2. 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
3. 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
4. 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.
6. 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
7. 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.
9. 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.
10. 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…..
11. 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
Exchanges and relationships
14. Designing a Customer Driven Marketing
Strategy
Marketing
management is the
art and science of
choosing target
markets and building
profitable
relationships with
them.
15. Two Questions for Marketers
What
markets
will we
serve?
How can
we serve
these
customers
best?
16. 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
16
18. 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
19. 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.
21. 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 consumer’s and
society’s well being.
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.
24. Building Customer Relationships
Customer Relationship Management is the
overall process
of building and
maintaining
profitable
customer
relationships
by delivering
superior customer value and satisfaction.
25. 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.
27. Customer Satisfaction and Relationships
Basic relationships
Full partnerships
Frequency marketing programs
Club marketing programs
28. The changing nature of customer relationship
• Relating with more carefully selected
customers
• Relating more deeply and interactively
29. 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
31. 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.
32. Capturing Value from Customers
Creating
Customer
Loyalty and
Retention
Growing
Share of
Customer
Building
Customer
Equity
33. 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
34. Customer Lifetime Value
• The value of the entire stream of purchases
that the customer would make over a lifetime
of patronage.
35. 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 “share of travel”
36. 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.
40. Review your Learning
• Identify a product of your choice and develop
its:
• Marketing process
• Marketing Strategy
• Marketing Plan
• Customer Relationship Management
• Capturing Customer Value
