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Chapter 1
Marke&ng:
Crea&ng and Capturing Customer Value
Copyright 2012 Pearson Education

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Creating and Capturing Customer


Value
Topic Outline

What Is Marke-ng?
Understand the Marketplace and Customer Needs
Designing a Customer-Driven Marke-ng Strategy
Preparing an Integrated Marke-ng Plan and Program
Building Customer Rela-onships
Capturing Value from Customers
The Changing Marke-ng Landscape

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What Is Marketing?
Marke&ng is a process by which companies
create value for customers and build strong
customer rela-onships to capture value from
customers in return
Examples of companies (local, na-onal,
interna-onal) that are excellent at marke-ng
and how they reect the deni-on.

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What Is Marketing?
The Marke&ng Process

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Understanding the Marketplace


and Customer Needs
Customer Needs, Wants, and Demands

Needs

States of deprivation
Physicalfood, clothing, warmth, safety
Socialbelonging and affection
Individualknowledge and self-expression

Wants

Form that needs take as they are shaped by culture and


individual personality

Demands
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Wants backed by buying power

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Maslows Hierachy of Needs

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Understanding the Marketplace


and Customer Needs
Market oerings are some
combina-on of products,
services, informa-on, or
experiences oered to a
market to sa-sfy a need or
want
Marke&ng myopia is
focusing only on exis-ng
wants and losing sight of
underlying consumer
needs

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Understanding the Marketplace


and Customer Needs
Customer Value and Sa&sfac&on
Expecta&ons

Customers
Value and
satisfaction

Marketers
Set the right level of
expectations
Not too high or low
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Understanding the Marketplace


and Customer Needs
Exchange is the act of obtaining a desired
object from someone by oering
something in return

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Understanding the Marketplace


and Customer Needs
Markets are the set of actual and
poten-al buyers of a product

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Designing a Customer-Driven
Marketing Strategy
Marke&ng management is the art and
science of choosing target markets and
building protable rela-onships with them
What customers will we serve?
How can we best serve these customers?

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Designing a Customer-Driven
Marketing Strategy
Selec&ng Customers to Serve

Market segmenta&on refers to dividing the


markets into segments of customers

Target marke&ng refers to which segments


to go aVer

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Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposi&on

Value proposition
Set of benefits or
values a company
promises to deliver to
customers to satisfy
their needs
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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

Production
concept

Product
concept

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Selling
concept

Marketing
concept

Societal
concept

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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

Produc&on concept is the idea that


consumers will favor products that are
available or highly aordable

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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

Product concept is the idea that consumers
will favor products that oer the most
quality, performance, and features.
Organiza-on should therefore devote its
energy to making con-nuous product
improvements.
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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

Selling concept is the idea that consumers


will not buy enough of the rms products
unless it undertakes a large scale selling
and promo-on eort

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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

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Marketing concept is the


idea that achieving
organizational goals
depends on knowing the
needs and wants of the
target markets and
delivering the desired
satisfactions better than
competitors do
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Designing a Customer-Driven
Marketing Strategy
Marke&ng Management Orienta&ons

Societal marketing concept
is the idea that a company
should make good marketing
decisions by considering
consumers wants, the
companys requirements,
consumers long-term
interests, and societys longrun interests
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Designing a Customer-Driven
Marketing Strategy

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Preparing an Integrated Marketing


Plan and Program
The marke&ng mix: set of tools (four Ps) the
rm uses to implement its marke-ng
strategy. It includes product, price,
promo-on, and place.
Integrated marke&ng program:
comprehensive plan that communicates
and delivers the intended value to chosen
customers.
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Building Customer Relationships


Customer Rela&onship Management (CRM)
overall process of
The
building
and maintaining

protable customer
rela-onships by delivering
superior customer value
and sa-sfac-on

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Building Customer Relationships


Rela&onship Building Blocks: Customer Value
and Sa&sfac&on

Customer
Customerperceived value

The difference
between total
customer value
and total
customer cost

satisfaction

The extent to
which a
products
perceived
performance
matches a
buyers
expectations

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Building Customer Relationships


Customer Rela&onship Levels and Tools

Basic
Relationships

Full
Partnerships

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Building Customer Relationships


The Changing Nature of Customer
Rela&onships

Rela-ng with more carefully selected


customers uses selec-ve rela-onship
management to target fewer, more
protable customers
Rela-ng more deeply and interac-vely by
incorpora-ng more interac-ve two way
rela-onships through blogs, Websites,
online communi-es and social networks
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Building Customer Relationships


The Changing Nature of Customer
Rela&onships

Customer-managed rela&onships
Marke-ng rela-onships in which
customers, empowered by todays new
digital technologies, interact with
companies and with each other to shape
their rela-onships with brands.
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Building Customer Relationships


Partner rela&onship management involves
working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers

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Building Customer Relationships


Partner Rela&onship Management
company is every
Partners inside the

func-on area interac-ng with customers


Electronically
Cross-func-onal teams

Partners outside the company is how


marketers connect with their suppliers,
channel partners, and compe-tors by
developing partnerships
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Building Customer Relationships


Partner Rela&onship Management

Supply chain is a channel
that stretches

from raw materials to components to nal


products to nal buyers
Supply chain management

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Capturing Value from Customers


Crea&ng Customer Loyalty and Reten&on

Customer life-me value
is the value of the

en-re stream of purchases
that the

customer would
make over a
life-me of
patronage

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Capturing Value from Customers


Growing Share of Customer

Share of customer is the por-on of the


customers purchasing that a company gets
in its product categories

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Capturing Value from


Customers
Customer equity is
the total combined
customer life-me
values of all of the
companys
customers

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Capturing Value from Customers


Building Customer Equity
Right rela-onships w ith the right customers

involves trea-ng customers as assets that


need to be managed and maximized
Dierent types of customers require
dierent rela-onship management
strategies

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The Changing Marketing


Landscape
Uncertain Economic Environment
New consumer frugality
Marketers focus on value for the customer

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The Changing Marketing


Landscape
Uncertain Economic Environment
New consumer frugality
Marketers focus on value for the customer

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The Changing Marketing


Landscape
Digital Age
People are connected con&nuously to people
and informa&on worldwide
Marketers have great new tools to
communicate with customers
Internet + mobile communica&on devices
creates environment for online marke&ng

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The Changing Marketing


Landscape

Rapid Globaliza&on
Sustainable Marke&ng
Not-for-Prot Marke&ng

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So, What Is Marketing?


Pulling It All Together

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All rights reserved. No part of this publication may be reproduced, stored in a


retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright 2012 Pearson Education


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