marketing creating and capturing customer value

MARKETING AN INTRODUCTION

Armstrong/Kotler1

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

MarketingCreating and Capturing Customer Value

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Chapter Outline

• What is Marketing?

• Market management orientation

• Role of marketing:– Satisfy customer needs and wants– Build customer relationship

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Marketing Concept

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others (Kotler & Armstrong, 2008)

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MARKET

• set of actual and potential buyers of a product who have a common need or want that can be satisfied through exchange

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MARKET SEGMENTATION

• process of breaking down a large market into smaller manageable units.• VARIABLES: Demographic – age, gender, income occupation, location, family size, educationPsychographic – personality, lifestyle, activities, interest, opinionsOther variables – durability, fabric, fashion sense, design, scent, low price, image

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MARKETING CONCEPTS

• TARGET MARKET - chosen market segment

• MARKETING MIX – blend of factors that defines marketing success: PRODUCT, PRICE, PLACE, PROMOTION

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EXCHANGE• is the act of obtaining a desired

object by offering something in return

MARKETING CONCEPTS

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TRANSACTION• an exchange or trade of values

between two parties, measures the number of exchanges that take place.

• For a business to succeed, exchanges and transactions must be continuous to sustain a firm’s operations

MARKETING CONCEPTS

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RELATIONSHIP• Treats each transaction with much

value an appreciation• Marketers build long-term

relationships with valued customers, distributors, suppliers and dealers

• Relationship marketing ensures profit

• Build good relationships and profitable transactions will follow

MARKETING CONCEPTS

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Market Offerings

Customer needs and wants are fulfilled Through market offering:

• Products – anything offered for sale• Tangible goods• Intangible goods Services

•Marketing Myopia – too much focus on product (losing sight of customer needs)

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Examples of Marketing Myopia

Company Definition SuggestionXerox We make copying equipment

We help improve office productivity

Missouri-Pacific

Railroad

We run a railroad We are a people-and-goods mover

Carrier We make air conditioners and furnaces

We provide climate control in the home

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MARKETING

CREATES• FORM• TIME• PLACE• OWNERSHIP

UTILITIES

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FORM UTILITY

• created when the company converts raw materials and component inputs into finished goods and services

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TIME AND PLACE UTILITY

• occurs when consumers find goods and services available when and where they want to purchase them

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OWNERSHIP UTILITY

• created when there is already the transfer of title to goods or services at the time of purchase.

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TYPES OF UTILITYType Description Examples Organizational

Function Responsible

Form Conversion of raw materials and components into finished goods and services

Dinner at Sizzling Plate; T-Shirt from Bench

Production

Time Availability of goods and services when consumers want them

Dental appointment; LBC Delivery

Marketing

Place Availability of goods and services at convenient locations

Technician available at a computer repair store; ATMs in malls

Marketing

Ownership (possession)

Ability to transfer title to goods and services from marketers to buyers

Retail sales (in exchange for money, credit card or debit card payment)

Marketing

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Discussion Question

Why is it important to a

marketer to decide which

customers they will serve?

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CUSTOMER VALUE

• the difference between the value of buying, owning and using the product and the cost of the product. The customer compares the cost of the product with the benefits he gains from using the product. (if the benefit exceeds the cost, there is positive customer value and the customer usually decides to buy the product; if the cost exceeds the benefit, there is negative customer value and the customer would most likely avoid the product and look for something else).

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CUSTOMER SATISFACTION

• the difference between the buyer’s expectation and the perceived performance of the product. Before making any purchase, a customer would already have an expectation in mind and his task is to look for a product that he thinks would perform and deliver according to his expectations.

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QUALITY

• generally defined as the measure of excellence or state of being free from defects, deficiencies, and significant variations (http://www.businessdictionary.com/ definition/quality.html).

• It is what the customer says it is. The ultimate evaluator of quality is the customer. It is the unyielding and continuing effort by everyone in an organization to understand, meet and exceed the needs of customers.

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EXTEDING THE TRADITIONAL BOUNDARIES OF MARKETING

• MARKETING FOR NON-PROFIT ORGANIZATIONSThe idea is to promote the organization’s cause or message.

Bantay Kalikasan, one of the four flagship programs of ABS-CBN Foundation Inc. is an example of a non-profit organization. To promote the organization’s cause and to sustain all the activities, they need partners, donors, and sponsors. Moreover, considering that ABS-CBN also is into broadcasting business, it is easier to promote the goals of Bantay Kalikasan.

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NON TRADITIONAL MARKETING

• PERSON MARKETINGThis involves efforts designed to cultivate the attention interest, and preferences of a target market toward a celebrity or authority figure. An extension of person marketing is celebrity endorsements.

Kris Aquino uses person marketing to promote her Kris magazine, where she appears on every cover..

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• PLACE MARKETINGThis attempts to attract customers to particular areas. Cities, states, regions, and countries publicize their tourist attractions to lure vacation travelers. They also promote themselves as good locations for businesses.

This is a brochure that showcases a collective overview of 7 of the many reasons why the Philippines should be your next Dive Destination. .

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• CAUSE MARKETINGThis refers to the identification and marketing of a social issue, cause, or idea to selected target markets. Cause marketing covers a wide range of issues, including literacy, physical fitness, environmental protection, and more.

Avon is known for its active support for breast cancer awareness campaigns worldwide..

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• EVENT MARKETINGmarketing of sporting, cultural, and charitable activities to selected target markets. It also includes the sponsorship of such events by firms seeking to increase public awareness and bolster their images by inking themselves and their products to the events.

Since its first run in 1974, the National MILO® Marathon has now become the biggest running event in the country. Its immense popularity has attracted runners from all age groups to participate, including children. For 2010’s Milo Marathon, a portion of the registration fee of every participant was allotted to its advocacy of providing underprivileged children with running shoes..

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• ORGANIZATION MARKETINGThis attempts to persuade people to accept the goals of, receive the services of, or contribute in some way to an organization.

The Philippine National Red Cross uses organization marketing to encourage Filipinos to be involved in providing blood and in disaster-related activities and short-term palliatives as well as to help uplift the condition of the most vulnerable, and a wider array of humanitarian services...

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Marketing Management

• the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives (Kotler and Armstrong, 2008).

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SOCIAL RESPONSIBILITY in Marketing

• involves philosophies, policies, procedures, and actions whose primary objective is to help the society. Companies must conduct their business according to the highest ethical standards

• they should also find ways to promote goodwill as well as build a lasting positive impression to gain public sympathy and loyalty.

• In short, companies conduct their activities and use their profits in ways that are beneficial to the society.

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Marketing Management Orientations

• Production concept – wide array of products (availability and affordability)

• Product concept – best quality (innovation)• Selling concept – promotion (unsought goods)• Marketing concept – customer driven• Societal marketing concept – human welfare,

customer satisfaction, company profits

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Marketing Management Orientations

Production concept

Product Concept

Selling concept

Marketing Concept

Societal Marketing Concept

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Summary of Marketing Orientations

Orientation Focus is on…

Production Production and distribution efficiency

Product Most quality product

Sales Product sales

Market Consumers’ needs and wants

Societal In addition to consumers’ needs and wants, also consider benefits to the society

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Preparing an Integrated Marketing Plan and Program

Price Place

Promotion Product

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Building Customer Relationships

• What is Customer Relationship Management– Customer value

– Customer satisfaction

• Customer relationship levels and tools

marketing creating and capturing customer value

Documents

individual needs

form human needs

prentice hall3customer

american needs food

basic physical needs

safety social needs

pearson education

prentice hallnotes