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Chapter 1

Marketing Marketing

Creating and CapturingCreating and CapturingCustomer ValueCustomer Value

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Copyright 2011, Pearson Education Inc. Publishing as Prentice-

Hall

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1. Define marketing and the marketing process.

2. Explain the importance of understandingcustomers and identify the five core marketplaceconcepts.

3. Identify the elements of a customer-drivenmarketing strategy and discuss the marketingmanagement orientations that guide strategy.

4. Discuss customer relationship management and

identify strategies for creating value for andcapturing value from customers.

. Descri!e the ma"or trends and forces that arechanging the marketing landscape.

est !top"est !top" Previewing the ConceptsPreviewing the Concepts

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Creating Custo#er $alue

# %oal" $rovide the very !estcustomer service % customerexperience.

# Custo#er-centric approach:&ree delivery' free returns'

3( day return policy %service upgrades.

# esults" )* of sales comefrom current customers'tremendous sales gro+thdespite poor economy' 1,million customers servedannually.

Zappos Creates Customer Value &Relationships

First Stop

&uilding elationships

# !er'ice Culture" uilt around1, core principles every ne+

hire takes 4 +eeks of customerloyalty training.

# Co##it#ent" During training'employees are offered /2,,, to0uit only 1* do so.

# (i)elong relationships are the

goal" Employees comparisonshop other e! sites socialnet+orking is used for directcontact +ith customerscustomer feed!ack and criticismis strongly encouraged and

valued.

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What Is ar!eting"

imple definition Marketing is #anaging pro)itable custo#errelationships.

*here)ore" Marketing is satis)ying the +antsand needs o) custo#ers, at a pro)it.

oals

1. ttract ne+ custo#ers by pro#isingsuperior 'alue.

2. eep and gro+ current custo#er-base bydeli'ering satis)action.

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ar!eting $e%ined

# 5arketing is the process !y +hichcompanies create value for customers and!uild strong customer relationships in order

to capture value from customers in return.

OLD view of

marketing:

Making a sale -“telling and

selling”

NEW view of

marketing:

Satisfyingcustomer

needs

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'he ar!eting Process

# 6 simple model of the marketing processUnderstand the marketplace and customer

needs and wants.

Design a customer-driven marketing strategy.Construct an integrated marketing program

that delivers superior value.Build profitable relationships and create

customer delight.Capture value from customers to create profits and customer equity.

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Core Concepts

# 5arketers must understand five corecustomer and marketplace concepts

eeds! wants! and demands"arket offerings#alue and satisfaction

$%changes and relationships"arkets

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*eeds+ Wants+ and $emands

# *eed, tate of felt deprivation including physical'social' and individual needs.$hysical' social' and individual needs

# Wants,

&orm that a human need takes' as shaped!y culture and individual personality.

# ants 7 uying $o+er 8 $emand

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ar!eting .%%erings

# 9eeds and +ants are fulfilled througha "arketing &ffer:

'ome combination of products!services! information! or e%periences

offered to a market to satisfy a need or

want.

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ar!et .%%erings

# $roducts(ersons! places! organi)ations! information!

and ideas.

# ervices *ctivity or benefit offered for sale that is

essentially intangible and does not result inownership.

# rand experiences'hould immerse the consumer in the brand

e%perience and may be intensely personal.

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ar!eting 0opia

# 5arketing myopia&ccurs when sellers pay more attention

to the specific products they offer thanto the benefits and e%periences

produced by the products.

+hey focus on the ,wants and losesight of the ,needs.

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Customer Value and Satis%action

# :are must !e taken +hen settingexpectations for market offerings

f performance is lower thane%pectations! satisfaction is low.

f performance is higher than

e%pectations! satisfaction is high.

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changes and elationships

# Exchange *ct of obtaining a desired ob/ect from

someone by offering something inreturn.

# ;elationships"arketing actions build and maintain

relationships with target audiencesinvolving an idea! product! service! orother ob/ect. #alue builds relationships.

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What Is a ar!et"

# 6 markets the set of actual and potential buyers

of a product .# <hese people share a need or +ant

that can !e satisfied through

exchange relationships.

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odern ar!eting S0stems

# 5ain elements in a modern marketingsystem include'uppliers

Company 0marketer1Competitors"arketing intermediaries

Consumers# 5a"or environmental forces affect each

element.

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ar!eting anagement

# <he art and science of choosingtarget markets and !uilding profita!le

relationships +ith them. *im is to find! attract! keep! and grow

customers by creating! delivering! and

communicating superior value.

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ar!eting anagement

# Designing a +inning marketingstrategy re0uires ans+ers to the

follo+ing 0uestions 1. What customers will we

serve?

— What is our target market ?2. How can we best serve these

customers?

— What is our value

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Selecting Customers to Serve

# 5arket segmentationDividing the market into segments of

customers.# <arget marketing'electing one or more segments to

cultivate.

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Choosing a Value Proposition

# <he set of !enefits or values acompany promises to deliver to

consumers to satisfy their needs.#alue propositions dictate how firms will

differentiate and position their brands in

the marketplace.

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ar!eting anagement

.rientations

# =rgani>ations design and carry outtheir marketing strategies under five

alternate concepts(roduction Concept (roduct Concept

'elling Concept "arketing Concept 'ocietal "arketing Concept

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'he ar!eting Concept

# <he marketing concept * marketing management philosophy

that holds that achieving organi)ationalgoals depends on knowing the needs

and wants of target markets and

delivering the desired satisfaction better

than competitors.

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'he Societal

ar!eting Concept# <he societal marketing concept+he idea that a company2s marketing

decisions should consider consumers2

wants! the company2s desires!

consumers2 long-run interests! and

society2s long-run interests.

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'he Integrated ar!eting Plan

# <ransforms the marketing strategy intoaction.

# Includes the marketing mix and 4 $sof marketing(roduct

(rice(lace 0Distribution1(romotion

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uilding Customer elationships

# :ustomer relationship management+he overall process of building and

maintaining profitable customerrelationships by delivering superior

customer value and satisfaction.

# :;5 deals +ith all aspects of ac0uiring'keeping' and gro+ing customers.

# :ustomer value and satisfaction are key.

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Customer Perceived Value

# :ustomer perceived valueCustomer2s evaluation of the difference

between all of the benefits and all of thecosts of a marketing offer relative to

those of competing offers.

# $erceptions may !e su!"ective

# <o some customers ?value@ might meanpaying more to get more.

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Customer Satis%action

# :ustomer satisfaction$%tent to which the product2s perceived

performance matches a buyer2se%pectations.

# Aigh levels of customer satisfaction oftenleads to consumer loyalty.

# ome firms seek to DEBIA< customers !yexceeding expectations.

# $rofita!ility must !e considered.

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Customer elationships

# &irms may choose to !uildrelationships at different levels.

#Boyalty and retention programs !uildrelationships and may include3requency marketing programsClub marketing programs

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Changing *ature o% elationships

# :ustomer profita!ility analysis eliminates losingcustomers and selects profita!le ones +ith+hom relationships should !e developed.

#&irms related more deeply and interactively via!logs' social net+ork e! sites' e-mail' andvideo sharing.

# Em!racing customer-managed relationshipsre0uires marketing via attraction rather thanintrusion.

# :onsumer-generated marketing has !ecome asignificant marketing force.

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Partner elationship ar!eting

# 5arketing partners help createcustomer value and assist in !uilding

customer relationships.# $artners inside the firmCross-functional customer teams

# $artners outside the firm'upply chain management

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Capturing Value From Customers

# Calue is captured from customers viacurrent and future sales' market share'and profit.'uperior customer value leads to highly

satisfied loyal customers who buy more.4ey outcomes of customer value include

customer loyalty and retention! share ofmarket! share of customer! and customerequity.

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Customer 5uit0

# <he total com!ined customer lifetimevalues of all the companys current

and potential customers.# 5anage e0uity !yClassifying customers by pro/ected

loyalty and potential profitability."anage each group accordingly.

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Capturing Value From Customers

# :ustomer lifetime value+he value of the entire stream of

purchases that the customer wouldmake over a lifetime of patronage.

# hare of customer

+he portion of the customer2s purchasing that a company gets in their

product categories.

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Changing ar!eting 6andscape

# <he uncertain economic environment

# <he digital age

# ;apid glo!ali>ation# ustaina!le marketing call for more

social responsi!ility

# ro+th of not-for-profit marketing

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1. Define marketing and the marketing process.

2. Explain the importance of understandingcustomers and identify the five coremarketplace concepts.

3. Identify the elements of a customer-drivenmarketing strategy and discuss the marketingmanagement orientations that guide strategy.

4. Discuss customer relationship managementand identify strategies for creating value for and capturing value from customers.

. Descri!e the ma"or trends and forces that arechanging the marketing landscape.

est !top" eviewing the Concepts

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6ll rights reserved. 9o part of this pu!lication may !e reproduced' stored in aretrieval system' or transmitted' in any form or !y any means' electronic'

mechanical' photocopying' recording' or other+ise' +ithout the prior +rittenpermission of the pu!lisher. $rinted in the Fnited tates of 6merica.

Copyright © 2011 Pearson Education, Inc.Copyright © 2011 Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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