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An overview of
contemporary
marketing
Kotler | Armstrong

marketing 17e
 Chapter Outline
A. What is Marketing?
B. Understanding the Marketplace and
Customer Needs
C. Designing a Customer-Driven Marketing
Strategy
D. Preparing an Integrated Marketing Plan and
Program
E. Building Customer Relationships
F. Capturing Value from Customers
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 What is Marketing
Marketing is the process by which
companies create value for customers and
build strong relationships in order to
capture value from customers in return.

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 The Marketing Process
(5 steps)
Capture
Create value for customers and build value from
customer relationships customers
in return
Understand Design a Construct Build Capture
the customer- an profitable value from
marketplace driven integrated relationships customers
and marketing program and create to create
customer strategy that customer profits and
needs and delivers delight customer
wants superior equity
value

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 Marketing Process 1

Understand the marketplace and

customer needs and wants
5 core concepts:
i. Needs, wants and demands
ii. Market offerings (products, services and
experiences)
iii. Value and satisfaction
iv. Exchange and relationships
v. Markets 1- 5
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 (i) Customer Needs, Wants, and Demands

Needs

 Human needs are states of felt deprivation.

 These needs were not created by marketers.
 They are a basic part of the human makeup.

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 Customer Needs, Wants, and Demands
Wants
 Wants are the form human needs take as they
are shaped by culture and individual personality.
 Wants are shaped by one’s society and are
described in terms of objects that will satisfy
needs.

Demands
When backed by buying power, wants become
demands.
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 (ii) Market Offerings

Customer needs and wants are fulfilled

through market offerings.
These market
offerings can be:
 physical products
 services
 persons
 places
 organization
 information
 ideas
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 (iii) Customer value and Satisfaction

 Customers form expectations about the

value and satisfaction that various market
offerings will deliver and buy accordingly.
marketers
must be careful
to set the right
level of
expectations.
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 (iv) Exchanges and relationships
Exchange is the act of obtaining a desired
object from someone by offering something
in return.

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 (v) Markets

A market is the set of actual and potential buyers

of a product or service.
A Modern Marketing System

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 Marketing Process 2

Designing a Customer Driven Marketing Strategy

Marketing
management is
the art and science
of choosing target
markets and
building profitable
relationships with
them. 1 - 12

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 Selecting customers to serve
• The company must first decide whom
it will serve.
• It does this by dividing the market
into segments of customers.
• Next, selecting which segments it will
go after.

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 Choosing a Value Proposition
No one takes
me out
• Value proposition: The anymore.
set of benefits or values
a company promises to
deliver to consumers to You drink too
satisfy their needs much.

- Value propositions
Example: The smart car is
dictate how firms will
positioned as compact,
differentiate and
yet comfortable; agile, yet
position their brands in
economical; and safe, yet
the marketplace.
ecological. 1- 14

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 Marketing Management Orientations

(e)
(a) (b) (c) (d) Societal
Production Product Selling Marketing
concept concept concept concept marketing
concept

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 Marketing Management Orientations

(a) Production concept

 Consumers will favor products that are available and
highly affordable.

 This concept can lead to marketing myopia, which

refers to the mistake of paying more attention to the
specific products a company offers than to the
benefits and experiences produced by these products.
 Companies neglect to satisfy customer needs.
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 Marketing Management Orientations

(b) Product Concept

 Consumers will favor products that offer the most

quality, performance, and features.

This concept can also lead to

marketing myopia.

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 Marketing Management Orientations

(c) Selling concept

 The selling concept holds that consumers will not buy

enough of the firms products unless it undertakes a
large-scale selling and promotion effort.
 this concept focuses on creating sales transactions
rather than on building long-term, profitable customer
relationship.

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 Marketing Management Orientations
(d) Marketing Concept
 This concept holds that achieving organizational goals
depends on knowing the needs and wants of target
markets and delivering the desired satisfaction better than
competitors do.
 Customer focus and value are the
paths to sales and profits.
 The selling concept take an inside-out
perspective, while the marketing
concept take an outside-in perspective.
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 Marketing Management Orientations

(e) Societal Marketing Concept

 Organization will consider:
- consumers’ wants and long-run interests,
- the company’s requirements and
- society’s long-run interests.

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 Marketing Process 3
Preparing an Integrated Marketing Plan and Program
that will deliver the intended customer value.
Marketers combine and
balance four elements
when determining how
P P to satisfy customers’
needs for a product.

Marketing
Mix
P P 4Ps 1- 21
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 Marketing Environment
 The Environmental forces (PESTLE) that
surround the customer and affect the marketing
mix:
1. Political forces
2. Economic forces
3. Socio-cultural forces
4. Technological forces
5. Legal and regulatory forces
6. Environmental (Physical) forces
 Competitive forces
 The marketing environment is dynamic
 An organization has no control over these forces
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© Noel Capon, 2014
 Marketing Process 4
Building profitable Customer Relationships

Customer Relationship Management (CRM) is

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. 1 - 23

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 Customer Value

 Customer-perceived value is the customer’s

evaluation of the difference between all the benefits
and all the costs of a market offering relative to
those of competing offers.
Customer Customer
Value
benefit costs

 Customers often do not judge values and costs

“accurately or objectively.”
 They act on perceived value 1- 24

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 Customer Satisfaction
• Customer satisfaction – The extent to which a
product’s perceived performance matches a
buyer’s expectations.
 If the product’s performance falls short of
expectations, the customer is dissatisfied.
 If the product’s performance matches
expectations, the customer is satisfied.
 If the product’s performance exceeds
expectations, the customer is highly satisfied or
delighted.
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 Marketing Process 5
Capturing Value from Customers

Creating Growing Share

Customer of Customer
Loyalty and
Retention
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 Creating customer loyalty and retention
• Good customer relationship management (CRM)
creates customer satisfaction.
• In turn, satisfied customers remain loyal and talk
favorably to others about the company and its
products.

Growing share of customer

• Good CRM can help marketers increase their share
of customer (increase market share).
• Firms can create programs to cross-sell and up-sell
to market more products to existing customers.
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 The End!

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