01 marketing creatingandcapturingcustomervalue

8/17/2019 01 Marketing Creatingandcapturingcustomervalue

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Marketing: Creating and

Capturing Customer Value

Prof. Alexander Chan Trajano

1Principles of MarketingMARPR!


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"hat !s Marketing#

• Marketing is the process $% &hich companiescreate 'alue for customers and $uild strongcustomer relationships in order to capture

'alue from customers in return• Marketing is a social and managerial process

$% &hich indi'iduals and organi(ations o$tain&hat the% need and &ant through creating

and exchanging 'alue &ith others• Marketing is managing pro)ta$le customer

relationships

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T&o+,old -oal of Marketing

• Attract ne& customers $% promisingsuperior 'alue telling and selling/

• eep and gro& current customers $%deli'ering satisfaction satisf%ingcustomer needs/



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ome 2xamples

• "almart 3 4a'e mone%. 5i'e$etter.6

• 7intendo 3 4"ii &ould like to pla%.6

• Mc8onald9s 3 4!9m lo'in9 it6

Principles of MarketingMARPR!


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ound Marketing

• ,or pro)t )rms

• ,or non+pro)t organi(ations likecolleges; hospitals; museums;s%mphon% orchestras; churches; etc.


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"here 8o "e ee Marketing At

"ork#

• hopping malls

• Ad'ertisements on TV; radio; print

•

Maga(ines• Mail$ox

• "e$ sites and online social net&orks

•

Cell phone

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The Marketing Process

>nderstand the

marketplace and

customerneeds and

&ants

8esign acustomer+

dri'enmarketingstrateg%

Construct

anintegratedmarketingprogram

thatdeli'erssuperior

'alue

?uildpro)ta$lerelationshi

ps andcreate

customerdelight

Capture'alue fromcustomersto create

pro)ts andcustomer

e@uit%

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>nderstanding the Marketplaceand Customer 7eeds

• ,i'e core customer and marketplaceconcepts:

a. 7eeds; &ants; and demands

$. Market oBerings products; ser'ices;and experiences/

c. Value and satisfaction

d. 2xchanges and relationships; and

e. Markets



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Customer 7eeds; "ants; and

8emands

• Needs are states of felt depri'ation

• Duman needs include $asic physical needs for food; clothing; &armth; andsafet%E social needs for $elongingand aBectionE and individual needsfor kno&ledge and self expression

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8emands

• Wants are the form human needstake as the% are shaped $% cultureand indi'idual personalit%

• A ,ilipino needs food $ut wantsChicken Go%

• "ants are shaped $% one9s societ%and are descri$ed in terms of o$jectsthat &ill satisf% those needs

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8emands

• Demands are human &ants that are$acked $% $u%ing po&er

• -i'en people9s &ants and resources;the% demand products &ith $ene)tsthat add up to most 'alue andsatisfaction



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>sing and no&ing Customer 7eeds;"ants; and 8emands

• Iutstanding marketing companies go togreat lengths to learn a$out andunderstand their customers9 needs; &ants;

and demands• The% conduct consumer research and

anal%(e mountains of customer data

• Their people at all le'els 3 including topmanagement 3 sta% close to customersusing social media: T&itter; ,ace$ook;!nstagram; etc./

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Market IBerings 3Products; er'ices; and 2xperiences

• Market oferings are somecom$ination of products; ser'ices;information; or experiences oBered

to a market to satisf% a need or &ant

• Market oBerings also include otherentities; such as persons; places;

organi(ations; information; and ideas



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Marketing M%opia

• Marketing myopia is the mistake of pa%ing moreattention to the speci)c products a compan% oBersthan to the $ene)ts and experiences produced $%these products

• ome companies focus onl% on existing &ants andlose sight of underl%ing customer needs. The%forget that a product is onl% a tool to sol'e aconsumer pro$lem

• ellers &ill ha'e trou$le if a ne& product comesalong that ser'es the customer9s need $etter orless expensi'el%. The customer &ill ha'e the sameneed $ut &ill &ant the ne& product



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Marketing M%opia

• mart marketers look $e%ond theattri$utes of the products andser'ices the% sell

• ?% orchestrating se'eral ser'ices andproducts; the% create brandexperiences for consumers

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Customer Value andatisfaction

• Consumers usuall% face a $road arra% of productsand ser'ices that might satisf% a gi'en need

• Do& do the% choose among these man% marketoBerings#

• Customers form expectations a$out the valueand satisaction that 'arious marketoferings &ill deli'er and $u% accordingl%

• atis)ed customers $u% again and tell others

a$out their good experiences. 8issatis)edcustomers often s&itch to competitors anddisparage the product to others cont9d/

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• Marketers must $e careful to set the rightle'el of expectations

• !f the% set expectations too lo&; the% ma%

satisf% those &ho $u% $ut fail to attractenough $u%ers. !f the% set expectationstoo high; $u%ers &ill $e disappointed

•

Customer 'alue and customer satisfactionare ke% $uilding $locks for de'eloping andmanaging customer relationships



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2xchanges andRelationships

• Marketing occurs &hen people decide to satisf%needs and &ants through exchange relationships

• Exchange is the act of o$taining a desired o$jectfrom someone $% oBering something in return

• The marketer tries to $ring a$out a response tosome market oBering. The response ma% $emore than simpl% $u%ing or trading products andser'ices

• A politician &ants 'otesE a church &antsmem$ershipE an orchestra &ants an audienceE asocial action group &ants idea acceptancecont9d/



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2xchanges andRelationships

• Marketing consists of actions taken to $uild andmaintain desira$le exchange relationships &ith target audiences in'ol'ing a product;ser'ice; idea; or other o$ject

• ?e%ond simpl% attracting ne& customers andcreating transactions; companies &ant to retaincustomers and gro& their $usinesses

•

Marketers &ant to $uild strong relationships $%consistentl% deli'ering superior customer 'alue

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Markets

• A market is the set of actual and potential $u%ersof a product or ser'ice

• These $u%ers share a particular need or &ant thatcan $e satis)ed through exchange relationships

• Marketing means managing markets to $ring a$outpro)ta$le customer relationships 3 sellers mustsearch for $u%ers; identif% their needs; design goodmarket oBering; set prices for them; promote them;and store and deli'er them

• Acti'ities such as consumer research; productde'elopment; communication; distri$ution; pricing;and ser'ice are core marketing acti'ities cont9d/

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Markets

• ?u%ers also carr% out marketing. Consumers market&hen the% search for products; interact &ith companiesto o$tain information; and make their purchases

• Toda%; digital technolog% ha'e empo&ered consumersand made marketing a trul% interacti'e aBair

• !n addition to customer relationship management;toda%9s marketers must also deal eBecti'el% &ithcustomer+managed relationships

• Marketers are no longer asking onl%; 4Do& can &e

reach our customers#6 $ut also 4Do& should ourcustomers reach us#6 and e'en 4Do& can ourcustomers reach each other#6

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8esigning A Customer+8ri'en

Marketing trateg%

• Marketing Management is the art and science ofchoosing target markets and $uilding pro)ta$lerelationships &ith them

• The marketing manager9s aim is to )nd; attract;

keep; and gro& target customers $% creating;deli'ering; and communicating superior customer

'alue

• To design a &inning marketing strateg%; the

marketing manager must ans&er t&o important@uestions: 4"hat customers &ill &e ser'e &hat9sour target market/#6 and 4Do& can &e ser'e thesecustomers $est &hat9s our 'alue proposition/#6

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electing Customers Toer'e

•

Market segmentation is di'iding the market intosegments of customers

• Target marketing is selecting &hich segments it &ill goafter

• Marketing managers kno& that the% cannot ser'e all

customers in e'er% &a%; if the% tr% this; the% ma% not ser'ean% customers &ell

• The compan% must select onl% customers that it can ser'e&ell and pro)ta$l%

• >ltimatel%; marketing managers must decide &hich

customers the% &ant to target on le'el; timing; and natureof their demand. Marketing management is customermanagement and dem

• and management

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Choosing A ValueProposition

• The compan% must also decide ho& it &ill ser'etargeted customers 3 ho& it &ill diferentiate and

position itself in the marketplace

• A $rand9s value proposition is the set of $ene)ts or

'alues it promises to deli'er to consumers to satisf%their needs

• uch 'alue propositions diBerentiate one $rand fromanother

• The% ans&er the customer9s @uestion; 4"h% should !

$u% %our $rand rather than a competitor9s#6

• Companies must design strong 'alue propositionsthat gi'e them the greatest ad'antage in their targetmarkets



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Marketing Management Irientations

• Marketing management &ants to design strategiesthat &ill $uild pro)ta$le relationships &ith targetconsumers

• ?ut &hat philosoph% should guide these marketing

strategies# "hat &eight should $e gi'en to theinterests of customers; the organi(ation; andsociet%#

• There are )'e alternati'e concepts under &hich

organi(ations design and carr% out their marketingstrategies: the production; product ; selling;marketing; and societal marketing concepts

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The Production Concept

• The production concept holds thatconsumers &ill fa'or products thatare a'aila$le and highl% aBorda$le

and that the organi(ation shouldtherefore focus on impro'ingproduction and distri$ution eJcienc%

• This concept is one of the oldestorientations that guide sellers

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The Product Concept

• The product concept holds that consumers &illfa'or products that oBer the most in @ualit%;performance; and inno'ati'e features and that theorgani(ation should therefore de'ote its energ% to

making continuous product impro'ements• This concept is important up to the point that it

should pre'ent the compan% from experiencingmarketing myopia

• "hile consumers &ant manufacturers to $uild a$etter mousetrap; the% might $e looking for a$etter solution to a mouse pro$lem



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The elling Concept

• The selling concept is the idea thatconsumers &ill not $u% enough of the )rm9sproduct unless it undertakes a large+scale

selling and promotion eBort• The selling concept is t%picall% practiced &ith

unsought goods 3 those that $u%ers do notnormall% think of $u%ing; such as insurance

or $lood donations. These industries must$e good at tracking do&n prospects andselling them on a product9s $ene)ts cont9d/



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The elling Concept

• uch aggressi'e selling carries high risks. !tfocuses on creating sales transactions ratherthan on $uilding long+term; pro)ta$le; customerrelationships

• The aim often is to sell &hat the compan%makes rather than making &hat the market&ants

• !t assumes that customers &ho are coaxed into$u%ing the product &ill like it

• Ir; it the% don9t like it; the% &ill possi$l% forgettheir disappointment and $u% it again later

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The Marketing Concept•

The marketing concept is a philosoph% thatholds that achie'ing organi(ational goals dependson kno&ing the needs and &ants of target marketsand deli'ering the desired satisfactions $etter thancompetitors do

• Customer focus and 'alue are the paths to salesand pro)ts

• !nstead of a product+centered 4make and sell6philosoph%; the marketing concept is a customer+

centered 4sense and respond6 philosoph%

• The jo$ is not to )nd the right customers for %ourproduct $ut to )nd the right products for %ourcustomers

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elling and Marketing

Concepts Contrasted

The SellingConcept

(Inside-Out View)

The MarketingConcept

(Outside-In View)

tartingPoint

,actor% Market

,ocus 2xisting products Customer needssatis)ed/

Means elling andpromoting

!ntegrated marketing

2nds Pro)ts through sales'olume

Pro)ts through customersatisfaction

Tr%ing to do ell &hat the

compan% makesrather than &hat the

4"e do not ha'e a

marketing department;&e ha'e a customer01Principles of Marketing

MARPR!


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The Marketing Concept

• The marketing concept starts &ith a &ell+de)ned market;focuses on customer needs; and integrates all themarketing acti'ities that aBect customers

• !n turn; it %ields pro)ts $% creating lasting relationships&ith the right customers $ased on customer 'alue and

satisfaction• ustomer!driven companies research current customers

deepl% to learn a$out their desires; gather ne& product andser'ice ideas; and test proposed product impro'ements

• ustomer!driving marketing is understanding customer

needs e'en $etter than customers themsel'es do sincesome times customers don9t kno& &hat the% &ant/ andcreating products and ser'ices that meet existing andlatent needs; no& and in the future

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The ocietal MarketingConcept

• The societal marketing concept is the idea thata compan%9s marketing decisions should considerconsumers9 &ants; the compan%9s re@uirements;consumers9 long+run interests; and societ%9s long+

run interests• !t calls for sustainable marketing; sociall%; and

en'ironmentall% responsi$le marketing that meetsthe present needs of consumers and $usinesses

&hile also preser'ing or enhancing the a$ilit% offuture generations to meet their needs

• ?ottled &ater + plastic $ottles use car$on dioxideand rec%cling



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ocietal Marketing Concept

ociet%

Duman "elfare/

Consumers

"antatisfaction/

Compan%

Pro)ts/


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Preparing An !ntegrated

Marketing Plan and Program

• The compan%9s customer+dri'enmarketing strateg% outlines &hichcustomers it &ill ser'e the target

market/ and ho& it &ill create 'alue'alue proposition/ for these customers

• 7ext; the marketer de'elops an

integrated marketing programmarketing mix/ that &ill actuall% deli'erthe intended 'alue to target customers


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?uilding CustomerRelationships

• ustomer relationshipmanagement is the o'erall processof $uilding and maintaining pro)ta$le

customer relationships $% deli'eringsuperior customer 'alue andsatisfaction


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• ustomer!perceived value is thecustomer9s e'aluation of the diBerence$et&een all the $ene)ts and all the costs

of a marketing oBer relati'e to those ofcompeting oBers some customers are&illing to pa% more and some are not/

• ustomer satisaction is the extent to

&hich a product9s percei'ed performancematches a $u%er9s expectations fall short;matches; exceeds expectations/


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Customer Relationship

5e'els and Tools

• A compan% &ith man% lo&+margin customersma% seek to de'elop basic relationships &iththem

• A compan% &ith fe& customers and highmargins create ull partnerships &ith them

• Companies can oBer re"uency marketing programs that re&ard customers &ho $u%fre@uentl% or in large amounts

• Companies can sponsor club marketing programs that oBer mem$ers special $ene)tsand create mem$er communities


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The Changing 7ature of

Customer Relationships

• #elating with More areully $electedustomers

- ?% asking @uestions to screen if the customer isa potential pro)ta$le one

- ?% 4)ring6 customers that cost more to ser'ethan to lose

- 7ot all customers are &orth %our marketing

eBorts. ome are more costl% to ser'e than tolose. !f %ou can9t sa% &ho %our customersaren%t ; %ou pro$a$l% can9t sa% &ho %ourcustomers are


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• #elating More Deeply and &nteractively

- T&o+&a% customer relationships $% emplo%ingne& technologies e+mail; &e$ sites; $logs; cellphones; and 'ideo/

- This changing communications en'ironmentalso aBects ho& companies and $rands relate tocustomers $% letting markers create deepercustomer in'ol'ement and a sense ofcommunit% surrounding a $rand 3 to make the$rand a meaningful part of consumers9con'ersations and li'es cont9d/


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• #elating More Deeply and &nteractively

- ustomer!managed relationships aremarketing relationships in &hich customers;empo&ered $% toda%9s digital technologies;

interact &ith companies and &ith each other toshape their relationships &ith $rands

- onsumer!generated marketing are the $randexchanges created $% consumers themsel'es 3

$oth in'ited and unin'ited 3 $% &hich consumersare pla%ing an increasing role in shaping their o&n$rand experiences and those of other consumers


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Partnership Relationship

Management

• 'artnership relationshipmanagement is &orking closel% &ithpartners in other compan%

departments and outside thecompan% to jointl% $ring greater 'alueto customer

-

Partners inside the compan%- Marketing partners outside the )rm

suppl% chain/

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Capturing Value ,romCustomers

• reating ustomer (oyalty and#etention

- ustomer lietime value is the'alue of the entire stream ofpurchases that the customer &ouldmake o'er a lifetime of patronage

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• )rowing $hare o ustomer

- $hare o customer is the portion ofthe customer9s purchasing that a

compan% gets in its productcategories


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• *uilding ustomer E"uity

- ustomer E"uity is the totalcom$ined customer lifetime 'alues of

all of the compan%9s customers

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• *uilding the #ight #elationships withthe #ight ustomers

1. trangers + sho& lo& potential

pro)ta$ilit% and little projected lo%alt%*. ?utterKies + are potentiall% pro)ta$le $ut

not lo%al

0. True friends + are $oth pro)ta$le and lo%al

. ?arnacles + are highl% lo%al $ut not 'er%pro)ta$le

Principles of MarketingMARPR! =

Th Ch i M k ti


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The Changing Marketing5andscape

• The >ncertain 2conomic 2n'ironment

• The 8igital Age !nternet/

• Rapid -lo$ali(ation

• ustaina$le MarketingLThe Call forMore ocial Responsi$ilit%

• The -ro&th of 7ot+for+Pro)tMarketing

01 marketing creatingandcapturingcustomervalue

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