Marketing

and Customer Value

01
What is Marketing?
Marketing Defined

Marketing is a process by which

companies
create value for customers
and build strong customer
relationships in order to capture
value from customers in return.

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What is Marketing?
Marketing Process

3
What motivates a
consumer to
take action?

4
Understanding the Marketplace and Customer Needs
Customer Needs, Wants, and Demand

• Needs are states of felt deprivation.

• Wants are the form human needs take
as they are shaped by culture and
individual personality.
• Demands are human wants that are
backed by buying power.

5
Understanding the Marketplace and Customer Needs
Market offerings and Marketing myopia
• Market offerings are some
combination of products, services,
information, or experiences offered
to a market to satisfy a need or
want.
• Marketing myopia is focusing only
on existing wants and losing sight
of underlying consumer needs.

6
Understanding the Marketplace and Customer Needs
Marketing Myopia
• Management’s failure to recognize a company’s scope of
business.

• Paying more attention to the specific products it offers than

to the benefits and experiences produced by the products.

• Focusing on the “wants” and lose sight of the “needs.”

7
“What Business are You Really in?”
Company Myopic Description
“We are
in the video game business”
Marketing-Oriented
Description
“We are in the
entertainment business”

“We are “We are in the

in the airline business” transportation business”

“We are “We are a communication

a telephone company” company”

“We are in the stock “We are in the financial

brokerage business” service business”

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9
 Marketing Myopia: Summary

“What else can “What else can we

we make?” do for our
customers?”

Organizations have to define their products not

as what the companies make or produce but
what they do to satisfy customers.

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Understanding the Marketplace and Customer Needs
Exchange and Market
• Exchange is the act of obtaining a desired object from someone by
offering something in return.
• Marketing actions try to create, maintain, and grow desirable exchange
relationships.
• A market is set of actual and potential buyers.
• Consumers market when they:
• search for products
• interact with companies to obtain information
• make purchases

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Understanding the Marketplace and Customer Needs
A Modern Marketing System (Figure 1.2)

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Designing a Customer Value-Driven Marketing Strategy
Marketing Management
• Marketing management is the art and science of choosing
target markets and building profitable relationships with
them.
• What customers will we serve (target market)?
• How can we best serve these customers
(value proposition)?

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Designing a Customer Value-Driven Marketing Strategy
Value Proposition
• A brand’s value proposition is the set
of benefits or values it promises to
deliver to customers to satisfy their
needs.
• Value propositions differentiate one brand
from another.
• They answer the customer’s question,
“Why should I buy your brand rather than a
competitor’s?”
• Companies must design strong value
propositions that give them the greatest
advantage in their target markets.

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Designing a Customer Value-Driven Marketing Strategy
Marketing Mix : 4Ps
• The marketing mix is comprised of a set of tools known a
the four Ps:
• product
• price
• promotion
• place
• Integrated marketing program—a comprehensive plan that
communicates and delivers intended value

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Managing Customer Relationships and Capturing Customer Value
Customer relationship management
• Customer relationship management—the overall process of
building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.

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 What will satisfy
consumer’s needs and
wants?

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Customer Value

A> Customer value (provided by product

and service):

benefit that the customer gains from

owning and using a product/ service
compared to the cost of obtaining the
product/service

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Managing Customer Relationships and Capturing Customer Value
Customer relationship management
• Customer relationship management—the overall process of
building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.

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Managing Customer Relationships and Capturing Customer Value
Customer-Perceived Value and Satisfaction

Customer- Customer
perceived value satisfaction

• The difference • The extent to

between total which perceived
customer performance
perceived matches a
benefits and buyer’s
customer cost expectations

21
The Changing Marketing Landscape
The Digital Age: Online, Mobile, and Social Media Marketing
• Digital and social media
marketing involves using digital
marketing tools such as web sites,
social media, mobile ads and
apps, online videos, e-mail, and
blogs that engage consumers
anywhere, at any time, via their
digital devices.

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The Changing Marketing Landscape
• Not-for-profit marketing growth
• Rapid globalization
• Sustainable marketing

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So, What Is Marketing? Pulling It All Together

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Capturing Value from Customers
How do consumers obtain
products?

Marketer
Consumer
(Needs-
Satisfying
(Needs)
Goods)

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 Through “Exchange”
• the transfer of goods, services, or ideas in return for
something of value

GOODS PAYMENT

Marketer Customer
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 Marketing as Exchange of Values
• between two parties to arrive at mutually beneficial
outcomes.
• The goal of marketing is to facilitate exchanges.

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 Examples of Exchanges
Food
McDonald’s Consumer
Money

Loan/Accounts
Bank Company

Politician Voters
Votes

Education/Social interaction
College Students
Tuition

Info and help on drug abuse

Anti-drug
Drug User
Group Decreasing the use of drugs
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 What is Marketed?

• Goods • Places and

• Services properties
• Events and • Organizations
experiences • Information
• Persons • Ideas

Marketable Entities
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“Marketing is now central to success at any company in
any business, and it’s going to make the difference
between winners and losers.”

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 Big Task:
Developing Marketing Strategies
and Plans

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A Framework for Marketing
Management: 3Cs + 4Ps

• 3 Cs • 4 Ps
– Customer – Product
– Company – Price
– Competitor – Place
– Promotion

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Customer Analysis
• Who will be our customers?
IKEA targets the customer who is …
• Segmentation, Market size, growth, etc.
• Why would they buy?
• Buying motives, criteria
• When would they buy?
• Age, replacement cycle
• Where would they buy?
• Distribution outlets
• How would they buy?
• $, time expenditures
• Who are in the decision making unit (DMU)?
• Initiator, Decider, Influencer, Purchaser, User.
Company Analysis
• What will be our basis for
competitive advantage?
• What resources do we have?
• What is our mission?
• What is our uniqueness? “ to offer a wide range of home furnishing
items of good design and function,
excellent quality and durability, at prices so
low that the majority of people can afford
to buy them (IKEA 1994).”
Competitive Advantage
• Unique strength relative to competitors

• Advantage over competitors gained by offering consumers

greater value than competitor's offer.
Sources of Competitive Advantages
• List a number of ways a company can get customers to buy
from them rather than their competitors.

• And then, Indicate which methods are sustainable -- i.e.,

difficult for competitors to match easily.
Sources of “Sustainable” Competitive Advantage
• Cost Leadership
• Lower production and distribution costs
• Differentiation
• A highly differentiated product line or marketing program
• Focus
• Efforts is focused on serving a few market segments
Competitor Analysis
• Who would be our competitors?
• How should we compete?
• Who would be potential
competitors?
 Marketing Analysis : SWOT

S W
Strengths Weaknesses

INTERNAL
Market Growth Rate

O T
Opportunities Threats
EXTERNAL

POSITIVE NEGATIVE
Relative Market Share
SWOT analysis: a summary of the ideas developed in the situation analysis, which allows managers to focus
clearly on the meaningful strengths (S) and weaknesses (W) in the firm’s internal environment and
opportunities (O) and threats (T) coming from outside the firm (the external environment).