Defining Marketing and

the Marketing Process

(Chap 1)
Stacy Smollin Schwartz
sschwartz@business.rutgers.edu
Intro to Marketing

Agenda
• Defining Marketing & The Marketing Process
• Creating Value
– Definitions
– Market Management Orientations
• Capturing Value
– Definitions
– Customer Relationship Management

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Defining Marketing

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Defining Marketing

1 2
Creating
Capturing Value
Value

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Defining Marketing

1 2
Creating
Capturing Value
Value

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Defining Value
Perceived
Benefits
• Technical
• Economic
• Service
• Social
• Emotional

Value =

Perceived Costs
• Technical
• Economic
• Service
• Social
• Emotional

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 The Marketing Process

Analysis Decisions Outcomes

The 5 Cs Aspirational Marketing Mix Relationship Capture Value

• Customers Decisions Decisions (4 Ps) Management • Create Satisfied,
• Company • Segmentation • Product • Customers Loyal Customers
• Competitors • Targeting • Place • Partners • Capture
• Collaborators • Positioning • Promotion Customer LTV
• Context • Price • Increase market
share
• Generate
Referrals
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Value Creation, Key Concepts…

• Customer Needs, Wants & Demands
• Market offerings
• Marketing Myopia
• Customer Satisfaction
• Exchanges and Relationships
• Markets

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Customer Needs, Wants, Demands

Needs Wants
• States of felt • Needs shaped by
deprivation culture and
• Part of being individual
human personality
• e.g. physical needs, • Described as
individual needs specific objects

Demands
• Wants backed by
buying power.

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Market Offerings Service

Product

Market
Offerings
fulfill
________
______ & Experience
_______ Information

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Market Offerings

What Business is Hollywood in?

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Market Offerings

_______________: Focus on company’s needs

instead of customers’ needs and wants

Movie Theater Entertainment

Business Business

What Business is Hollywood in?

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 Customer Satisfaction
How well a market offering meets or
surpasses _________________

• Satisfied
customers buy
again and spread
the word.

• Dissatisfied
customers switch
to competitors
and criticize the
product to others.
Customers rate this hotel room a “7”…

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Customer Satisfaction

Customer Satisfaction with Hotel

10
10
8 7 7
6
4 3
2
0
Satisfied Dissatisfied

Expectations Experience

Setting low expectations Setting high

may satisfy those who expectations may
buy but fail to attract disappoint buyers.
enough buyers.

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Exchanges and Relationships

Exchange is the act of

obtaining a desired
object from someone
by offering something
in return.
• Marketing consists of creating,
maintaining, and growing
desirable exchange
relationships with target
audiences.

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Markets

A Market is the set

of _______ and
________ buyers of
a product or service.
• Share a particular want
or need that can be
satisfied through an
exchange relationship

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 Marketing Management Orientations

The company orientation

towards the marketplace.

The philosophy the company applies

while targeting a market.

There are 5 different

marketing management orientations...

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Marketing Management Orientations

“Inside Out” Approaches “Outside In” Approaches
Societal
Production Product Selling Marketing
Marketing
Concept Concept Concept Concept
Concept

ORIENTATION: ORIENTATION: ORIENTATION: ORIENTATION: ORIENTATION:

Highly Best quality, Customers Needs and Short-term
available & performance, won’t buy wants of customer
affordable features unless pushed target markets wants & long-
products term welfare

FOCUS: FOCUS: FOCUS: FOCUS: FOCUS:

production & continuous large-scale delivering improving
distribution product selling and customer customer and
efficiency improvements promotion needs and society well-
value being

“Lean and “Build a Better “Make and “Sense and “Values driven”
Focused” Mousetrap” Sell” Respond”
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Selling vs. Marketing Concepts

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Societal Marketing Concept looks

beyond consumers & profits

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More Key Concepts…

Capturing Value from Customers

• Customer Lifetime Value (LTV)
• Share of Customer
• Customer Equity
• Customer Relationship Management

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Customer Lifetime Value (LTV)

High
LTV is the Satisfaction
value of the
_________
________ Shop more Customer
_________ a often Loyalty

customer
makes over
their lifetime Spend more
as your money

customer
 Share of Customer

Share of
Customer is the
% they get of
the customer’s
purchasing ___
____________
____________ Increase SOC of existing customers by:
• Good customer relationship mgmt
• More product variety
• Cross-sell and up-sell opportunities

Share of Customer

Market Share = $
• Brand’s share of total
revenue spent in the
market

SOC = Loyalty
• Individuals’ spending
preference for that
brand

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 Customer Equity

Customer
Equity is the
___________
___________
_____ of the all
the company’s
current &
potential
customers

Customer Relationship Management

Different types of customer relationships require
different management strategies …
Potentially
profitable Both profitable
but not and loyal…
loyal… Enjoy Continuously
them for the invest in them
moment, (nurture, retain,
capture grow)
short-term
value

Low Highly loyal,

profitability, not very
low loyalty… profitable…
Invest nothing, Try to improve
make $ on profitability or
every “fire” them.
transaction
 Thanks

Stacy Smollin Schwartz

sschwartz@business.rutgers.edu
tw @smollinschwartz

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