Understanding the Marketplace

and Customer Needs

• Five core customer and marketplace concepts:
• Needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets

Copyright © 2017 Pearson Education, Inc. 1-7

 Customer Needs, Wants,
and Demands
Needs
• Difference between actual and desired state
• Can be physiological or psychological

Wants
• Desire to satisfy a need in a particular way
• Influenced by history, past experience, and culture

Demands
• Human wants that are backed by buying power
▪ Customers’ desires for products coupled with the resources
needed to obtain them

Copyright © 2017 Pearson Education, Inc. 1-8

 UNDERSTANDING THE MARKET
E Need Want
X
P
L
A
I
N
E
D

Demand

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 1-9

 Market Offerings
• Products, services, information or experiences
• Offering are products and services designed to
deliver value to customers—either to fulfil their
needs, satisfy their “wants,” or both.
• Marketing myopia - paying more attention to
the specific products than to the benefits and
experiences produced
• What if “a new product comes along that
serves the customer’s needs better or less
expensively??”
Copyright © 2017 Pearson Education, Inc. 1-10
 Customer Value and Satisfaction
• Customers form expectations about the value
and satisfaction of market offerings.
The difference between the value gained and the cost
of the product.
High customer value if customer gains more benefit.
Low customer value if customer gains less benefit.
• Setting the right level of expectations
• Low expectations may fail to attract buyers
• High expectations may disappoint buyers
Therefore,
• Satisfied customers buy again
• Dissatisfied customers switch to competitors
Copyright © 2017 Pearson Education, Inc. 1-11
 Exchanges and Relationships
• Exchange is the act of obtaining a desired
object by offering something in return.

• Marketing consists of creating, maintaining,

and growing desirable exchange relationships.
• Strong relationships are built by consistently
delivering superior customer value.

Copyright © 2017 Pearson Education, Inc. 1-12

 Markets

• All actual and potential buyers of a product

• Sellers and Consumers market

• Customer-managed relationships (two-way affair)

Copyright © 2017 Pearson Education, Inc. 1-13

Figure 1.2 - A Modern Marketing System

Copyright © 2017 Pearson Education, Inc. 1-14

 Designing a Customer Value-Driven
Marketing Strategy
• Marketing management: is the art and
science of Choosing target markets and
building profitable relationships

• Designing a winning marketing strategy

• Target market?
• Value proposition: is the set of benefits or
values it promises to deliver to
consumers to satisfy their needs

Copyright © 2017 Pearson Education, Inc. 1-15

 Designing a Customer Value-Driven
Marketing Strategy
• Market segmentation refers to dividing the markets into segments
of customers.
• Target marketing refers to which segments to go after.

Copyright © 2017 Pearson Education, Inc. 1-16

 Designing a Customer Value-Driven
Marketing Strategy
Choosing a value proposition - the company must decide how it will
differentiate and position itself in the marketplace.

Copyright © 2017 Pearson Education, Inc. 1-17