191-MKT 211

Module 1- Understanding Importance of

Marketing and value proposition
(Chapter-01)
(Week 1-3)

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Chapter 1- slide 1
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 Creating and Capturing Customer
Value
Topic Outline

1. Define marketing and outline the steps in the

marketing process
2. Who does marketing?
3. Why study marketing?
4. The value proposition
5. Market Research and information

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Chapter 1- slide 2
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 What Is Marketing ?
(On page 29 of the Book)

• Marketing is managing profitable customer

relationships

• The aim of marketing is to create value for

customers and capture value from
customers in return

• Marketing is not only “telling and selling” but

satisfying customer needs
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Chapter 1- slide 3
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 Zappos
Zappos ( the Spanish word meaning "shoes." ) is an American online shoe and clothing retailer based
in Las Vegas, Nevada, USA.

We actually take a lot of the money that we would have normally

spent on paid advertising and put it back into the customer experience
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Chapter 1- slide 4
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 WHAT Is Marketing? SLOGANS

• Walmart - “Save money. Live better.”

• Nintendo - “Wii would like to play,”

• McDonald’s - “i’m lovin’ it” motto by being

“our customers’ favorite place and way to
eat”

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Chapter 1- slide 5
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 WHO does Marketing?
For-profit companies like McDonald’s, Procter & Gamble (the makers of
Tide detergent and Crest toothpaste), and Walmart.

• For example, McDonald’s creates a new breakfast chicken sandwich

for $1.99 (the offering), launches a television campaign
(communicating), makes the sandwiches available on certain dates
(delivering), and then sells them in its stores (exchanging).

• When Procter & Gamble (or P&G for short) creates a new Crest tartar
control toothpaste, it launches a direct mail campaign in which it
sends information and samples to dentists to offer to their patients.

• P&G then sells the toothpaste through retailers like Walmart, which
has a panel of consumers sample the product and provide feedback
through an online community. These are all examples of marketing
activities.

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Chapter 1- slide 6
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 Non-profit organization

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Chapter 1- slide 7
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 WHO does Marketing?
Nonprofit organizations also engage in marketing.
• When the American Heart Association (AHA) created a heart-healthy diet for
people with high blood pressure, it bound the diet into a small book, along with
access to a special Web site that people can use to plan their meals and record
their health-related activities.
• The AHA then sent copies of the diet to doctors to give to patients. When does an
exchange take place, you might be wondering? And what does the AHA get out of
the transaction? From a monetary standpoint, the AHA does not directly benefit.
Nonetheless, the organization is meeting its mission, or purpose, of getting people
to live heart-healthy lives and considers the campaign a success when doctors
give the books to their patients.
• The point is that the AHA is engaged in the marketing activities of creating,
communicating, delivering, and exchanging. This won’t involve the same kind of
exchange as a for-profit company, but it is marketing. When a nonprofit
organization engages in marketing activities, this is called nonprofit marketing.
Some schools offer specific courses in nonprofit marketing, and many marketing
majors begin their careers with nonprofit organizations.

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Chapter 1- slide 8
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 WHY study Marketing?
• Marketing Enables Profitable Transactions- Products don’t, contrary to popular
belief, sell themselves. Generally, the “build it and they will come” philosophy
doesn’t work. Good marketing educates customers so that they can find the
products they want, make better choices about those products, and extract the
most value from them. In this way, marketing helps facilitate exchanges between
buyers and sellers for the mutual benefit of both parties.
• Marketing Delivers Value- Not only does marketing deliver value to customers,
that value translates into value of the firm as it develops a reliable customer
base, increases its sales, and profitability. So when we say that marketing
delivers value, marketing delivers value to both the customer and the company.
• Marketing Benefits Society -Marketing benefits society in general by improving
people’s lives in two ways. First, as we mentioned, it facilitates trade. In addition,
because better marketing means more successful companies, jobs are created.
This generates wealth for people, who are then able to make purchases, which,
in turn, creates more jobs.

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Chapter 1- slide 9
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 Why study Marketing?

• Marketing Costs Money- Marketing can sometimes be the largest

expense associated with producing a product. In the soft drink business,
marketing expenses account for about one-third of a product’s price—
about the same as the ingredients used to make the soft drink itself. At the
bottling and retailing level, the expenses involved in marketing a drink to
consumers like you and me make up the largest cost of the product.
• Marketing Offers People Career Opportunities-Marketing is the interface
between producers and consumers. In other words, it is the one function
in the organization where the entire business comes together. Being
responsible for both making money for your company and delivering
satisfaction to your customers makes marketing a great career. In
addition, because marketing can be such an expensive part of a business
and is so critical to its success, companies actively seek good marketing
people. As you will learn, there’s a great variety of jobs available in the
marketing profession. These positions represent only a few of the
opportunities available in marketing.

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Chapter 1- slide 10
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 Why study Marketing?
• Marketing research- Personnel in marketing research are responsible for
studying markets and customers in order to understand what strategies or
tactics might work best for firms.

• Merchandising- In retailing, merchandisers are responsible for developing

strategies regarding what products wholesalers should carry to sell to
retailers such as Target and Walmart.

• Sales- Salespeople meet with customers, determine their needs, propose

offerings, and make sure that the customer is satisfied. Sales departments
can also include sales support teams who work on creating the offering.

• Advertising- Whether it’s for an advertising agency or inside a company,

some marketing personnel work on advertising. Television commercials
and print ads are only part of the advertising mix. Many people who work
in advertising spend all their time creating advertising for electronic media,
such as Web sites and their pop-up ads, podcasts, and the like.

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Chapter 1- slide 11
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 Why study Marketing?
• Product development- People in product development are responsible
for identifying and creating features that meet the needs of a firm’s
customers. They often work with engineers or other technical
personnel to ensure that value is created.
• Direct marketing- Professionals in direct marketing communicate
directly with customers about a company’s product offerings via
channels such as e-mail, chat lines, telephone, or direct mail.
• Event marketing- Some marketing personnel plan special events,
orchestrating face-to-face conversations with potential and current
customers in a special setting.
• A career in marketing can begin in a number of different ways. Entry-
level positions for new college graduates are available in many of the
positions mentioned above. A growing number of CEOs are people
with marketing backgrounds. Some legendary CEOs like Ross Perot
and Mary Kay Ash got their start in marketing. More recently, CEOs
like Mark Hurd, who runs Hewlett-Packard, and Jeffrey Immelt at GE
are showing how marketing careers can lead to the highest pinnacles
of the organization.

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Chapter 1- slide 12
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 Understanding the Marketplace
and Customer Needs
5 Core Customer & Marketplace Concepts

1. Customer needs, wants, and demands

2. Market offerings
3. Customer Value and satisfaction
4. Exchanges and relationships
5. Markets

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Chapter 1- slide 13
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 Understanding the Marketplace
and Customer Needs
(On page 30 of the Book)
1. Customer Needs, Wants, and Demands

• States of deprivation

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

• Form that human needs take as they are

Wants shaped by culture and individual personality

• An American needs food but wants a Big Mac,
french fries, and a soft drink

Demands • Human wants backed by buying power

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Chapter 1- slide 14
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 Understanding the Marketplace
and Customer Needs
2. Market Offering
(On page 30 of the Book)
• Combination of products, services,
information, or experiences offered to a
market to satisfy a need or want.

• May include other entities, such as

persons, places, organizations,
information, and ideas.

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Chapter 1- slide 15
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 Understanding the Marketplace
and Customer Needs
2. Market Offering
• Marketing myopia
– Paying more attention to the specific products
they offer than to the benefits and experiences
produced by these products

– Focus only on existing wants and lose sight of

underlying customer needs

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Chapter 1- slide 16
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 Understanding the Marketplace
and Customer Needs
3. Customer Value and Satisfaction
(On page 30 of the Book)
• Customer value is the difference between the
values that the customer gains from owning and
using a product and the costs of obtaining the
product. Customers form expectations about the
value of various marketing offers and buy
accordingly.
• Customer satisfaction Meeting the customer
expectations. Customer satisfaction is a key
influence on future buying behavior. 
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Chapter 1- slide 17
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 The value proposition
(On page 30 of the Book)
• Value proposition- A statement that summarizes
the key benefits or value for target customers. It
explains why customers should buy a product,
why stakeholders should donate, or why
prospective employees may want to work for an
organization.
• Target customers-The group of customers toward
which an organization directs its marketing
efforts.

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Chapter 1- slide 18
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Chapter 1- slide 19
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 Understanding the Marketplace
and Customer Needs
4. Exchanges & Relationships
(On page 32 of the Book)
• Marketing occurs when people decide to
satisfy needs and wants through exchange
relationships
• Exchange is the act of obtaining a desired
object from someone by offering something
in return
• Example - A political candidate wants votes,
a gym wants membership
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Chapter 1- slide 20
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 Understanding the Marketplace
and Customer Needs
5. Markets
(On page 32 of the Book)
• It is the set of actual and potential buyers of
a product or service

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Chapter 1- slide 21
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 Designing a Customer-Driven Marketing
Strategy
(On page 33 of the Book)
• Once it fully understands consumers and
the marketplace, marketing management
can design a customer-driven marketing
strategy

• Marketing management is the art and

science of choosing target markets and
building profitable relationships with them

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Chapter 1- slide 22
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 The Zero Moment of Truth (ZMOT)

https://youtu.be/g40rrWBx2ok

Please read the article on ZMOT

uploaded on Blackboard

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Pearson Education, Inc. publishing as Prentice Hall Chapter
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 (On page 135 of the Book)

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Chapter 1- slide 24
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Chapter 1- slide 25
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 (On page 135 & 137 of the Book)

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Chapter 1- slide 26
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 (On page 136 of the Book)

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Chapter 1- slide 27
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 Exploratory research identifies variable
for a research
(What is happening
– Observation research method)

Descriptive research tries to draw some

correlation between these variable
(How is something happening
- survey research method)

Causal research explains why things happen

(Why is something happening
– experimental research method to explain
cause and effect)
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Chapter 1- slide 28
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 (On page 135 to 140 AND page 146 to 147
of the Book)

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Chapter 1- slide 29
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Chapter 1- slide 30
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 Marketing Management
Orientations
On pages 34 to 37 of the E-Book on
ELearning

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Chapter 1- slide 31
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Chapter 1- slide 32
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