PRINCIPLES OF MARKETING

Eighth Edition
Philip Kotler and Gary Armstrong
Chapter
Chapter
11
Marketing in a Changing World:
Creating Customer Value and
Satisfaction
What
What is
is Marketing?
Marketing?

• Process by which individuals and

groups obtain what they need and want
through creating and exchanging
products and value with others.

• More simply: Marketing is the delivery

of customer satisfaction at a profit.
Core
Core Marketing
Marketing
Concepts
Concepts

Products
Needs, wants, and
and demands Services

Core
Core
Marketing
Marketing
Concepts
Concepts
Markets
Value, satisfaction,
and quality

Exchange, transactions,
and relationships
What
What Motivates
Motivates aa Consumer
Consumer
to
to Take
Take Action?
Action?
• Needs - state of felt deprivation for basic items
such as food and clothing and complex needs
such as for belonging. i.e. I am thirsty

• Wants - form that a human need takes as shaped

by culture and individual personality. i.e. I want
a Coca-Cola.

• Demands - human wants backed by buying

power. i.e. I have money to buy a Coca-Cola.
What
What Will
Will Satisfy
Satisfy Consumer’s
Consumer’s
Needs
Needs and
and Wants?
Wants?

• Products - anything • Services - activities or

that can be offered to a benefits offered for
market for attention, sale that are
acquisition, use or essentially intangible
consumption and that and don’t result in the
might satisfy a need or ownership of anything.
want. • Examples: banking,
• Examples: persons, airlines, haircuts, and
places, organizations, hotels.
activities, and ideas.
How
How DoDo Consumers
Consumers Choose
Choose
Choose
Choose Among
Among Products
Products and
and
Services?
Services?
• Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the
product.

• Customer Satisfaction - depends on the

product’s perceived performance in
delivering value relative to a buyer’s
expectations. Linked to Quality and Total
Quality Management (TQM).
How
How do
do Consumers
Consumers Obtain
Obtain
Products
Products and
and Services?
Services?
• Exchanges - act of obtaining a desired object from
someone by offering something in return.

• Transactions - trade of values between parties.

Usually involves money and a response.

• Relationships - building long-term relationships

with consumers, distributors, dealers, and
suppliers.
Who
Who Purchases
Purchases Products
Products
and
and Services?
Services?

Actual
Actual
Market
Market -- buyers
buyers Buyers
who Buyers
who share
share aa
particular
particular need
need
or
or want
want that
that can
can
be
be satisfied
satisfied by
by aa
company’s
company’s products
products Potential
Potential
or
or services.
services. Buyers
Buyers
Modern
Modern Marketing
Marketing System
System
Suppliers
Suppliers

Company
Company
Competitors
Competitors (Marketer)
(Marketer)
Environment

Environment
Marketing
Marketing
Intermediaries
Intermediaries

End
End User
User
Market
Market
Marketing
Marketing Management
Management

Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals

Demand Management
Finding and increasing demand, also
changing or reducing demand

Profitable Customer Relationships

Attracting new customers and
retaining current customers
Marketing
Marketing Management
Management
Philosophies
Philosophies
• Consumers favor products that are
Production
Production Concept
Concept available and highly affordable
•Improve production and distribution

•Consumers favor products that offer

Product
Product Concept
Concept the most quality, performance, and
innovative features

•Consumers will buy products only if

Selling
Selling Concept
Concept the company promotes/ sells these
product

•Focuses on needs/ wants of target

Marketing
Marketing Concept
Concept markets & delivering satisfaction
better than competitors

•Focuses on needs/ wants of target

Societal
Societal Marketing
Marketing Concept
Concept markets & delivering superior value
•Society’s well-being
Marketing
Marketing && Sales
Sales
Concepts
Concepts
Contrasted
Contrasted
Starting Focus Means Ends
Point

Selling Profits
Existing
Factory and through
Products
Promoting Volume

The
The Selling
Selling Concept
Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The
The Marketing
Marketing Concept
Concept
Societal
Societal Marketing
Marketing Concept
Concept
Society
Society
(Human
(Human Welfare
Welfare))

Societal
Societal
Marketing
Marketing
Concept
Concept

Consumers
Consumers Company
Company
(Wants)
(Wants) (Profits)
(Profits)
New
New Marketing
Marketing Challenges
Challenges
New
Marketing
Landscape
& Nonprofit
Information Marketing
Technology
Emerging
Emerging
Ethical
Concerns
Challenges
Challenges Globalizati
on
Changing
World
Economy