Today’s Agenda

 Introduction to the syllabus

 Knowing each other
 Forming groups
 Session 1 – Marketing: Creating and Capturing Customer
Value
Who is the instructor?
 Name: Xuehua Wang
 Office: Room 415, AEBS
 Email: wangxuehua@fem.ecnu.edu.cn
 Office hour: By appointment
Course Syllabus
 Textbook:
 Kotler & Armstrong (2010), Principles of Marketing (14th
ed.), Prentice Hall. (The photocopy edition can be bought via
dangdang.com)
 Course objectives:
1. Gain a basic understanding on Marketing concepts
2. Learning to apply the marketing theories in real business
situations.
 Class Format

 Lecture and Discussion

 From Week 3 on, two groups of students will be required to

present on the questions assigned to them in the last week’s
class (about 20 minutes).
 Group members will get the same mark on group
activities such as group presentation and report, unless
special situations are reported to the instructor!

 Attitudes determine your performance!

How can I download the lecture files?

 Blackboard system
 Assessment Method
1st Group Presentation* 40%
2nd Group Presentation and Final Report** 60%
Total 100%

*Each group will be requried to do a presentaiton on the assignment which

will be given at least one week before the presentation day.
 **Final report and presentation
 Each group is required to develop a Marketing Plan for a
company or a brand. Choose your company or brand and write
a short paragraph about the reason why you choose it and send
it to me via email by September 24, 2020. Groups must attain
instructor approval for the company/brand studied.

 The project consists of a Final Oral Presentation to the class

and a final report. Please analyze the company/brand based on
the strategic planning process with a focus on the STP and 4Ps
strategy. Each group is required to conduct a small survey on
these aspects. Give suggestions on how to improve based on
your analysis. The final report is due by the last class of this
course in this semester.11.12
Final report presentation time
 Week 9 (Nov. 12).

 Each group will be given 15 minutes to present their

marketing plan. Poor time management will suffer mark
deduction.

 Note: The instructor reserves the right to reasonably adjust the

syllabus.
Each group consists of 4-6 students (at least 2 Chinese students and 2
International students).
You may choose your group members based on your knowledge of
your classmates or ask the instructor to assign you to a group.
 Please form groups, write down your group members’
names, student id, and telephone; then send the list
to me by next Thursday (September 24).
 My email: wangxuehua@fem.ecnu.edu.cn

 Group number will be given based on the receiving

time of your email.
 Session 1
Marketing: Creating and
Capturing Customer Value
 Watch two videos on Zappos.

 What do successful companies have in common?

 Strongly customer-focused and heavily committed to

marketing.
What is marketing?

 The simplest marketing definition: Marketing is

managing profitable customer relationships.
 Attract new customers by promising superior value
 Keep and grow current customers by delivering satisfaction
E.g., Walmart has become the world’s largest retailer by
delivering on its promise: Save money. Live better.
 What Is Marketing? （背）

Marketing Defined

Marketing is the process by which companies create value

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

Value= Benefits / Cost (Monetary)

1-4
 So we need to know what the marketing process is?
The Marketing Process

STp 4PS CRM

 At a first step, marketers need to understand customer
needs and wants and the market in which they operate.

 We examine five core customer and market concepts:

 needs, wants, and demands;
 market offerings;
 value and satisfaction;
 exchanges and relationships; and
 markets.
Maslow's hierarchy of needs
Customer Needs, Wants, and Demands
The most basic concept underlying marketing is that of
human needs.

 Needs are states of deprivation 剥夺

 Physical—food, clothing, warmth, safety

 Social—belonging and affection
 Individual—knowledge and self-expression

Marketers did not create these needs; they are the basic
part of human makeup. 1-6
 Customer Needs, Wants, and Demands

Wants are the form that human needs take as they

are shaped by culture and individual personality.

Demands are wants backed by buying power.

1-7
 Who can give me an example of needs, wants,
and demands?

 American Express emphasizes consumers’ needs

 Market Offerings

 Marketers create market offers to fulfill needs and wants.

 A combination of goods,
services, information or
experiences offered
to a market.

 Offer may include services,

activities, people, places,
information or ideas.

 Market
Ideasmeans
canBuyers
be products too.
 Remember, market offerings are not limited to physical
products. Ideas can be market offerings too. Watch this
video.
 Here, the idea promoted is to reconnect kids with nature.
 Marketing myopia( 目光短浅）
Many sellers make the mistake of paying more attention to the
specific products they offer than to the benefits and
experiences produced by these products. These sellers suffer
from marketing myopia.

Sellers are so taken with their products that they focus only on
existing wants and needs, and losing sight of underlying
consumer wants and needs.
duan'qi'a
They forget that a product is only a tool to solve a consumer
problem.
1-9
 For example, the traditional banking industry and the
online company such as Zhifubao end up as competitors.

 HP did a good job to realize that a personal computer is

much more than just a collection of wires and electrical
components. It's consumers' life.
Watch an ad.
 Consumers usually face a broad array of products and services
that might satisfy a given need. How do they choose among these
many market offerings?

 They form expectations about the value and satisfaction that

various market offerings will deliver and buy accordingly.
Satisfied customers buy again and tell others about their good
experiences.

 satisfaction means difference between expectation and

performance
 Expectations --- their perceptions of the value that
various products and services deliver.

1-10
 Customer Value and Satisfaction

 Customer value is the difference between the benefits the

customer gains from owning and using a product and the
costs of obtaining the product.

 Customer satisfaction with a purchase depends on how

well the product’s performance lives up to the customer’s
expectations.
 Expections and satisfaction

Expectation < Performance Expectation > Performance

8 10 10 8

If performance is higher If performance is lower

than expectations, than expectations,
satisfaction is HIGH: satisfaction is LOW:
you outperformed you underperformed
Marketers need to set the right level of expectations: not too high or too low.
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.

Marketing consist of actions taken to build and

maintain desirable exchange relationships
with target audiences involving the market
offering.

1-11
 The concepts of exchange and relationships lead to
the concept of a market. What is market?

Market is the set of actual and potential buyers of a product or

service. --- They share a particular need or want that can
be satisfied through exchange relationships.

Marketing means managing markets to bring about profitable

customer relationships. However, creating these
relationships takes work.

Marketing system consists of all of the actors (suppliers,

company, competitors, intermediaries, and end users) in
the system who are affected by major environmental forces.
1-12
Understanding the Marketplace
and Customer Needs

Elements of a Marketing System

 Now that the company fully understands its consumers
and the marketplace, it must decide which customers it
will serve and how it will bring them value. That is to
design a customer-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?

1-13
 Selecting customers to serve

Market segmentation( 部分 ): Dividing the markets

into segments of customers.

Targeting: Which segments to go after.

1-14
Choosing a value proposition

 Positioning: living in customers’ minds against

competitors.

 A brand's value proposition is the set of benefits or

values it promises to deliver to consumers to satisfy their
needs.

 Companies must design strong value propositions that

give them the greatest advantage in their target markets.
 Watch an ad on smart car.
Marketing Management Orientations

 Production concept
 Product concept
 Selling concept
 Marketing concept
 Societal concept

1-18
 Marketing Management Orientations

Production concept is the idea that consumers will

favor products that are available or highly
affordable.--- Oldest orientation
So management should focus on improving production
and distribution efficiency at low costs.
E.g., Lenovo: low labor costs, high production efficiency, and
mass distribution.
efficiency: more production at low cost

1-19
 Marketing Management Orientations

Product concept is the idea that consumers will

favor products that offer the most quality,
performance, and features for which the
organization should therefore devote its energy
to making continuous improvements.

1-20
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.

It focuses on creating sales transactions rather than

on building long-term, profitable customer
relationships.
1-21
 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.

Let’s compare the above two orientations through

this figure:

1-22
Designing a Customer-Driven Marketing
Strategy

Marketing Management Orientations

 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.

It calls for sustainable marketing, socially and

environmentally responsible marketing that meets the
present needs of consumers and businesses while also
preserving or enhancing the ability of future generations
to meet their needs.
Watch two videos on two of the orientations.
1-23
Three considerations underlying the
societal marketing concept

Marketing Management Orientations

 Starting point Focus Means Ends

Selling
concept

Societal
marketing
concept
Production
concept

Product
concept

Marketing
concept
 The customer-driven marketing strategy outlines which
customers the company will serve and how it will be
served. Now the company devleops marketing plans and
programs --- a marketing mix --- that will actually
deliver the intended customer value.
 We often hear about marketing mix
( 营销组合 ); what is it?

The marketing mix is the set of tools (four Ps) the firm
uses to implement its marketing strategy
 Product: a need-satisfying market offering

 Price: how much to charge for the offering

 Place: how it will make the offering available to

target consumers.
 Promotion: communicate with target customers
about the offering and persuade them of its merits.
1-24
Integrated marketing program is a comprehensive
plan that communicates and delivers the intended
value to chosen customers (the company must
blend all of the 4Ps to deliver value; details in
later chapters)

1-25
Building customer relationships

 Doing a good job with the first three steps in the

marketing process ses the stage for step four, building
and managing lasting customer relationships.
 Customer Relationship Management
(CRM)

Customer relationship management is the overall

process of building and maintaining profitable
customer relationships by delivering superior
value and satisfaction.

 What is customer value?

 What is customer satisfaction?

1-26
Concepts revisited
 Customer-perceived value is the customer's evaluation of
the difference between all the benefits and all the costs of
a markting offer relative to those of competing offers.

 Customer satisfaction is the extent to which a product's

perceived performance matches a buyer's expectations.
The final step: Capturing value from
customers in return

Customer lifetime value is the value of

the entire stream of purchases that the
customer would make over a lifetime of
patronage( 惠顾、光临 ).

1-33
Share of customer

Share of customer is the portion of the customer’s

purchasing that a company gets in its product
categories.

Watch a video on the difference between market

share and customer share.

1-34
Next, Building Customer Equity

Customer equity is the total combined

customer lifetime values of all of the
company’s customers.

1-35
 Building Customer Equity

Building the right relationships with the right

customers involves treating customers as assets
that need to be managed and maximized.

 Different types of customers require different

relationship management strategies.

1-36
Building right relationships with right
customers

Customer Relationship Groups

难缠的人
So, What Is Marketing?
Pulling It All Together

1-49
 Review Questions

1. Define and outline steps in the marketing process

2. Explain the importance of understanding
customers and the marketplace, and identify the
five core marketplace concepts
3. Identify the key elements of a customer-driven
marketing strategy and discuss marketing
management orientations that guide marketing
strategy
4. Discuss customer relationship management, and
identify strategies for creating value for customers
and capturing value from customers in return
5. A cell phone company spends $148.50 in total costs to
acquire a new user. On average, this new user spends
$60 a month for calling and related services, and the
cell-phone company generates an 18 percent profit
margin in each of the 25 months that the user is
expected to stay with the service. What is the Customer
Lifetime Value of this user to the cell phone company?

The End