The essence of marketing is the creation, delivery, and capturing of value in order to bring about exchange. Exchange of course occurs when two or more parties receive something of value from each other in a transaction. Thus, once a (community) has been created or identified the marketing manager’s job then requires an in depth understanding of value and the core concepts which underlie exchange.Value is the difference between the contribution a product or service makes to consumer’s array of needs and the total extraction from consumer’s resources required by that product or service.There are six core concepts that underlie exchange : needs, wants, and demands (acquisition activities); and satisfaction, loyalty, and relationships (retention activities).The process of creating exchange (and ultimately profitable growth) begins with the needs of the targeted (community) being identified and steps taken to get individuals to express those needs as certain wants and to enable individuals that have the desire to satisfy that want to have the ability, thus making it a demand (a group a people with a demand for a product or service is a market).MKT 327: CLASS FOUR“CORE CONCEPTS”Theme: The History of FunkPre-Class Tasks:1. Read Chapter 1 LO & LO2. Complete Quiz3 on ConnectLearning Objectives:1. Fundamentals of Market Growth2. Core Concepts of Exchange: Part Onea. Need: b. Wants c. Demand3. Core Concepts of Exchange: Part Twoa. Loyaltyb. Satisfactionc. Relationships4. Concepts of Value Creation & Market UtilitiesKey Terms:Create a market Group of people with a demand& acquires customers:1. Need: Physical and /or psychological requirementfor survival2. Want: Expressed or desired form of consumption in order to satisfy a need3. Demand: Having ability & desire to address a want to satisfy a needMaintains a Market group of people with a demand and retains costumers:4. Loyalty: Purchase insistence & frenquency5. Satisfaction: Rating of Usage experience6. Relationship: Mutual interactive connection of lives or lifestyles7. Basic Economic UtilitiesThe essence of marketing is the creation, delivery, and capturing of value in order to bring about exchange. Exchange of course occurs when two or more parties receive something of value from each other in a transaction. Thus, once a (community) has been created or identified the marketing manager’s job then requires an in depth understanding of value and the core concepts which underlie exchange.What the firm ‘values’ from transactions is profitable growth. This occurs when new customers acquired at a significantly higher rate than existing customers are lost.Value is the difference between the contribution a product or service makes to consumer’s array of needs and the total extraction from consumer’s resources required by that product or service.Value is created by using the marketing mix variables to provide one or more of the economic utilities: form, time, place, and ownership or possession.There are six core concepts that underlie exchange : needs, wants, and demands (acquisitionactivities); and satisfaction, loyalty, and relationships (retention activities).The process of creating exchange (and ultimately profitable growth) begins with the needs of the targeted (community) being identified and steps taken to get individuals to express those needs as certain wants and to enable individuals that have the desire to satisfy that want to have the ability, thus making it a demand (a group a people with ademand for a product or service is a market).a. Form utility b. Place utilityc. Time utility d. Possession {Ownership}utility8. Customer Value9. Exchange10. MarketMarketspace11. Marketing Mixa. Promotion (Communication) b. Pricec. Place (Distribution) d. Producta. Efficiency b. Effectiveness1. A firm achieves growth by having its _____________ rate be significantly higher than its ______________ rate (the opposite of retention rate).2. Marketers must identify its targeted community’s _______, then through the effective execution of its marketing mix get potential customers to express those needs as ________ Once a customer has been acquired (needs identified and turned into wants, and wants addressed to become a demand) attention then turns to retention (satisfaction, loyalty, and relationships). Retention activities begin when demand is fulfilled. At this point marketers must address perhaps the most critical and most important component.SATISFACTION. Satisfaction is the extent to which a product or service addresses customer’s needs (not wants), or the extent the customer’s goals and objectives for using the product or service. A person’s level of satisfaction reflects the difference between their performance expectations and the performance experienced. Satisfaction is such a challenge for marketers because it is often effective by factors outside themarketer’s control. When satisfaction is provided consistently over anumber of exchanges loyalty develops and eventually a relationship is established. A relationship exists when Product Takes On a ‘Persona, Product Becomes Part of Person’s Lifestyle; Product is part of conscious scenery ofsome image or nostalgic memory; Product is partof a tradition; and Product is customized to tastethat those customers have the _________ and the __________ to address, thus creating a demand.3. ___________ are transformed into ___________ by successfully using the marketing mix variables to provide time, _________, ___________, and ownership utilities and as a result create _____________.Core marketing Concepts(COMMUNICATIONS)A. value- consumer 1. needs meet2. costs low- firms1. growths2. profitsNO funk(1950), NO fade(1960), NO fear(1970’s)- Gust lecturer speak:Don’t judge get the money, give satisfactions. Part two:Definition of a Relationship or relational ExchangeA product has a RELATIONSHIP with a consumer when:- Product takes on a “person”- Product becomes part of person’s lifestyle- Product is part of conscious scenery of some image or nostalgic memory- Product is part of a tradition- Product is customized to taste- Exchanges is relational1.The essence of marketing is to form community, connections and relationships. In order to create, deliver and capture value and bring about exchange.2.Marketing performs their essential tasks in 3 domains.3.In the second domain marketing connects sectors