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Part One

Defining Marketing and the Marketing Process

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Chapter One

Creating and Capturing Customer Value

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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

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What is a Market?

Market was traditionally described as a physical place where buyers and sellers gathered to buy and sell goods.

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

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Modern Exchange EconomyThe Five Basic Markets

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What Is Being Marketed?

• Goods• Services• Events• Experiences • Persons

• Places• Properties• Organization• Information• Ideas

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Who Markets?

Marketer is someone who seeks a response- attention, a purchase, a vote, a donation- from another party called the prospect.

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Simple Marketing System

Relationship Between Industry and Market

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What Is Marketing?The Marketing Process

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Understanding the Marketplaceand Customer NeedsCustomer Needs, Wants, and Demands

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Understanding the Marketplaceand Customer Needs

5 Types of Needs

• Stated needs- customer wants an inexpensive car• Real needs- customer wants a car whose operating

cost not initial cost, is low• Unstated needs- customer expects good service from

the dealer• Delight needs- customer would like the dealer to

include an onboard GPS navigation system• Secret needs- customer wants friends to see him/her

as a savvy consumer

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Understanding the Marketplaceand Customer Needs

8 Demand States

• Negative demand- consumers dislike the product and may even pay to avoid it

• Nonexistent demand- consumers may be unaware or uninterested in the product

• Latent demand- consumers may share a strong need that cannot be satisfied by an existing product

• Declining demand- consumers begin to buy the product less frequently or not at all

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Understanding the Marketplaceand Customer Needs

8 Demand States

• Irregular demand- consumer purchase vary on a seasonal, monthly, weekly, daily or even hourly basis

• Full demand- consumers adequately buying all products put into the marketplace

• Overfull demand- more consumers would like to buy the product that can be satisfied

• Unwholesome demand- consumers may be attracted to products that have undesirable social consequences

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Understanding the Marketplaceand 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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Understanding the Marketplaceand Customer Needs

Customer Value and SatisfactionExpectations

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Exchange is the act of obtaining a desired object from someone by offering something in return

Understanding the Marketplaceand Customer Needs

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Understanding the Marketplaceand Customer Needs

Markets are the set of actual and potential buyers of a product

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Designing a Customer-Driven Marketing Strategy

Marketing Management is the art and science of choosing target markets and building profitable relationships with them.

Customer management + Demand management

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Designing a Customer-Driven Marketing Strategy

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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Designing a Customer-Driven Marketing Strategy

Market segmentation is the process when company decides whom it will serve by dividing the market into segments of customers.

Selecting Customers to Serve

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Designing a Customer-Driven Marketing Strategy

Target Marketing is the process of selecting which segments it will go after. ( Primary Target Market)

Selecting Customers to Serve

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Designing a Customer-Driven Marketing Strategy

Value is a central marketing concept, primarily a combination of quality, service and price (qsp), called the customer value triad.

Value perceptions increases with quality and service but decrease with price

Choosing a Value Proposition

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Designing a Customer-Driven Marketing Strategy

Value Proposition refers to set of benefits and values it promises to deliver to consumers to satisfy their needs.

Satisfaction reflects a person’s judgement of a product’s perceived performance in relationship to expectations.

Choosing a Value Proposition

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Designing a Customer-Driven Marketing StrategyMarketing Management Orientations

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Designing a Customer-Driven Marketing Strategy

Production concept is the idea that consumers will favor products that are available or highly affordable

Marketing Management Orientations

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Designing a Customer-Driven Marketing Strategy

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.

Marketing Management Orientations

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Designing a Customer-Driven Marketing Strategy

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

Marketing Management Orientations

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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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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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Designing a Customer-Driven Marketing Strategy

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Designing a Customer-Driven Marketing Strategy

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Building Customer Relationships

• The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Customer Relationship Management (CRM)

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Building Customer Relationships

• A marketing relationship in which customers, empowered by today’s digital technologies, interact with companies and with each other to shape their relationships with brands.

Customer Managed Relationship

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Building Customer Relationships

• Brand exchanges created by consumers themselves- both invited and uninvited- by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.

Consumer Generated Marketing

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Building Customer Relationships

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

Partner Relationship Management

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Building the Right Relationship with the Right Customers

Customer Relationship Groups

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Building the Right Relationship with the Right Customers

Customer Relationship Groups

• True Friends– Both profitable and loyal– Strong fit between their needs and company’s

offerings– Company invests to delight, nurture, retain and

grow them– Company wants them to turn into true believers

who come back regularly and tell others about their experiences

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Building the Right Relationship with the Right Customers

Customer Relationship Groups

• Butterflies– Potentially profitable but not loyal– Good fit between their needs and company’s

offerings– Company enjoy them for the moment, create

satisfying and profitable transactions.

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Building the Right Relationship with the Right Customers

Customer Relationship Groups

• Barnacles– Highly loyal but not very profitable– Limited fit between their needs and company’s

offerings– Most problematic customers– Company might improve profitability by selling

them more, raising their fees or reducing service.

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Building the Right Relationship with the Right Customers

Customer Relationship Groups

• Strangers– Little projected loyalty and low potential

profitability– little fit between their needs and company’s

offerings– Don’t invest anything in them!

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4 Ps of Marketing

Four Cs of MarketingFour Cs of Marketing

Customer solution (Product)Customer solution (Product) Customer cost (Price)Customer cost (Price) Convenience (Placement)Convenience (Placement) Communication (Promotion)Communication (Promotion)

4Pss Provide4Pss Provide

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Expanded Model of the Marketing Process

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Activity 1

• Group of customers plan to buy a burger.• Ask them to list down what kind of burger

they want ( ingredients, type of sauce, etc.)• Group will select what type of burger/s to

market, select their target consumers and provide a value proposition.

• Make sure you to acquire and retain your customer!

Buy ME a Burger!