Lecture # 1
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My Name is Kainat
Malik and I will be your
instructor for the
course Principles of
Marketing
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Chapter One
Marketing: Creating and Capturing
Customer Value
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Creating and Capturing Customer
Value
Chapter Outline
• What Is Marketing?
• Understand 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 a process by which companies
create value for customers and build
strong customer relationships to capture
value
from customers in
return
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What Is Marketing?
The Marketing Process
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Understanding the Marketplace
and Customer Needs
Core Concepts
• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
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Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
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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
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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
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Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations
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Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product
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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
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
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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.
Organization 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
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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
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Designing a Customer-Driven
Marketing Strategy
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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.
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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
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Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction
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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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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
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
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Marketing — Is It Good or Evil?
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So, What Is Marketing?
Pulling It All Together
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