Chapter 1 basic marketing

Marketing

Creating
and Capturing
Customer Value
Chapter 1
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Previewing the Concepts
1. Define marketing and the marketing process
2. Understand customers and identify the five core
marketplace concepts
3. Identify elements of a customer-driven marketing
strategy and discuss the marketing management
orientations that guide strategy
4. Discuss customer relationship management and
identify strategies for creating value for and
capturing value from customers
5. Describe the major trends and forces that are
changing the marketing landscape
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What Is Marketing?
• Simple definition:
– Marketing is managing profitable customer

relationships

• Goals:
1.Attract new customers
2.Keep and grow current customer base

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Marketing Defined
• Marketing:
– The process of creating value for customers
and building strong relationships to capture
value from customers in return

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OLD view of
marketing:

NEW view of
marketing:

Making a sale “telling and selling”

Satisfying
customer needs
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The Marketing Process
• A simple model of the marketing process:

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Core Concepts
• Marketers must understand five core
customer and marketplace concepts:
– Needs, wants, and demands
– Market offerings
– Value and satisfaction
– Exchanges and relationships
– Markets

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Needs, Wants, and Demands
• Need:
– State of felt deprivation

• Wants:
– Form that a human need takes, as shaped by

culture and individual personality

• Wants + Buying Power = Demand

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Market Offerings
• Needs and wants are fulfilled through
market offerings:
– Combination of products, services,
information, or experiences offered to a
market to satisfy a need or want

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Marketing Myopia
• Marketing Myopia:
– Mistake of focusing on specific products a
company offers rather than the benefits and
experiences produced by the products
– They focus on the “wants” and lose sight of
the “needs”

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Customer Value and Satisfaction
• Care must be taken when setting
expectations for market offerings:
– If expectations are too low, offering may fail to
attract enough buyers
– If expectations are too high, buyers will be
disappointed

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Exchanges and Relationships
• Exchange:
– Obtaining a desired object from someone by
offering something in return
– Marketing builds and maintains exchange
relationships with target audiences
– Marketers build strong relationships by
delivering value

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Markets
• Market:
– The set of actual and potential buyers of a
product
– These buyers share a need or want that can
be satisfied through exchange relationships

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Modern Marketing Systems
• Main elements in a modern marketing
system include:
– Suppliers
– Company (marketer)
– Competitors
– Marketing intermediaries
– Consumers

• Major environmental forces affect each
element
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Marketing Management

• Marketing Management:
– The art and science of choosing target
markets and building profitable relationships
with them
– Aim is to find, attract, keep, and grow
customers by creating, delivering, and
communicating superior value

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Marketing Management
• Design a winning marketing strategy by
answering the following questions:
1. What customers will we serve?
– What is our target market?

2. How can we best serve these
customers?
– What is our value proposition?

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Selecting Customers to Serve
• Market Segmentation:

– Dividing the market

• Target Marketing:
– Selecting one or more segments to cultivate

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Choosing a Value Proposition
• Value Proposition:
– The benefits or values a company promises to
deliver to consumers to satisfy their needs
– Differentiate brands within the marketplace
– Answer why a consumer should buy their
brand rather than a competitor’s

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Marketing Management Orientations
• Organizations design and carry out
marketing strategies under five concepts:
– Production Concept
– Product Concept
– Selling Concept
– Marketing Concept

– Societal Marketing Concept

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The Marketing Concept
• Selling and marketing concepts
contrasted:

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The Societal Marketing Concept
• Societal Marketing Strategy considers:
– consumers’ wants
– company needs
– consumers’ and society’s long-run interests
– Calls for sustainable marketing, socially and
environmentally responsible marketing

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The Integrated Marketing Plan

• Transforms the marketing strategy into
action
• Includes the marketing mix and four Ps of
marketing:
– Product
– Price
– Place (Distribution)
– Promotion
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Building Customer Relationships
• Customer Relationship Management
(CRM):
– Building and maintaining profitable customer
relationships by delivering superior customer
value and satisfaction
– Deals with all aspects of acquiring, keeping,
and growing customers
– Customer value and satisfaction are key

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Customer-Perceived Value
• Customer-Perceived Value:

– Customer’s evaluation of the difference
between all benefits and costs of a marketing
offer relative to those of the competitors

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Customer Satisfaction
• Customer Satisfaction:
– Extent to which the product’s perceived
performance matches a buyer’s expectations
• High customer satisfaction = consumer loyalty
• Exceeding expectations
• Profitability?

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Customer Relationships
• Firms may choose to build relationships at
different levels
• Loyalty and retention programs build
relationships and may include:

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