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MARKETING AN INTRODUCTION
Armstrong/Kotler

Marketing
Creating and Capturing
Customer Value

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Outline

What is Marketing?
Understanding 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

What is Marketing
Definitions:
Marketing is managing profitable customer
relationships
Marketing is a social and managerial process by
which individuals and organizations obtain what
they need and want through creating and
exchanging value with others

Definition conti
Marketing is the process by which
companies create value for customers and
build strong relationships in order to
capture value from customers in return.

The Marketing Process

Understanding The Marketplace and

Customer Concepts
1. Needs, Wants, and Demand
2. Market offerings (Products, service,
and experiences)
3. Value and satisfaction
4. Exchanges and relationship; and
5. Markets

Customer needs, wants and demand

Needs states of felt deprivation
Wants The form human needs takes as shaped by
culture and individual personality.
Demand When backed by buying power wants
become demands.
Importance Procter and Gamble CEO A.G. Lafley is known for actually
going into customers home to undertake his own ethnographic research to
ensure that customers needs are well understood.

Discussion Question
Describe a
college education
in terms of
needs, wants,
and demands?

Market Offerings
Customer needs and wants are fulfilled
through
market
Offerings
A combination of
Products, services, information, or
experiences are offered to satisfy a need.

Customer Value and Satisfaction

Customers 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. Dissatisfied customers often switch
to competitors and disparage the products to others.
Note: Marketers must be careful to set the right level
of expectations Plz. discuss..

Exchanges and relationships

Exchange is the act of obtaining a desired object
from someone by offering something in return
Marketers want to build strong relationships by
consistently delivering superior customer value

Market

Market is the Set of all actual and

potential buyers of a product

A Modern Marketing System

Designing a Customer Driven Marketing

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

Two Questions for Marketers

What
markets
will we
serve?

How can
we serve
these
customers
best?

Designing customer driven marketing

strategy
Selecting customer
Market segmentation
Target Marketing
Marketing management
is customer
management and
demand management

Value Proposition
Set of benefits or values
delivered to customers
to satisfy their needs
Answers why a customer
should buy your brand
rather than a
competitors
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Discussion Question
Why is it
important to a
marketer to
decide which
customers they
will serve?

Marketing Management Orientation

Marketing strategies are guided by a particular
philosophy / concept;
The production Concept oldest orientation
The Product Concept Products with quality,
performance, and innovative features will sell.
The Selling Concept focus on selling and promotion
efforts
The above three practices lack the customer focus
and value and thus tend to fail

The Marketing Concept

The Marketing Management philosophy holds
that achieving organizational goals depends
on knowing the needs and wants of the target
markets and delivering desired satisfactions
better than competitors do.
Note: In this concept customer focus and
value are the paths to sales and profit unlike
others.

Marketing Management Orientations

Production
concept

Product
Concept

Selling
concept

Marketing
Concept

Societal
Marketing
Concept

The Societal Marketing Concept

The societal marketing concept holds that marketing
strategies should deliver value to customers in a way
that maintains or improves both the consumers and
societys well being.
The idea that a companys marketing decisions
should consider consumers wants, the companys
requirements, consumers long run interests and
societys long run interests.

Societal marketing concepts

Societal Marketing Concept
Consumers
Want
Satisfaction

Company Profits

Society
Human
Welfare

Preparing an Integrated Marketing Plan and

Program

Price

Place

Promotion

Product

Building Customer Relationships

Customer Relationship Management is the
overall process
of building and
maintaining
profitable
customer
relationships
by delivering
superior customer value and satisfaction.

Customer Relationship Management

Relationship building blocks;
Customer value A customer buys from the
firm that offers the highest perceived
value.
Customer satisfaction It depends on the
products perceived performance relative
to a buyers expectation.

Customer Value

Benefits

Costs

Customer Satisfaction and Relationships

Basic relationships
Full partnerships
Frequency marketing programs
Club marketing programs

The changing nature of customer relationship

Relating with more carefully selected

customers
Relating more deeply and interactively

Partner Relationship Management

Partner inside the company David Packard,
late cofounder of Hewlett Packard, wisely said,
Marketing is far too important to be left only
to marketing department. All departments
join the cause of creating value for customers
Marketing Partners outside the firm
Suppliers, channel partners, and even
competitors are considered in delivering
customer value

Discussion Question
What companies
do you personally
feel relate to you
deeply and
interactively?

Capturing Value from Customers

The first four steps in the marketing process
involve building customer relationships by
creating and delivering superior customer
value.
The final step involves capturing value in
return in the form of current and future sales,
market share, and profits.

Capturing Value from Customers

Creating
Customer
Loyalty and
Retention

Growing
Share of
Customer

Building
Customer
Equity

Customer Loyalty and Retention

Satisfied customers remain loyal and talk
favorably to others about the company and its
products.
Its five times cheaper to keep an old customer
than to acquire a new one.
Loosing the customer means losing the entire
stream of purchases that customer would
make over a lifetime of patronage.
Discuss the Case of Stew Leonardo

Customer Lifetime Value

The value of the entire stream of purchases
that the customer would make over a lifetime
of patronage.

Growing Share of Customer

Good Customer Relationship Management
can help marketers to increase their share of
customer the share they get of the
customers purchasing in their product
categories for ex.,
Supermarkets and Restaurants want to get
more share of stomach Car companies want
to increase share of garage and airlines want
greater share of travel

Building Customer Equity

Customer equity is the total combined

customer lifetime values of all the companys
current and potential customers. As such its
the future value of the companys customer
base.
Discuss the case of Cadillac and BMW car
companies.

Customer Relationship Groups

The Changing Marketing Landscape

Economic environment
Digital age
Rapid globalization
Not-for-profit marketing

The Marketing Process

Review your Learning

Identify a product of your choice and develop
its:
Marketing process
Marketing Strategy
Marketing Plan
Customer Relationship Management
Capturing Customer Value

Thank You!