chapter 1 creating and capturing customer value

5/21/2018 Chapter 1 Creating and Capturing Customer Value

1/41Chapter 1- slide 1Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

Chapter One

Marketing: Creating and Capturing

Customer Value




Creating and Capturing CustomerValue

What Is Marketing?

Understand the Marketplace and Customer Needs

Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program

Building Customer Relationships

Capturing Value from Customers

The Changing Marketing Landscape

Topic Outline




What Is Marketing?

Marketing is a process by which companies create

value for customers and build strong customer

relationships to capture value

from customers inReturn.

Marketingis about managing

profitable customer relationships

Attracting new customers.

Retaining and growing current

customers.




What Is Marketing?

The Marketing Process




Step 1: Understanding the Marketplaceand Customer Needs

Customer needs, wants, and demands

Market offerings

Value and satisfaction

Exchanges and relationships

Markets

Core Concepts


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Copyright 2010 Pearson Education, Inc.


Step 1: Understanding the Marketplaceand Customer Needs

States of deprivation

Physicalfood, clothing, warmth, safety

Socialbelonging and affection

Individualknowledge and self-expression

Needs

Form that needs take as they are shaped by cultureand individual personalityWants

Wants backed by buying power

Willingness and desire to buy.Demands

Customer Needs, Wants, and Demands





Step 1: Understanding the Marketplace

and Customer Needs

Market offerings are somecombination of products,services, information, or

experiences offered to amarket to satisfy a need orwant

Marketing myopia isfocusing only on existing

wants and losing sight ofunderlying consumerneeds





Customer Value and Satisfaction

Expectations

Customers

Value andsatisfaction

Marketers

Set the right level ofexpectations

Not too high or low


and Customer Needs
http://www.zappos.com/





Value

Customers form expectations regarding value

Marketers must deliver value to consumers

Satisfaction

A satisfied customer will buy again and tell others about their

good experience

Exchange The act of obtaining a desired object from someone by offering

something in return

One exchange is not the goal, relationships with several

exchanges are the goal

Relationships are built through delivering value and satisfaction


and Customer Needs





Markets are the set of actual and potential

buyers of a product . Marketers seek

buyers that are profitable.


and Customer Needs

Figure: Modern Marketing System


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Chapter 1- slide 11Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall

Step 2: Designing a Customer-

Driven Marketing StrategyMarketing management is the art and

science of choosing target markets and

building profitable relationships with them What customers will we serve?

How can we best serve these customers?


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Step 2: Designing a Customer-Driven Marketing Strategy

Market segmentation refers to dividing the

markets into segments of customers

Target marketing refers to which segments

to go after

Selecting Customers to Serve
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Demand Management is the process offinding and increasing demand, also

changing or reducing demand.

Demarketing is marketing to reduce demand

temporarily or permanently; the aim is notto destroy demand but to reduce or shift it

Selecting Customers to Serve


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Choosing a Value Proposition

The value proposition is the set of

benefits or values a company promises todeliver to customers to satisfy their needs


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Productionconcept

Productconcept

Sellingconcept

Marketingconcept

Societalconcept

Marketing Management Orientations or Philosophies


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Production concept is the idea that

consumers will favor products that areavailable or highly affordable.

Marketing Management Orientations


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Product concept is the idea that consumers

will favor products that offer the mostquality, performance, and features.

Organization should therefore devote its

energy to making continuous productimprovements.



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Selling concept is the idea that consumers

will not buy enough of the firms productsunless it undertakes a large scale selling

and promotion effort.



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Marketing concept is the

idea that achieving

organizational goals

depends on knowing the

needs and wants of the

target markets anddelivering the desired

satisfactions better than

competitors do


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Marketing & Sales

Concepts Contrasted

FactoryExisting

Products

Selling

and

Promoting

Profits

through

Volume

MarketCustomer

NeedsIntegratedMarketing

Profitsthrough

Satisfaction

The Selling Concept

The Marketing Concept

StartingPoint

Focus Means Ends


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Societal marketing concept

is the idea that a company

should make good marketingdecisions by considering

consumers wants, the

companys requirements,

consumers long-terminterests, and societys long-

run interests


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Step 2: Designing a Customer-

Driven Marketing Strategy


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The marketing mix is the set of tools (four Ps)

the firm uses to implement its marketing

strategy. It includes product, price,promotion, and place.

Integrated marketing program is a

comprehensive plan that communicatesand delivers the intended value to chosen

customers.

Step 3: Preparing an Integrated

Marketing Plan and Program


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Step 4: Building CustomerRelationships

The overall process of

building and maintaining

profitable customerrelationships by delivering

superior customer value

and satisfaction

Customer Relationship Management (CRM)


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Step 4: Building Customer

Relationships

Relationship Building Blocks: Customer Valueand Satisfaction

Customer-perceived value

The differencebetween totalcustomer valueand totalcustomer cost

Customersatisfaction

The extent towhich aproductsperceivedperformancematches abuyersexpectations


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Step 4: Building Customer Relationships

Customer Relationship Levels and Tools

BasicRelationships

FullPartnerships

Not All Customers are Equal

Basic Relationships : Low-margin customers

Full Partnerships :Key customers

Selective relationship management : Weeding out unprofitable customers


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Relating with more carefully selected

customers uses selective relationshipmanagement to target fewer, more profitablecustomers

Relating more deeply and interactively by

incorporating more interactive two wayrelationships through blogs, Websites, onlinecommunities and social networks

The Changing Nature of CustomerRelationships


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Partner relationship management involves working

closely with partners in other company departments and

outside the company to jointly bring greater value to

customers

Partners inside the company is every function area

interacting with customers

Electronically

Cross-functional teams

Partners outside the company is how marketers connect

with their suppliers, channel partners, and competitors by

developing partnerships

Partner Relationship Management


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Building Customer Relationships

Supply chain is a channel that stretches

from raw materials to components to final

products to final buyers Supply management

Strategic partners

Strategic alliances

Partner Relationship Management


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Step 5: Capturing Value from Customers

Customer lifetime value is the value of the

entire stream of purchases that the

customer would make over a lifetime of

patronage.

Creating Customer Loyalty and Retention


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Step 5: Capturing Value fromCustomers

Share of customer is the portion of the

customers purchasing that a company getsin its product categories

Growing Share of Customer


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Step 5: Capturing Value from

CustomersCustomer equity is

the total combined

customer lifetimevalues of all of the

companys

customers


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Step 5: Capturing Value fromCustomers

Building the right relationships with theright customers involves treating

customers as assets that need to bemanaged and maximized

Different types of customers requiredifferent relationship management

strategies Build the right relationship with the right

customers

Building Customer Equity
http://www.coca-cola.com/


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The Changing MarketingLandscape

Digital age Rapidglobalization

Ethics andsocial

responsibilityNot-for-profit

marketing

Major Developments


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The Changing Marketing

Landscape

Growth of the Internet

Advances in

telecommunications,information,transportation Customer research and

tracking

Product development Distribution

New advertising tools

24/7 marketing through theInternet

Challenges

Digital age

Globalization

Ethics and social

responsibility

Not-for-profit marketing

Marketing relationships


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Landscape

Digital age

Globalization

Ethics and social

responsibility



Geographical and

cultural distances have

shrunk Greater market coverage

More options for purchasing

and manufacturing

Increased competition fromforeign competitors

Challenges


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Landscape

Digital age

Globalization

Ethics and social

responsibility



Marketers need to

take great

responsibility for theimpact of their actions Caring capitalism is a way to

differentiate your company

Challenges


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Landscape

Digital age

Globalization

Ethics and social

responsibility



Many organizations are

realizing the

importance of strategicmarketing Performing arts

Government agencies

Colleges

Hospitals

Churches

Challenges


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Landscape

Digital age

Globalization

Ethics and social

responsibility



Profits through

managing long-term

customer equity Improve customer

knowledge

Target profitable customers

Keep profitable customers

Challenges

S Wh t I M k ti ?


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So, What Is Marketing?

Pulling It All Together


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C i ht 2010 P Ed ti I1 - 41

What is Marketing

The process of building profitable customer

relationships by creating value forcustomers and capturing value in return

chapter 1 creating and capturing customer value

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