS AND WHAT IS NOT
MARKETING?
• Marketing is not advertising or promotion, these
are only its sub-functions.
• The job of marketing is not only to find smarter
ways to sell products.
• Marketing is not the art of selling what to produce,
but of knowing what to produce.
• It is the process of identifying and understanding
customer needs and creating solutions that provide
customer satisfaction.
What does a customer-oriented company actually do?
1. It regularly finds out what the customer's
needs and wishes are.
2. It is clear about the value it brings to the
customer with its product.
3. It delivers on what it promises.
4. Is interested in how satisfied the customer is
with the product and service.
5. Knows how to communicate value.
Marketing is the process of delivering value at a profit
What is value?
Benefits - costs = customer value
18,90,- Kč
18,90,- Kč
Value types
• Expected value
• Perceived value
• The difference between the expected value
and the perceived value determines
customer satisfaction.
Value types
• Expected value refers to the benefits or value a customer
believes they will receive from a product or service before
they make a purchase.
• Perceived value is the value that customers believe they
actually received after experiencing a product or service. It is
subjective and varies from one person to another, based on
their individual experience.
• The difference between the expected value and the perceived
value determines customer satisfaction.
Value types
• Expected value is shaped by several factors, including:
• Marketing communication: Ads, promotions, and product
descriptions set an expectation of quality, performance, or
benefits.
• Brand reputation: A well-known brand often leads customers
to expect higher value.
• Word of mouth: Recommendations or reviews from other
customers influence expectations.
• Previous experiences: If a customer has had a good
experience with a brand, they may expect the same or better
value in future purchases.
Value types
• Perceived value is influenced by:
• Product performance: How well the product meets the
customer’s needs.
• Customer service: The quality of support and service provided
by the company.
• Price paid: Whether the customer feels the product or service
was worth the cost.
• Brand and emotional connection: Positive experiences with a
brand can enhance perceived value, even if the actual product
quality is the same as competitors.
How does a satisfied customer behave?
What is need?
Which level of Maslow's pyramid of needs is common in Apple products?
„You can either find out what people want and work
out the clever way of delivering it. Or you can work
out what you can deliver and find the clever way of
making people want it.“
Rory Sutherland
Recap
• We know what marketing is and isn't
• We know how people make decisions
• We know what value is
• We know what is needed
Thank you for your attention