Chapter One
Creating and Capturing Customer
Value
Copyright © 2009 Pearson Education, Inc. Chapter 1- slide 1
Publishing as Prentice Hall
Creating and Capturing Customer
Value
Topic Outline
• Define marketing and outline the steps in the
marketing process
• 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
Copyright © 2010 Pearson Education, Chapter 1- slide 2
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What Is Marketing?
Marketing is a process by which
companies create value for customers
and build strong customer relationships
to capture value from customers in
return
Copyright © 2010 Pearson Education, Chapter 1- slide 3
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Understanding the Marketplace
and Customer Needs
Core Concepts
• Customer needs, wants, and demands
• Market offerings
• Customer Value and satisfaction
• Exchanges and relationships
• Markets
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Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
• States of deprivation
Needs • Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Want • Form that human needs take as they are shaped by
culture and individual personality
s
Demands • Human wants backed by buying power
Copyright © 2010 Pearson Education, Chapter 1- slide 5
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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 or want
• Marketing myopia is focusing only on
existing wants and losing sight of
underlying consumer needs
Copyright © 2010 Pearson Education, Chapter 1- slide 6
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Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations
Customers
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low
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Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a
desired object from someone by offering
something in return
Copyright © 2010 Pearson Education, Chapter 1- slide 8
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Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product or service
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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
– What customers will we serve?
– How can we best serve these customers?
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Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing
the markets into segments of customers
Target marketing refers to which
segments to go after
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Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Demarketing is marketing to reduce
demand temporarily or permanently; the
aim is not to destroy demand but to
reduce or shift it
Copyright © 2010 Pearson Education, Chapter 1- slide 12
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Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition
• The value proposition is the set of
benefits or values a company promises
to deliver to customers to satisfy their
needs
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production Product Selling Marketing Societal
concept concept concept
concept concept
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production concept is the idea that
consumers will favor products that are
available or highly affordable
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Product concept is the idea that
consumers will favor products that offer
the most quality, performance, and
features. Organizations should
therefore devote its energy to making
continuous product improvements.
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Selling concept is the idea that
consumers will not buy enough of the
firm’s products unless it undertakes
a
large scale selling and promotion effort
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Marketing concept is the idea that
achieving organizational goals depends
on knowing the needs and wants of
the target markets and delivering the
desired satisfactions better than
competitors do
Copyright © 2010 Pearson Education, Chapter 1- slide 18
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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Societal marketing concept is the idea
that a company should make good
marketing decisions by considering
consumers’ wants, the company’s
requirements, consumers’ long-term
interests, and society’s long-run
interests
Copyright © 2010 Pearson Education, Chapter 1- slide 19
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Preparing an Integrated Marketing
Plan and Program
• The marketing mix is the set of tools
(four Ps) the firm uses to implement its
marketing strategy. It includes
product, price, promotion, and place.
• Integrated marketing program is a
comprehensive plan that communicates
and delivers the intended value to
chosen customers.
Copyright © 2010 Pearson Education, Chapter 1- slide 20
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Building Customer Relationships
Customer Relationship Management
(CRM)
• The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction
Copyright © 2010 Pearson Education, Chapter 1- slide 21
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Building Customer Relationships
Relationship Building Blocks: Customer
Value and Satisfaction
Customer Customer
perceived value satisfaction
• The difference • The extent to
between total which a
customer value product’s
and total perceived
customer cost performance
matches a
buyer’s
expectations
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Building Customer Relationships
Customer Relationship Levels and Tools
Basic
Relationships
Full
Partnerships
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Building Customer Relationships
The Changing Nature of Customer
Relationships
• Relating with more carefully selected
customers uses selective relationship
management to target fewer, more
profitable customers
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, Websites,
online communities and social networks
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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
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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
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Building Customer Relationships
Partner Relationship Management
• Supply chain is a channel that stretches
from raw materials to components to
final products to final buyers
• Supply management
• Strategic partners
• Strategic alliances
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Capturing Value from Customers
Creating Customer Loyalty and
Retention
• Customer lifetime value is the value of
the entire stream of purchases that the
customer would make over a lifetime
of patronage
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Capturing Value from Customers
Growing Share of Customer
Share of customer is the portion of the
customer’s purchasing that a company
gets in its product categories
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Capturing Value from Customers
Customer equity is the total combined
customer lifetime values of all of the
company’s customers
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Capturing Value from Customers
Building Customer Equity
• Building the right relationships with the
right customers involves treating
customers as assets that need to be
managed and maximized
• Different types of customers require
different relationship management
strategies
– Build the right relationship with the right
customers
Copyright © 2010 Pearson Education, Chapter 1- slide 31
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The New Marketing Landscape
Major Developments
Rapid
Digital age
globalization
Ethics and
Not-for-profit
social
marketing
responsibility
Copyright © 2010 Pearson Education, Chapter 1- slide 32
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