MARKETING AN INTRODUCTION Armstrong/Kotler MARKETING AN INTRODUCTION Armstrong/Kotler
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Marketing
Creating and Capturing Customer Value
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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
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What is Marketing
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
The Marketing Process
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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 Demands
Needs
Wants
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Discussion Question Describe a
college education in terms of
wants, needs,
and demands?
Market Offerings
Customer needs and wants are fulfilled through
market
offerings
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Exchange is the act of obtaining a desired
Exchanges and relationships
object from someone by offering
something in
return
A Modern Marketing System
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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 .
Two Questions for Marketers
What
markets will we
serve?
How can we serve
these
customers
best?
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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
competitor’s
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Discussion Question Why is it
important to a marketer to decide which customers they
will serve?
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Marketing Management Orientation
Marketing strategies are guided by a particular philosophy / concept;
• The production Concept – oldest orientation
• The Product Concept – Good products 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 that 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
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Marketing Management Orientations
Production concept
Product Concept
Selling concept
Marketing Concept
Societal Marketing
Concept
The Societal Marketing Concept
The idea that a company’s marketing decisions should consider consumer’s wants, the
company’s requirements, consumers’ long run
interests and society’s long run interests.
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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
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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
product’s perceived performance relative
to a buyer’s expectation.
Customer Value
Benefits
Costs
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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
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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?
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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
Growing Share of Customer
Building Customer
Equity
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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
Growing Share of Customer
• Good Customer Relationship Management can help marketers to increase their share of customer – the share they get of the
customer’s 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
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Building Customer Equity
• Customer equity is the total combined
customer lifetime values of all the company’s current and potential customers. As such it’s the future value of the company’s customer base
Discuss the case of Cadillac and BMW car
companies.
Customer Relationship Groups
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The Changing Marketing Landscape Economic environment
Digital age
Rapid globalization
Not-for-profit marketing
The Marketing Process
