FIRST CHAPTER OF PRINCIPLE OF MARKETING Chapter 1 Creating and capturing customer value

1. Principle of Marketing
Chapter 1
Creating and capturing customer value
➢ Market:-
The set of all actual and potential buyers of product or service.
➢ Marketing:-
The process by which companies create value for customers and build strong customer relationships in order to
capture value from customers in return.
Or
Marketing is the task of creating, promoting, and delivering the goods and services to customers and business.
➢ Marketing process:-
Create value for customers and Capture value from
Build customer relationships customers in return
Understand the
marketplace and
customer needs
and wants.
Design a
customer driven
marketing
strategy
Construct an
integrated marketing
program that delivers
superior value.
Build profitable
relationships
and create
customer
delight.
Capture value from
customers to create
profits and
customer equity.

2. ➢ Needs:-
Human needs are state of felt deprivation.
Example:-
Include basic physical needs for food, clothing, warmth, and safety
etc.
➢ Wants:-
The form of human needs take as shaped by culture and individual personality.
Example:-
People needs food but want a Big Mac.
➢ Demands:-
Human wants that are backed by buying power .
➢ Market Offering:-
Some combination of products, services, Information, or experiences offered to a market to
satisfy a need or want.
Example:-
Include banking, airline, hotel, tax preparation.

3. ➢ Marketing Myopia:-
The mistake paying more attention to the specific products a company offers than to the benefits and
experiences produced by these products.
➢ Exchange:-
The act of obtaining a desired object from someone by offering something in return.
➢ Production Concept:-
The idea that consumers will favor products that are available and highly affordable and that the organization,
should therefore focus on improving production and distribution efficiency.
For example:-
Computer maker Lenovo dominates the highly competitive, price sensitive Chinese PC market through low labor cost,
high production efficiency, and mass distribution.
➢ Product concept:-
The idea that consumers will favor products that offers the most quality, performance, and features, and that
the organization should therefore devote its energy to making continuous improvements products.
➢ Selling concept:-
The idea that consumer will not buy enough of the firm’s products unless it undertakes a large scale selling
and promotion effort.
➢ Marketing concept:-

4. That achieving organizational goals depends on knowing the needs and wants of target markets and delivering
the desired satisfactions better than competitors do.
The marketing concept is a customer centered “sense and respond”. The job is not to find the right customers
for your product, but to find the right products for your customers.
➢ Societal marketing concept:-
It holds that marketing strategy should deliver value to customers in a way that maintains
or improves both the consumer’s and the society’s well beings.
➢ Customer Relationship Management:-
The over all process of building and maintaining profitable customer relationships by delivering
superior value and satisfaction.
➢ Customer percieved value:-
The customer evaluation’s of the differnce between all the benefits and all the costs of a market offering relative to
those of competing offers .
➢ Customer satisfaction:-
To extent to which a product’s percieved performance matches a buyer’s expectation.
➢ Customer equity:-
The total combined customer life time values of all the company’s customer.
➢ Customer lifetime value:-
The value of all entire stream of purchases that a customer would make over lifetime of patronage.
➢ Strangers customers:-
Show low profitability and little projected loyalty. There is little fit betweeen company’s offering
their needs.

5. ➢ Butterflies customer:-
These customers are profitable biut not loyal. There is good fit between the company’s offering
and their needs.
➢ True friends:-
Are the both profitable and loyal. There is a strong fit between their needs and the company’s offerings.
➢ Barnacles customer:-
Are highly loyal but not very profitable. There is a limmited fit between their needs and the
company’s offerings.