Chapter 1

Marketing in a Changing World:

Creating Customer Value and
Satisfaction
1-2
Road Map: Previewing the
Concepts
Define what marketing is and discuss its core
concepts.
Explain the relationships between customer
value, satisfaction, and quality.
Define marketing management and understand
how marketers manage demand and build
profitable customer relationships.
Compare the five marketing management
philosophies.
Analyze the major challenges facing marketers
heading into the new connected millennium.

1-3
What is Marketing?
Simply put: Marketing is the delivery
of customer satisfaction at a profit.
Goals: Attract new customers by
promising superior value and
keep and grow current customers by
delivering satisfaction.

1-4
Core Marketing Concepts
(Fig. 1-1)
1-5
Marketing Defined
Process by which individuals and
groups obtain what they need and
want through creating and
exchanging products and value
with others.
1-6
What are Consumers Needs,
Wants, and Demands?
Needs - state of felt
deprivation including
physical, social, and
individual needs i.e hunger
Wants - form that a human
need takes as shaped by
culture and individual
personality i.e. bread
Demands - human wants
backed by buying power
i.e. money
1-7
Experiences Persons
Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Places
Organizations Ideas Activities
What Will Satisfy Consumers
Needs and Wants?
Services
Activity or Benefit Offered for Sale That is Essentially
Intangible and Doesnt Result in the Ownership of Anything
1-8
How Do Consumers Choose
Among Products and Services?

Total Quality Management Involves Improving the
Quality of Products, Services, and
Business Processes
Products Perceived Performance in Delivering
Value Relative to Buyers Expectations is
Customer Satisfaction

Value Gained From Owning a Product and
Costs of Obtaining the Product is
Customer Value
1-9

Exchanges

Transactions
Relationships
Building a Marketing
Network by Adding:
Financial Benefits
Social Benefits
Structural Ties
Profitable Customers
How Do Consumers Obtain
Products and Services?
1-10
Consider the following thought questions,
formulate an answer, pair with the student on
your right, share your thoughts with one
another, and respond to questions from your
instructor.
When was the last time you were completely
satisfied with something you purchased?
What was it?
Why were you satisfied?
What did a marketer have to do with this?

1-11
Modern Marketing System
(Fig. 1-2)
1-12
Marketing Management
Attracting new customers and
retaining and building
relationships with current
customers
Profitable
Customer
Relationships
Finding and increasing
demand, also changing or
reducing demand such as in
Demarketing

Demand
Management
Involves managing demand,
which involves managing
customer relationships

Marketing
Management
1-13
Stage 1. Entrepreneurial Marketing
Stage 2. Formulated Marketing
Stage 3. Intrepreneurial Marketing
Marketing Management
Practice
1-14

Production Concept

Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Marketing Management
Philosophies
1-15
Marketing and Sales Concepts
Contrasted (Fig. 1-3)
1-16
Societal Marketing
Concept (Fig. 1-4)
http://www.johnsonandjohnson.com/
1-17
What are the major differences
between the Marketing Concept and the
Societal Marketing Concept?
1-18
Marketing Challenges in the New
Connected Millennium (Fig. 1-5)
1-19
Learn About &
Track Customers
With Databases

Communicate With
Customers in Groups
Or One-on-One
Create Products &
Services Tailored to
Meet Customer Needs

Distribute Products
More Efficiently &
Effectively
Connecting Technologies in
Computers,
Telecommunications,
Information, & Transportation
Help To:
Technologies for Connecting
1-20
The Internet
The Internet has been hailed as the technology
behind a New Economy.
New applications include:
click-and-mortar companies
click-only companies
Business-to-business e-commerce
Business-to-business transactions online are
expected to reach $3.6 trillion in 2003.
By 2005, 500,000 companies will use the
Internet to do business.

1-21
Connections With Customers
Most marketers are
targeting fewer,
potentially more
profitable customers.
Asking:
What value does the
customer bring to the
organization?
Are they worth pursuing?
Connecting for a
customers lifetime.
1-22
BankOne (Marketing at Work
1-3)
BankOne focuses on
connecting with
customers they can serve
profitably.
Premier One customers
know that they are
special, exclusive,
privileged, valued.
http://www.bankone.com/
1-23
Direct Connections With
Customers
Many companies use technologies to let them
connect more directly with their customers.
Products available via telephone, mail-order catalogs,
kiosks and e-commerce.
Some firms sell only via direct channels (i.e. Dell
Computer, http://www.amazon.com/), others use a
combination.
Direct marketing is redefining the buyers role in
connecting with sellers.
Buyers are active participants in shaping the marketing
offer and process; some buyers design their own
products online such as at http://www.landsend.com/.

1-24
Connections With Marketings
Partners
Connecting Inside
the Company
Every employee
must be
customer-focused
Teams coordinate
efforts toward
customers
Connecting With
Outside Partners
Supply Chain
Management
Strategic
Alliances
1-25
Connections With the World
Around Us
Global
Connections
Value
Connections
Social Responsibility
Connections
Broadening
Connections
1-26
Rest Stop: Reviewing the
Concepts
Define what marketing is and discuss its core
concepts.
Explain the relationships between customer value,
satisfaction, and quality.
Define marketing management and examine how
marketers manage demand and build profitable
customer relationships.
Compare the five marketing management
philosophies.
Analyze the major challenges facing marketers
heading into the next millennium.