Chapter One

Marketing: Creating and Capturing

Customer Value

Chapter 1- slide 1
 Creating and Capturing Customer
Value
Topic Outline
• What Is Marketing?
• Understand the Marketplace and Customer Needs
• Designing a Customer-Driven Marketing Strategy
• Preparing an Integrated Marketing Plan and Program
• Building Customer Relationships
• Capturing Value from Customers
• The Changing Marketing Landscape

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Chapter 1- slide 2
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 What Is Marketing?
Marketing is a process by which
companies create value for customers and
build strong customer relationships to
capture value from customers in return

Copyright © 2010 Pearson Education, Inc.

Chapter 1- slide 3
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 Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands

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

Wants • Form that needs take as they are shaped by culture

and individual personality

Demands • Wants backed by buying power

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 Understanding the Marketplace
and Customer Needs

• Market offerings are some combination of

products, services, information, or experiences
offered to a market to satisfy a need or want

• Marketing myopia is focusing only on existing wants

and losing sight of underlying consumer needs

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Chapter 1- slide 5
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 Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations

Customers
• Value and
satisfaction

Marketers
• Set the right level of
expectations
• Not too high or low

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Chapter 1- slide 6
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 Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a desired
object from someone by offering
something in return

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Chapter 1- slide 7
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 Understanding the Marketplace
and Customer Needs

Markets are the set of actual and

potential buyers of a product

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Chapter 1- slide 8
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 Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Demarketing is marketing to reduce demand

temporarily or permanently; the aim is not
to destroy demand but to reduce or shift it

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Chapter 1- slide 9
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 Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

The value proposition is the set of

benefits or values a company promises to
deliver to customers to satisfy their needs

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Chapter 1- slide 10
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal

concept concept concept concept concept

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Chapter 1- slide 11
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production concept is the idea that

consumers will favor products that are
available or highly affordable

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Chapter 1- slide 12
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Product concept is the idea that consumers
will favor products that offer the most
quality, performance, and features.
Organization should therefore devote its
energy to making continuous product
improvements.

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Chapter 1- slide 13
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 Designing a Customer-Driven
Marketing Strategy
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.

Typically practiced with Unsought goods.

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Chapter 1- slide 14
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 Designing a Customer-Driven
Marketing Strategy
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

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Chapter 1- slide 15
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 1. The Selling Concept
Starting Ends
Focus Means
Point
Selling
Existing Profits through
Factory and
Products sales volume
promoting

2. The Marketing Concept

Profits through
Customer Integrated
Market customer
needs Marketing
satisfaction

Notion of Customer pull-through

Lifetime Value
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Chapter 1- slide 16
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 Designing a Customer-Driven
Marketing Strategy
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

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Chapter 1- slide 17
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 Society
(Human Welfare)

Societal
Marketing
Consumers
Concept Company
(Satisfaction) (Profits)

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Chapter 1- slide 18
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 Building Customer Relationships
Customer Relationship Management (CRM)
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction

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Chapter 1- slide 19
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 Building Customer Relationships
Relationship Building Blocks: Customer Value
and Satisfaction

Customer- Customer
perceived value satisfaction
• The difference • The extent to
between total which a
customer value product’s
and total perceived
customer cost performance
matches a
buyer’s
expectations

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Chapter 1- slide 20
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 Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships

Full
Partnerships

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Chapter 1- slide 21
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 Building Customer Relationships

Partner relationship management involves

working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers

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Chapter 1- slide 22
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 Building Customer Relationships
Partner Relationship Management
• Partners inside the company is every
function area interacting with customers
– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
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Chapter 1- slide 23
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 Building Customer Relationships
Partner Relationship Management
• Supply chain is a channel that stretches
from raw materials to components to final
products to final buyers
• Supply management
• Strategic partners
• Strategic alliances

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Chapter 1- slide 24
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 Capturing Value from Customers
Creating Customer Loyalty and Retention
• Customer lifetime value is the value of
the entire stream of purchases that the
customer would make over a lifetime of
patronage

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Chapter 1- slide 25
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 Capturing Value from Customers
Growing Share of Customer

Share of customer is the portion of the

customer’s purchasing that a company gets
in its product categories

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Chapter 1- slide 26
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 Capturing Value from
Customers
Customer equity is the total combined
customer lifetime values of all of the
company’s customers

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Chapter 1- slide 27
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 Capturing Value from Customers
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
– Build the right relationship with the right
customers
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Chapter 1- slide 28
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 The Changing Marketing
Landscape

Major Developments

Rapid
Digital age
globalization

Ethics and
Not-for-profit
social
marketing
responsibility

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Chapter 1- slide 29
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