Chapter 1

Marketing: Creating and Capturing Customer Value

 What is Marketing
The process of exploring, creating, and delivering value to
satisfy the needs of a target market at a profit. (Kotler)

Organizational function and a set of process for creating,

communicating and delivering value to customers and for
managing relationship in ways that benefit the organization
and its stakeholders. (Moriarty, Mitchell and Wells)

Process by which companies create value for customers and

build profitable and sustainable customer relationships to
capture value from customers in return (Kotler et al)

Marketing is the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large. (AMA)
Marketing Process
Understanding the Marketplace and Customer Needs
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.

1) e.g. of a product: shaving gel, sunscreen lotion.

Discussion: What needs to these products fulfill?

2) e.g. of services: Banking, air travel, hotel stays.

Discussion: What needs to these services fulfill?

3) e.g. of an experience: tourism Bangladesh

Discussion: What needs to these experiences fulfill?

Further Discussion: Can “ideas” be a market offering?

 Understanding the Marketplace and Customer Needs

Marketing myopia is focusing only on

existing wants and losing sight of
underlying consumer needs. E.g. mail,
telephone, floppy disk.
Understanding the Marketplace and Customer Needs
Customer Value and Satisfaction Expectations

Customer
expectation

Product
Performance
Understanding the Marketplace and Customer Needs

Exchange

Market
Designing a Customer Driven Marketing Strategy
Selecting Customers to Serve

Market Segment

Target Market
 Whitening
Regular
Teeth

Sensitivity Different Segments of Gum Care

Toothpaste

Cavity Bad
Protection Breathe
Designing a Customer Driven Marketing Strategy
Choosing a Value Proposition
Company Orientation Towards the Market Place

Production Orientation

Focus on Production and Efficiency

Economies of Scale

Limited Consumer Research

Company Orientation Towards the Market Place

Product Orientation

Favors the Product with Better Quality

High in Performance and Innovation

Product Improvement

Emphasis on Quality
Company Orientation Towards the Market Place

Selling Orientation

Persuade Consumers to Buy Products

High Risk as no Focus on Building Relationship

Product Improvement

Practiced with Unsought Goods

Company Orientation Towards the Market Place

Market Orientation

Focus on customers’ need and want

Integrated Marketing Efforts

Market Analysis
 Marketing and Selling Concept

Profits
Existing Selling and
Factory through sales
products promoting
volume

Profits through
Consumer Integrated
Market customer
needs marketing satisfaction
Should a Firm Follow Only One Approach or Both?

Market orientation gets the right product

product orientation get the product right.
Societal Marketing Concept

Society (human
welfare)

Societal
Marketing
Concept
Consumers (Want Company
satisfaction) (Profits)
Preparing an Integrated Marketing Plan
and Program
 Building Customer Relationship

CRM is the overall process of building and maintaining

profitable customer relationships by delivering superior
customer value and satisfaction.
 Building Customer Relationship

• Customer satisfaction is the person’s feeling of pleasure or dissatisfaction resulting

from comparing a product’s perceived performance in relation to his/her
expectations.
• Discussion example: Marios Restaurant
• Customer value is the customer’s evaluation of the difference between all the
benefits and all the costs of a market offering relative to those of competing
products.
• Discussion example: designer clothes.
 Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships

Full
Partnerships

Copyright © 2010 Pearson Education, Inc.

Chapter 1- slide 29
Publishing as Prentice Hall
 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
 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
 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
 Capturing Value From Customers

Attitudinal Loyalty- Strong Personal feelings; Apple, One Plus, LV bags

Behavioral Loyalty- Repeat Purchase; Uber/Pathao; FMCG product

 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.
• Bangladeshi people mostly want to buy Toyota cars because of many factors –
Imagine how much money will the company make from a single consumer if he/she
buys at least 3 cars in their lifetime.
• Every time a customer walks out your door dissatisfied, you are losing not only
money – but also the –ve aspect of –ve WOM.
 Capturing Value From Customers

• Share of customer is the portion of the customer’s purchasing that a company gets in its
product categories.
• Discussion: How Amazon increased their share of online purchases.
• Banks want to increase share of wallet/deposits.
• Airline companies want to increase share of travel.
 Capturing Value From Customers

Customer equity is the total combined customer lifetime values of all of the
company’s customers.
Building the Right Relationship with Right Customers