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1/41Chapter 1- slide 1Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter One
Marketing: Creating and Capturing
Customer Value
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Creating and Capturing CustomerValue
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
Topic Outline
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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 inReturn.
Marketingis about managing
profitable customer relationships
Attracting new customers.
Retaining and growing current
customers.
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What Is Marketing?
The Marketing Process
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Step 1: Understanding the Marketplaceand Customer Needs
Customer needs, wants, and demands
Market offerings
Value and satisfaction
Exchanges and relationships
Markets
Core Concepts
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Copyright 2010 Pearson Education, Inc.
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Step 1: Understanding the Marketplaceand Customer Needs
States of deprivation
Physicalfood, clothing, warmth, safety
Socialbelonging and affection
Individualknowledge and self-expression
Needs
Form that needs take as they are shaped by cultureand individual personalityWants
Wants backed by buying power
Willingness and desire to buy.Demands
Customer Needs, Wants, and Demands
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Step 1: Understanding the Marketplace
and Customer Needs
Market offerings are somecombination of products,services, information, or
experiences offered to amarket to satisfy a need orwant
Marketing myopia isfocusing only on existing
wants and losing sight ofunderlying consumerneeds
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Copyright 2010 Pearson Education, Inc.
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Customer Value and Satisfaction
Expectations
Customers
Value andsatisfaction
Marketers
Set the right level ofexpectations
Not too high or low
Step 1: Understanding the Marketplace
and Customer Needs
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Copyright 2010 Pearson Education, Inc.
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Value
Customers form expectations regarding value
Marketers must deliver value to consumers
Satisfaction
A satisfied customer will buy again and tell others about their
good experience
Exchange The act of obtaining a desired object from someone by offering
something in return
One exchange is not the goal, relationships with several
exchanges are the goal
Relationships are built through delivering value and satisfaction
Step 1: Understanding the Marketplace
and Customer Needs
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Copyright 2010 Pearson Education, Inc.
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Markets are the set of actual and potential
buyers of a product . Marketers seek
buyers that are profitable.
Step 1: Understanding the Marketplace
and Customer Needs
Figure: Modern Marketing System
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Chapter 1- slide 11Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-
Driven Marketing StrategyMarketing 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?
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Chapter 1- slide 12Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Market segmentation refers to dividing the
markets into segments of customers
Target marketing refers to which segments
to go after
Selecting Customers to Serve
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Chapter 1- slide 13Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Demand Management is the process offinding and increasing demand, also
changing or reducing demand.
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is notto destroy demand but to reduce or shift it
Selecting Customers to Serve
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Chapter 1- slide 14Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Choosing a Value Proposition
The value proposition is the set of
benefits or values a company promises todeliver to customers to satisfy their needs
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Chapter 1- slide 15Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Productionconcept
Productconcept
Sellingconcept
Marketingconcept
Societalconcept
Marketing Management Orientations or Philosophies
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Chapter 1- slide 16Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Production concept is the idea that
consumers will favor products that areavailable or highly affordable.
Marketing Management Orientations
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Chapter 1- slide 17Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Product concept is the idea that consumers
will favor products that offer the mostquality, performance, and features.
Organization should therefore devote its
energy to making continuous productimprovements.
Marketing Management Orientations
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Chapter 1- slide 18Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Selling concept is the idea that consumers
will not buy enough of the firms productsunless it undertakes a large scale selling
and promotion effort.
Marketing Management Orientations
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Chapter 1- slide 19Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: 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 anddelivering the desired
satisfactions better than
competitors do
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Chapter 1- slide 20Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
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Marketing & Sales
Concepts Contrasted
FactoryExisting
Products
Selling
and
Promoting
Profits
through
Volume
MarketCustomer
NeedsIntegratedMarketing
Profitsthrough
Satisfaction
The Selling Concept
The Marketing Concept
StartingPoint
Focus Means Ends
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Chapter 1- slide 21Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Societal marketing concept
is the idea that a company
should make good marketingdecisions by considering
consumers wants, the
companys requirements,
consumers long-terminterests, and societys long-
run interests
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Chapter 1- slide 22Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 2: Designing a Customer-
Driven Marketing Strategy
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Chapter 1- slide 23Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy. It includes product, price,promotion, and place.
Integrated marketing program is a
comprehensive plan that communicatesand delivers the intended value to chosen
customers.
Step 3: Preparing an Integrated
Marketing Plan and Program
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Step 4: Building CustomerRelationships
The overall process of
building and maintaining
profitable customerrelationships by delivering
superior customer value
and satisfaction
Customer Relationship Management (CRM)
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Chapter 1- slide 25Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 4: Building Customer
Relationships
Relationship Building Blocks: Customer Valueand Satisfaction
Customer-perceived value
The differencebetween totalcustomer valueand totalcustomer cost
Customersatisfaction
The extent towhich aproductsperceivedperformancematches abuyersexpectations
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Step 4: Building Customer Relationships
Customer Relationship Levels and Tools
BasicRelationships
FullPartnerships
Not All Customers are Equal
Basic Relationships : Low-margin customers
Full Partnerships :Key customers
Selective relationship management : Weeding out unprofitable customers
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Chapter 1- slide 27Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 4: Building CustomerRelationships
Relating with more carefully selected
customers uses selective relationshipmanagement to target fewer, more profitablecustomers
Relating more deeply and interactively by
incorporating more interactive two wayrelationships through blogs, Websites, onlinecommunities and social networks
The Changing Nature of CustomerRelationships
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Chapter 1- slide 28Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 4: Building CustomerRelationships
Partner relationship management involves working
closely with partners in other company departments and
outside the company to jointly bring greater value to
customers
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
Partner Relationship Management
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Chapter 1- slide 29Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Building Customer Relationships
Supply chain is a channel that stretches
from raw materials to components to final
products to final buyers Supply management
Strategic partners
Strategic alliances
Partner Relationship Management
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Chapter 1- slide 30Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 5: Capturing Value from Customers
Customer lifetime value is the value of the
entire stream of purchases that the
customer would make over a lifetime of
patronage.
Creating Customer Loyalty and Retention
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Chapter 1- slide 31Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 5: Capturing Value fromCustomers
Share of customer is the portion of the
customers purchasing that a company getsin its product categories
Growing Share of Customer
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Chapter 1- slide 32Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 5: Capturing Value from
CustomersCustomer equity is
the total combined
customer lifetimevalues of all of the
companys
customers
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Chapter 1- slide 33Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Step 5: Capturing Value fromCustomers
Building the right relationships with theright customers involves treating
customers as assets that need to bemanaged and maximized
Different types of customers requiredifferent relationship management
strategies Build the right relationship with the right
customers
Building Customer Equity
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Chapter 1- slide 34Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
The Changing MarketingLandscape
Digital age Rapidglobalization
Ethics andsocial
responsibilityNot-for-profit
marketing
Major Developments
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Chapter 1- slide 35Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
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The Changing Marketing
Landscape
Growth of the Internet
Advances in
telecommunications,information,transportation Customer research and
tracking
Product development Distribution
New advertising tools
24/7 marketing through theInternet
Challenges
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
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The Changing Marketing
Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Geographical and
cultural distances have
shrunk Greater market coverage
More options for purchasing
and manufacturing
Increased competition fromforeign competitors
Challenges
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Chapter 1- slide 37Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
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The Changing Marketing
Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Marketers need to
take great
responsibility for theimpact of their actions Caring capitalism is a way to
differentiate your company
Challenges
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Chapter 1- slide 38Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
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The Changing Marketing
Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Many organizations are
realizing the
importance of strategicmarketing Performing arts
Government agencies
Colleges
Hospitals
Churches
Challenges
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Chapter 1- slide 39Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
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The Changing Marketing
Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Profits through
managing long-term
customer equity Improve customer
knowledge
Target profitable customers
Keep profitable customers
Challenges
S Wh t I M k ti ?
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Chapter 1- slide 40Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
So, What Is Marketing?
Pulling It All Together
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C i ht 2010 P Ed ti I1 - 41
What is Marketing
The process of building profitable customer
relationships by creating value forcustomers and capturing value in return
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