Creating and Capturing Customer

Value
Topic Outline
▪ What Is Marketing?
▪ Understand the Marketplace and Customer Needs
▪ Designing a Customer-Driven Marketing Strategy
▪ Preparing an Integrated Marketing Plan and
Program
▪ Building Customer Relationships
▪ Capturing Value from Customers
▪ The Changing Marketing Landscape
 What is Marketing?

Marketing is an organizational function

and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.

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 What is Marketed?

• Goods/
commodity

• Services/ Car
wash

• Events/ World
Cup

•Experiences/
40 ys. in business

• Persons
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 What is Marketed?

• Places/ Vegas
•Organizations/
Human Rights Org

• Information/
how to stop smoking

• Ideas/ democracy

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 Definition

PRODUCT: A product is anything that can

be offered to satisfy a need or want.
Products are a bundle of solutions
Products may be physical goods, services or ideas.
 Definition

VALUE:
Value is the consumer’s estimate of the
product's overall capacity to satisfy his or her
needs.
Value is the satisfaction of customer
requirements at the lowest possible cost of
acquisition, ownership and use.
 Definition
Transaction:
is a trade of values between two or more parties.
A transaction involves several dimensions:
-at least two things of value.
-agreed upon conditions.
-a time of agreement.
-a place of agreement.
Marketing Process
 Understanding the Marketplace

and Customer Needs.

Core Concepts

▪ Needs, wants, and ▪ Marketing channels

demands ▪ Markets
▪ Market Offerings and
brands ▪ Exchange and
▪ Value and relationships
satisfaction

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 Customer Needs, Wants, and Demands


Needs
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression

Wants
• Form that needs take as they are shaped by culture and
individual personality

Demands
• Wants backed by buying power

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Market Offerings and Brands

Market offerings are some combination of products, services, information

, or experiences offered to a market to satisfy a need or want
Marketing myopia the mistake of paying more attention to the specific
products a company offers than to the benefits and experiences produced by
these products.

A brand is an offering from a known source. A brand name such as

McDonald’s carries many associations in people’s minds that make
up its image: hamburgers, cleanliness, convenience, courteous
service, and golden arches. All companies strive to build a brand
image with as many strong, favorable, and unique brand associations
as possible.

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 Customer Value and Satisfaction

▪ Satisfied customers buy again and tell others about

their good experiences. Dissatisfied customers often
switch to competitors and disparage the products to
others.
▪ Note: Marketers must be careful to set the right
level of expectations – Plz. discuss…..
 Marketing Channels

Communication

Distribution

Service/ pre, pro, with selling

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 Exchange
Exchange is the act of obtaining a desired object from someone by
offering something in return

There are five conditions for exchange:

1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the
other party.

Exchange:
Process + Agreement = Transaction
 Markets
Markets are the set of actual and
potential buyers of a product

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A Modern Marketing System
 Designing a Customer-Driven
Marketing Strategy

Marketing management is the art and science

of choosing target markets and building
profitable relationships with them
▪ What customers will we serve?

▪ How can we best serve these customers?

Designing a Customer-Driven
Marketing Strategy
1. Selecting Customers to Serve

Market segmentation refers to dividing the

markets into segments of customers
Target marketing refers to which segments to
go after
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is not to
destroy demand but to reduce or shift it
Designing a Customer-Driven
Marketing Strategy
2. Choosing a Value Proposition

The value proposition is the set of

benefits or values a company promises to
deliver to customers to satisfy their needs

Example:
BMW: Promises the ultimate driving machine.
Iphone: touching is believing.
Nokia: connecting people anyone, anywhere,
and
 Designing a Customer-Driven
Marketing Strategy
3. Marketing Management Orientations

Product Marketi
Product Selling Societal
ion ng
concept concept concept
concept concept
 

Designing a Customer-Driven Marketing
Strategy

Marketing Management Orientations

Production concept The production concept is one of

the oldest concepts in business. It holds that
consumers prefer products that are widely available
and inexpensive. Managers of production-oriented
businesses concentrate on achieving high production
efficiency, low costs, and mass distribution.
 

Designing a Customer-Driven Marketing
Strategy

Marketing Management Orientations

Product concept The product concept proposes that

consumers favor products offering the most quality,
performance, or innovative features.
.
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept The selling concept holds that

consumers will not buy enough of the
organization’s products unless it undertakes a
large scale selling and promotion effort . It is
practiced most aggressively with unsought goods—
goods buyers don’t normally think of buying such
as insurance—and when firms with overcapacity
aim to sell what they make, rather than make what
the market wants.
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Marketing concept The marketing

concept emerged in the mid-1950. The
job is to find not the right customers for
your products, but the right products for
your customers.
Marketing Management Orientations

Societal
Production Product Selling Marketing
Marketing
concept Concept concept Concept
Concept
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing concept is the idea that a

company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’ long-
term interests, and society’s long-run interests
 Preparing an Integrated Marketing
Plan and Program
The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy. It includes product, price,
promotion, and place.
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended value to chosen
customers.
 The Marketing Mix

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Building Customer Relationships
Customer Relationship Management (CRM)
The overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction
 Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction Customer value: A customer buys from the firm that offer the highest perceived value.
Customer perceived Value: The customer evaluation of the difference between all the benefits and all the cost of a marketing offer relative to those of competing offers.

Customer- Customer
perceived satisfaction
value • The extent
• The to which a
difference product’s
between perceived
total performanc
benefits
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 Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships

Full Partnerships

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 Building Customer Relationships

Partner relationship 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 Relationship Management
▪ Partners inside the company is every
function area interacting with customers
▪ Electronically

▪ Cross-functional teams

▪ Partners outside the company is how

marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
Building Customer Relationships
Partner Relationship Management
▪ Supply chain is a channel that stretches from
raw materials to components to final
products to final buyers
▪ Supply management
▪ Strategic partners
▪ Strategic alliances
 Capturing Value from Customers

Creating Growing Building

Customer Share of Customer
Loyalty and Customer Equity
Retention
 1. Customer Loyalty and Retention

• Satisfied customers remain loyal.

• Talk favorably to others about the company and its products.
• Its five times cheaper to keep an old customer than to
acquire a new one.
• Loosing the customer means losing the entire stream of
purchases that customer would make over a lifetime of
patronage.
Customer lifetime value: The value of the entire stream of
purchases that customer would make over a lifetime of
patronage.
 2. Growing Share of Customer

• Good Customer Relationship Management can help marketers to

increase their share of customer – the share they get of the
customer’s purchasing in their product categories for ex.,
Supermarkets and Restaurants want to get more “share of
stomach” Car companies want to increase “share of garage” and
airlines want greater “share of travel”
Share of Customer: The portion of the customer’s purchasing that a
company gets in its product categories.
 3. Building Customer Equity

Customer equity: is the total combined customer

lifetime values of all the company‘current and
potential customers.
 The Changing Marketing
Landscape

1. The Digital Age

2. Rapid Globalization

3. The call for more ethics and social responsibility

4. The Growth of not for Profit Marketing