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15 views37 pages

Chapter 01

Uploaded by

2022-1-60-086
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MKT 101

CHAPTER
Creating and
Capturing
Customer Value

1
Learning Objectives

• Define marketing and the marketing process.


• Explain the importance of understanding customers and
identify the five core marketplace concepts.
• Identify the elements of a customer-driven marketing
strategy and discuss the marketing management orientations
that guide strategy.
• Discuss customer relationship management and identify
strategies for creating value for and capturing value from
customers.
• Describe the major trends and forces that are changing the
marketing landscape.
Marketing

Marketing is managing profitable customer


relationships

Goals:
❑ Attract new customers by promising superior value
❑ Keep and grow current customers by delivering
satisfaction
Marketing

Marketing is the process by which companies create


value for customers and build strong customer
relationships in order to capture value from
customers in return

OLD view of NEW view of


marketing: marketing:

Making a sale— Satisfying


“telling and selling” customer needs
A Simple Model
of the Marketing Process
Core Concepts

Marketers must understand five core customer


and marketplace concepts:
• Needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
Needs, Wants, and Demand

Needs
Physical goods constitute the bulk of most countries’ production and
marketing effort

Wants
Form that a human need takes, as shaped by culture and individual
personality

Demand
Wants + Buying Power = Demand
Market Offerings

Some combination of products, services, information, or


experiences offered to a market to satisfy a need or want

Marketing offers fulfill needs and wants


Marketing Myopia

• Occurs when sellers pay more attention to the specific products


they offer than to the benefits and experiences produced by
the products.
• They focus on the “wants” and lose sight of the “needs.”
Customer Value and Satisfaction

Care must be taken when setting expectations for market


offerings:

• If performance is lower than expectations, satisfaction


is low.
• If performance is higher than expectations, satisfaction
is high
Exchanges and Relationships

Exchange:
• Act of obtaining a desired object from someone by offering something
in return

Relationships:
• Marketing actions build and maintain relationships with target
audiences involving an idea, product, service, or other object
• Marketers build strong relationships by consistently delivering
superior customer value
What Is a Market?

• A market is the set of actual and potential buyers of a


product
• These people share a need or want that can be satisfied
through exchange relationships
A Modern Marketing System
Marketing Management

• The art and science of choosing target markets and building


profitable relationships with them

• Aim is to find, attract, keep, and grow customers by


creating, delivering, and communicating superior value.
Marketing Management

• Designing a winning marketing strategy requires answers to the


following questions:

1. What customers will we serve?


— What is our target market?
2. How can we best serve these customers?
— What is our value proposition?
Marketing Management Orientations

Organizations design and carry out their marketing strategies


under five alternate concepts:

• Production Concept
• Product Concept
• Selling Concept
• Marketing Concept
• Societal Marketing Concept
Production Concept

❑ The production concept holds that consumers will favor


products that are available and highly affordable.
❑ Management should focus on improving production and
distribution efficiency
Product Concept

❑ The product concept holds that consumers will favor


products that offer the most in quality, performance, and
innovative features.
❑ Under this concept, marketing strategy focuses on making
continuous product improvements.
Marketing Management Orientations
Selling concept

❑ The idea that consumers will not buy enough of the firm’s
products unless the firm undertakes a large scale selling and
promotion effort
The Marketing Concept

A marketing management philosophy that holds that achieving


organizational goals depends on knowing the needs and wants of
target markets and delivering the desired satisfaction better
than competitors
The Selling and Marketing Concepts Contrasted
The Societal
Marketing Concept

The idea that a company’s marketing decisions should consider


consumer’s wants, the company’s desires, consumers’ long-run
interests and society’s long-run interests.
The Considerations Underlying
the Societal Marketing Concept
The Integrated Marketing Plan

❑ Transforms the marketing strategy into action.


❑ Includes the marketing mix and 4 Ps of marketing:

• Product
• Price
• Place (Distribution)
• Promotion
Customer Relationship Management

The overall process of building and maintaining profitable


customer relationships by delivering superior customer value
and satisfaction
Customer Perceived Value

❑ Customer’s evaluation of the difference between all of the benefits and all
of the costs of a marketing offer relative to those of competing offers
❑ To some customers “value” might mean paying more to get more
Customer Satisfaction

❑ Extent to which the product’s perceived performance matches


a buyer’s expectations
❑ High levels of customer satisfaction often leads to consumer
loyalty
❑ Some firms seek to DELIGHT customers by exceeding
expectations
❑ Profitability must be considered
Changing Nature of Relationships

❑ Customer profitability analysis eliminates losing customers and


selects profitable ones with whom relationships should be
developed
❑ Firms now relate more deeply and interactively via blogs, social
network Web sites, email, and video sharing
❑ Embracing customer-managed relationships requires marketing via
attraction rather than intrusion
❑ Consumer-generated marketing has become a significant marketing
force
Partner Relationship Marketing

❑ Marketing partners help create customer value and assist in


building customer relationships.
❑ Partners inside the firm:
Cross-functional customer teams
❑ Partners outside the firm:
Supply chain management
Capturing Value From Customers

❑ Value is captured from customers via current and future sales,


market share and profit
❑ Superior customer value leads to highly satisfied loyal customers who
buy more
❑ Key outcomes of customer value include customer loyalty and
retention, share of market, share of customer, and customer equity
Capturing Value From Customers

❑ Customer lifetime value


The value of the entire stream of purchases that the customer
would make over a lifetime of patronage.

❑ Share of customer
The portion of the customer’s purchasing that a company gets in
their product categories.
Customer Equity

❑ The total combined customer lifetime values of all the company’s


current and potential customers
❑ Manage equity by:

• Classifying customers by projected loyalty and potential


profitability
• Manage each group accordingly
An Expanded Model of the Marketing Process
Thank you

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