Chapter 1

Marketing in a Changing
World: Creating Customer
Value and Satisfaction

1
 What is Marketing?
Process by which individuals and
groups obtain what they need and
want through creating and
exchanging products and value
with others.

Simply put: Marketing is the delivery

of customer satisfaction at a profit.

2
 Core Marketing Concepts
(Fig. 1-1)
Needs, wants,
and demands

Markets Products
and services

Exchange, Value,
transactions, satisfaction,
and relationships and quality
3
 What are Consumer’s
Needs, Wants and
Demands?
 Needs - state of felt deprivation for basic items
such as food and clothing and complex needs
such as for belonging. i.e. I am hungry.
 Wants - form that a human need takes as
shaped by culture and individual personality.
i.e. I want a hamburger, French fries, and a soft
drink.
 Demands - human wants backed by buying
power. i.e. I have money to buy this meal.

4
 What Will Satisfy
Consumer’s Needs and
Wants?
Products
nything that can be Offered to a Market to Satisfy a Need or Want

Experiences Persons Places

Organizations Information Ideas

Services
Activities or Benefits Offered for Sale That Are Essentially
Intangible and Don’t Result in the Ownership of Anything
5
 How Do Consumers
Choose Among Products and
Services?
Value Gained From Owning a Product and
Costs of Obtaining the Product is
Customer Value

Product’s Perceived Performance in Delivering

Value Relative to Buyer’s Expectations is
Customer Satisfaction

Total Quality Management Involves

Improving the Quality of Products, Services, and
Marketing Processes

6
How Do Consumers
Obtain Products and
Services?

Exchanges Transactions

Relationships
Building a Marketing
Network Consisting of
The Company and All
Its Supporting
Stakeholders

7
 Who Purchases Products
and Services?
People Who
Exhibit Need Market – Actual
Ethical
Buyers who
to
F
rs
c
a
Buyers
share a
S n
o
itu
a l
U
td
p
n
x
ec
Resources to particular
Exchange need or want
that can be
Attitudes
satisfied
of Potential
through
Others Buyers
Willingness to exchange or
Exchange relationships.
8
 Modern Marketing System
(Fig. 1-3)
Suppliers

Company
Competitors
(Marketer)
Environment

Environment
Marketing
Intermediaries

End User
Market
9
 Discussion
Connections
 In your own words, what is marketing?
 What does marketing mean to you?
 Form small groups, and select a brand of
athletic shoes that a group member has
purchased recently.
 What Customer Value did the group member
expect?
 Did the member experience Customer
Satisfaction? Why or why not?
 Marketing Management
Marketing Demand Profitable
Management Management Customer
Relationships
Implementing Finding and
programs increasing Attracting new
to create demand, also customers and
exchanges changing or retaining and
with target reducing building
buyers demand such relationships
to achieve as in with current
organizational Demarketing customers
goals

11
 Marketing Management
Practice

Stage 1. Entrepreneurial Marketing

Stage 2. Formulated Marketing

Stage 3. Intrepreneurial Marketing

12
 Marketing Management
Philosophies
Production Concept •Consumers favor products that are
available and highly affordable.
•Improve production and distribution.

•Consumers favor products that offer

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

Selling Concept •Consumers will buy products only if

the company promotes/ sells these
products.
Marketing Concept •Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
Societal Marketing Concept
•Focuses on needs/ wants of target
markets & delivering superior value.
13
 Marketing and Sales
Concepts 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
14
 Societal Marketing
Concept
Society
(Human Welfare)

Societal
Marketing
Concept

Consumers Company
(Want Satisfaction) (Profits)
15
 Marketing Challenges in
the New “Connected”
Millennium
Connections with Customers
Connecting Connecting more selectively
Technologies Connecting for life
Computer Connecting Directly
Information
Communication
Transportation Connections
with the
Connections with world around
Marketing Partners us
•Connecting with other •Global
company departments Connections
•Connecting with •Connections
suppliers and distributors with values and
•Connecting through responsibilities
Text page 23 16
strategic alliances •Broadened
 Technologies for
Connecting
Learn About & Create Products &
Track Customers Services Tailored to
With Databases Meet Customer Needs
Connecting Technologies in
Computers,
Telecommunications,
Information, & Transportation
Help To:

Communicate With Text page 26

Distribute Products
Customers in Groups More Efficiently &
What aspects of
the Internet
make it a good
forum for

Or One-on-One Effectively
marketing?

How do Web
companies
compete with
brick and mortar
companies?

Click or press spacebar to return

17
 The Internet
 The Internet has been hailed as the technology
behind a new model for doing business.
 New applications include:
 Internet – connecting with customers,
 Intranets – connecting with others in the company, and
 Extranets – connecting with strategic partners, suppliers,
and dealers.
 Purchasing will be over $1.4 trillion in 2003.
 400,000 companies are now using the Internet to
do business.

18
Connections With
Customers
 Most marketers are targeting
fewer, potentially more
profitable customers.
 Asking:
 What value does the customer
bring to the organization?
 Are they worth pursuing?
 Focus has shifted to:
 keeping current customers, and
 building lasting relationships
based on superior satisfaction
and value.

19
 Direct Connections With
Customers
 Many companies use technologies to let them
connect more directly with their customers.
 Products available via telephone, mail-order catalogs, kiosks
and e-commerce.
 Some firms sell only via direct channels (i.e. Dell Computer,
www.Amazon.com), others use a combination.
 Direct marketing is redefining the buyer’s role in
connecting with sellers.
 Buyers are active participants in shaping the marketing offer
and process; some buyers design their own products online
such as at www.LandsEnd.com.

20
 Connections With
Marketing’s Partners
 Connecting Inside the  Connecting With
Company Outside Partners
 Every employee must  Supply Chain
be customer-focused Management
 Teams coordinate  Strategic Alliances
efforts toward
customers

21
 Review of Concept
Connections
 Define what marketing is and discuss its core
concepts.
 Explain the relationships between customer
value, satisfaction, and quality.
 Define marketing management and examine
how marketers manage demand and build
profitable customer relationships.
 Compare the five marketing management
philosophies.
 Analyze the major challenges facing
marketers heading into the next millennium.
22