Marketing - Creating and Capturing Customer Value: Global Edition

Global Edition
Marketing - Creating and

Capturing Customer
Chapter
Value
1
Rest Stop: Previewing the

Concepts
Define marketing and outline the
steps in the marketing process

Explain the importance of
understanding customers and the
marketplace and identify the five
core marketplace concepts
Identify the key elements of a
customer-driven marketing strategy
Copyright 2013, Pearson Education
1-2
Rest Stop: Previewing the

Concepts
Discuss customer relationship
management and identify strategies

for creating value for customers and
capturing value from customers in
return
Describe the major trends and forces
that are changing the marketing
landscape in this age of relationships
1-3
First Stop: FlyDubai: Simplicity is

Key
FlyDubai aims to please their
customers by creating value so they

leave the plane looking forward to
their next flight.
FlyDubai believes that a customer
relationship is the secret to a
successful business and simplicity is
the key.
1-4
What Is Marketing?
The process by which companies
create value for customers and build

strong customer relationships in
order to capture value from
customers in return
Goals
Attract new customers by promising
superior value
Keep and grow current customers by
delivering satisfaction
1-5
Marketing
1-6
Figure 1.1 - A Simple Model of the

Marketing Process
1-7
Understanding the
Marketplace
and Customer Needs
Marketers must understand five core
customer and marketplace concepts:

Needs, wants, and demands
Market offerings ( products , services ,
and experiences )
Value and satisfaction
Exchanges and relationships
Markets
1-8
1-9
Customer Needs, Wants,

and Demands
Types of needs
Physical needs
Food, clothing, warmth, and safety
Social needs
Belonging and affection
Individual needs
Learning, knowledge, and self-expression
1-10
1-11
Market OfferingsProducts,
Services, and Experiences
Not limited to
physical
products
Include entities
such as persons ,
places ,
organizations,
information, and
ideas
The U.S. Forest Service markets

the idea of reconnecting young
people with exploring the joys of
nature firsthand
1-12
1-13
Customer Value and

Satisfaction
Customers form expectations about
the value and satisfaction that
various market offerings will deliver
If marketers set expectations too low,

they may satisfy those who buy but fail
to attract enough buyers
If marketers set expectations too high,
buyers will be disappointed
1-14
Exchanges and
Relationships
Exchange: The act of obtaining a
desired object from someone by
offering something in return
Relationships
Marketing actions build and maintain

exchange relationships with target
audiences involving an idea, product,
service, or other object
Marketers build strong relationships by
consistently delivering superior
customer value
1-15
1-16
Figure 1.2 - A Modern Marketing

System
1-17
Designing a Customer-Driven
Marketing Strategy
Designing a winning marketing
strategy requires answers to the

following questions:
What customers will we serve (whats
our target market)?
How can we serve these customers best
(whats our value proposition)?
1-18
1-19
Selecting Customers to
Serve
Market segmentation - Dividing the
market into segments of customers

Target marketing - Selecting one or
more segments to cultivate
1-20
Choosing a Value
Proposition
Value
proposition:
The set of
benefits or
values a
company
promises to
deliver to
consumers to
satisfy their
needs
The smart car is positioned

as compact, yet comfortable;
agile, yet economical; and
safe, yet ecological.
1-21
Marketing Management
Orientations
Organizations design and carry out
their marketing strategies under five

alternate concepts:
Production concept
Product concept
Selling concept
Marketing concept
Societal Marketing concept
1-22
The Production Concept

Consumers will favor products that
are available and highly affordable

The organization should focus on
improving production and distribution
efficiency
1-23
The Product Concept

Consumers will favor products that
offer the most quality, performance,

and features
The organization should devote its
energy to making continuous product
improvements
1-24
The Selling Concept

Consumers will not buy enough of
the firms products unless the firm

undertakes a large-scale selling and
promotion effort
1-25
The Marketing Concept

Achieving organizational goals
depends on knowing the needs and

wants of target markets and
delivering the desired satisfactions
better than competitors do
1-26
Figure 1.3 - The Selling and

Marketing Concepts Contrasted
1-27
1-27
The Societal Marketing

Concept
A companys marketing decisions
should consider consumers wants,

the companys desires, consumers
long-run interests and societys longrun interests
1-28
1-28
The Societal Marketing

Concept
Calls for sustainable
marketingsocially
and environmentally
responsible
marketing that
meets the present
needs of consumers
while also
preserving the
ability of future
generations to meet
their needs
According to UPS, social

responsibility isnt just
good for the planet. Its
good for business.
1-29
Figure 1.4 - The Considerations

Underlying the Societal Marketing
Concept
1-30
Preparing an Integrated
Marketing
Plan and Program
Marketing mix tools
Product
Price
Place (Distribution)
Promotion
The firm must blend each marketing

mix tool into a comprehensive
integrated marketing program
1-31
1-32
1-33
1-34
Customer Satisfaction
For companies
interested in
delighting
customers,
exceptional
value and
service become
part of the
overall company
culture
1-35
Marketing at Work
Abu Dhabi-based
company, AWT,
is fast becoming
a knowledge
intensive trading
organization in
the oil and gasrelated sector.
1-36
Customer Relationships
Firms may choose to
build relationships
at different levels
Loyalty and
retention programs
to build
relationships include
Frequency marketing
programs
Club marketing
programs
JetBlue Airways offers its

TrueBlue members frequentflyer points they can use on
any seat on any JetBlue
flight with no blackout dates
1-37
The Changing Nature of

Customer
Relationships
Customer
profitability
analysis
eliminates losing
customers and
selects profitable
ones with whom
relationships
should be
developed
1-38
Changing Nature of
Relationships
Firms interact
with customers
using new
technologies
such as social
networking,
e-mail, Web
sites, blogs, cell
phones, and
video sharing
Cold Stone Creamery uses a

variety of social media to
engage customers on a more
personal, interactive level
1-39
1-40
Consumer-Generated
Marketing
Brand exchanges
created by
consumers by
which consumers
play an
increasing role in
shaping their
own brand
experiences and
those of other
consumers
Harnessing consumer-generated
marketing: H. J. Heinz invited
consumers to submit homemade
ads for its ketchup brand on
YouTube
1-41
Partner Relationship
Management
Working closely with others inside
and outside the company to jointly

bring more value to customers
Partners inside the firm:
Cross-functional teams
Partners outside the firm:

Supply chain and channel partners
1-42
1-43
Capturing Value From

Customers
Superior
customer value
leads to highly
satisfied loyal
customers who
buy more
Stew Leonards customer service policy
emphasizes the importance of bringing
customers back to the stores for repeat
sales
1-44
Customer Equity
The total
combined
customer
lifetime values
of all the
companys
current and
potential
customers
To increase customer lifetime

value
and customer equity, Cadillac
needs to make the Caddy cool
again by
targeting a younger
generation of customers
1-45
1-45
Figure 1.5 - Customer

Relationship Groups
1-46
The Changing Marketing

Landscape
Economic
uncertainties
Growth in digital
technology
Rapid
globalization
Sustainable
marketing
Growth of not-forprofit marketing
In the current economic

environment, companies must
emphasize the value in their
value propositions, as Target
did when it shifted the balance
more toward the Pay Less
half of its Expect More. Pay
Less positioning
1-47
Marketing at Work
The recession from
2008 to 2009
undermined
consumer
confidence
The post-recession
era has seen a shift
in spending
patterns, with
consumers
becoming more
frugal
Even as the economy

strengthens, rather than
reverting to their old freespending ways, consumers are
now showing an enthusiasm
for sensible consumption not
seen in decades
1-48
Figure 1.6 - An Expanded

Model of the Marketing Process
1-49
Rest Stop: Reviewing the

Concepts
Define marketing and outline the
steps in the marketing process

Explain the importance of
understanding customers and the
marketplace and identify the five
core marketplace concepts
Identify the key elements of a
customer-driven marketing strategy
1-50
Rest Stop: Reviewing the

Concepts
Discuss customer relationship
management and identify strategies

for creating value for customers and
capturing value from customers in
return
Describe the major trends and forces
that are changing the marketing
landscape in this age of relationships
1-51
All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright 2013 Pearson Education
1-52

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Global Edition

Marketing - Creating and

Rest Stop: Previewing the

steps in the marketing process

Copyright 2013, Pearson Education

Rest Stop: Previewing the

management and identify strategies

Copyright 2013, Pearson Education

First Stop: FlyDubai: Simplicity is

customers by creating value so they

Copyright 2013, Pearson Education

create value for customers and build

Copyright 2013, Pearson Education

Figure 1.1 - A Simple Model of the

Copyright 2013, Pearson Education

Marketers must understand five core

customer and marketplace concepts:

Copyright 2013, Pearson Education

Copyright 2013, Pearson Education

Customer Needs, Wants,

Copyright 2013, Pearson Education

Copyright 2013, Pearson Education

The U.S. Forest Service markets

Copyright 2013, Pearson Education

Customer Value and

If marketers set expectations too low,

Copyright 2013, Pearson Education

Marketing actions build and maintain

Copyright 2013, Pearson Education

Figure 1.2 - A Modern Marketing

Copyright 2013, Pearson Education

strategy requires answers to the

Copyright 2013, Pearson Education

Copyright 2013, Pearson Education

market into segments of customers

Copyright 2013, Pearson Education

The smart car is positioned

their marketing strategies under five

Copyright 2013, Pearson Education

The Production Concept

are available and highly affordable

Copyright 2013, Pearson Education

The Product Concept

offer the most quality, performance,

Copyright 2013, Pearson Education

The Selling Concept

the firms products unless the firm

Copyright 2013, Pearson Education

The Marketing Concept

depends on knowing the needs and

Copyright 2013, Pearson Education

Figure 1.3 - The Selling and

Copyright 2013, Pearson Education

The Societal Marketing

should consider consumers wants,

Copyright 2013, Pearson Education

The Societal Marketing

According to UPS, social

Figure 1.4 - The Considerations

Copyright 2013, Pearson Education

Marketing mix tools

The firm must blend each marketing

Copyright 2013, Pearson Education