

Chapter 1
Marketing:
Creating  “Today’s successful companies have
and one thing in common: they are strongly

Capturing customer focused and heavily committed
to marketing”
Customer
Value

Principles of Marketing
Philip Kotler, Gary Armstrong
  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

Creating and Capturing Customer Value

2
 
What Is Marketing?

 Marketing is a
process by which
companies create
value for customers
and build strong
Creating and Capturing Customer Value

customer
relationships to
capture value from
customers in return
 

 Marketing is about
managing profitable
customer relationships
 The twofold goal of
What Is marketing is-
Marketing?
 Attracting new
Creating and Capturing Customer Value

customers
 Retaining and growing
current customers
 
What Is
Marketing?
 The Marketing Process
Creating and Capturing Customer Value


Creating and Capturing Customer Value

 
Understanding the Marketplace
and Customer Needs

Customer Needs,
Wants, and Demands
Creating and Capturing Customer Value
 Understanding
 the
Marketplace and
Customer Needs

Market Offerings

Combination of products,
services, information, or
experiences offered to a
Creating and Capturing Customer Value

market to satisfy a need or

want
 
Understanding the Marketplace
and Customer Needs

Marketing Myopia
Focusing only on existing wants and losing sight of
underlying consumer needs
Creating and Capturing Customer Value

https://www.youtube.com/watch?v=hw8FfogTUhU
 
Understanding the Marketplace
and Customer Needs

Marketing Myopia

Company Case
Kodak “World’s biggest producer of film for still
and motion picture cameras.”
Creating and Capturing Customer Value

Fujifilm “Saw the opportunity in the new market

and focused on developing cameras with
a remarkable image quality feature.”
 Understanding
 the
Marketplace
and Customer
Needs

 Customer
Value and
Satisfaction
Creating and Capturing Customer Value
 
Understanding the Marketplace
and Customer Needs

Exchange is the act of obtaining a desired object from

someone by offering something in return

Marketers want to build and

maintain strong exchange
relationships by continuously
delivering superior customer
value

Creating and Capturing Customer Value

 
Understanding the Marketplace
and Customer Needs

Markets are the set of actual and potential

buyers of a product

Arrows represent
relationships that must be
developed and managed to
create customer value and
profitable customer
relationships

Creating and Capturing Customer Value

  Designing a Customer Value-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?

Creating and Capturing Customer Value

 
Designing a Customer Value-Driven
Marketing Strategy

Selecting Customers to Serve

Market segmentation refers to dividing the

markets into segments of customers

Target marketing refers to which segments to go

after

Creating and Capturing Customer Value

 
Designing a Customer Value-Driven
Marketing Strategy

Choosing a Value Proposition

Value – The tangible or intangible Value proposition – Set of benefits

benefits a customer receives from or values a company promises to
buying a product or service deliver to customers to satisfy their
needs

Creating and Capturing Customer Value

 
Designing a Customer Value-Driven
Marketing Strategy

Marketing Management Orientations

Creating and Capturing Customer Value

https://www.youtube.com/watch?v=pJOTp6t-c8A
  Designing a Customer Value-Driven
Marketing Strategy

Marketing Management Orientations

Production concept is the idea that consumers will favor
products that are available and highly affordable, therefore,
the organization should focus on improving production and
distribution efficiency.

May lead to Marketing myopia!

Creating and Capturing Customer Value

  Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Product concept is the idea that consumers will favor

products that offer the most quality, performance, and
features. Organization should therefore devote its energy to
making continuous product improvements.

Creating and Capturing Customer Value

 
Designing a Customer Value-Driven
Marketing Strategy

Marketing Management Orientations

Selling concept is the idea that consumers will not buy

enough of the firm’s products unless it undertakes a large-
scale selling and promotion effort.

Creating and Capturing Customer Value

  Designing a Customer Value-Driven
Marketing Strategy

Marketing Management Orientations

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.

Creating and Capturing Customer Value

 
Designing a Customer Value-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.

Creating and Capturing Customer Value

 Designing a Customer Value-Driven
Marketing Strategy

Creating and Capturing Customer Value

  Preparing an Integrated Marketing
Plan and Program

Integrated marketing program: comprehensive

plan that communicates and delivers the
intended value to chosen customers. The plan is
executed via using the marketing mix.
The marketing mix: set of tools (four Ps) the firm
uses to implement its marketing strategy. It
includes product, price, promotion, and place.

Creating and Capturing Customer Value

  Building Customer Relationships
Relationship Building Blocks: Customer Value and
Satisfaction

Creating and Capturing Customer Value

  Building Customer Relationships

Customer Relationship Management

The overall process of building and maintaining profitable

customer relationships by delivering superior customer value and
satisfaction. It deals with all aspects of acquiring, keeping and
growing customers.

Creating and Capturing Customer Value

  Building Customer Relationships
Today’s Changing Nature of Customer Engagement

Customer Relationship Customer-managed

Management (CRM) Relationships

Customer-managed relationships

Marketing relationships in which

customers, empowered by today’s new

digital technologies, interact with

companies and with each other to shape

their relationships with brands.

Creating and Capturing Customer Value

  Building Customer Relationships

Today’s Changing Nature of Customer Engagement

 Yesterday’s companies focused more on mass marketing

to broad segments of customers at arm’s length

 Today’s marketers go for interactive marketing using online,

mobile and social media marketing

Creating and Capturing Customer Value

  Building Customer Relationships

Customer-engagement marketing

Consumer-generated marketing

Marketers utilize fan-made ads to create buzz

in social media, to play an active role in
shaping ads and brand content, to contribute
in designing new product.

Creating and Capturing Customer Value

  Building Customer Relationships

Customer Relationship Levels and Tools

Basic
Relationships
Full
Partnerships

Creating and Capturing Customer Value

  Building Customer Relationships

Partner Relationship Management

Partner relationship management involves

working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers

Creating and Capturing Customer Value

  Building Customer Relationships

Partner Relationship Management

 Working closely with others inside and outside of the
company.

 In today’s more connected world every functional area of

a company can connect with the customers.

 Marketers must also partner with suppliers, channel

partners and others outside the company.

Creating and Capturing Customer Value

  Capturing Value from Customers

Creating Customer Loyalty and Retention

 Customer lifetime value is the value of the entire stream of
purchases that the customer would
make over a lifetime of patronage

Creating and Capturing Customer Value

 
Capturing Value from Customers

Growing Share of Customer

Share of customer is the portion of the customer’s

purchasing that a company gets in its product categories

Creating and Capturing Customer Value

 
Capturing Value from Customers

Customer Equity
Customer equity is the total combined customer lifetime
values of all of the company’s customers

Creating and Capturing Customer Value