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, Inc.
Chapter 1- slide 2
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 3
Publishing as Prentice Hall
Understanding the Marketplace
and Customer Needs
Core Concepts
Customer needs, wants, and demands
Market offerings
Customer Value and satisfaction
Exchanges and relationships
Markets
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 4
Publishing as Prentice Hall
Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
States of deprivation
Physicalfood, clothing, warmth, safety
Needs Socialbelonging and affection
Individualknowledge and self-expression
Form that human needs take as they are shaped by
Wants culture and individual personality
Demands Human wants backed by buying power
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 5
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 6
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 7
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 8
Publishing as Prentice Hall
Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product or service
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 9
Publishing as Prentice Hall
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?
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 10
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 11
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 12
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 13
Publishing as Prentice Hall
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production Product Selling Marketing Societal
concept concept concept concept concept
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 14
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 15
Publishing as Prentice Hall
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.
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 16
Publishing as Prentice Hall
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Selling concept is the idea that
consumers will not buy enough of the
firms products unless it undertakes a
large scale selling and promotion effort
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 17
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 18
Publishing as Prentice Hall
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 companys
requirements, consumers long-term
interests, and societys long-run
interests
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 19
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 20
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 21
Publishing as Prentice Hall
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 products
and total perceived
customer cost performance
matches a
buyers
expectations
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 22
Publishing as Prentice Hall
Building Customer Relationships
Customer Relationship Levels and Tools
Basic
Relationships
Full
Partnerships
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 23
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 24
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 25
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 26
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 27
Publishing as Prentice Hall
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
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 28
Publishing as Prentice Hall
Capturing Value from Customers
Growing Share of Customer
Share of customer is the portion of the
customers purchasing that a company
gets in its product categories
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 29
Publishing as Prentice Hall
Capturing Value from Customers
Customer equity is the total combined
customer lifetime values of all of the
companys customers
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 30
Publishing as Prentice Hall
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, Inc.
Chapter 1- slide 31
Publishing as Prentice Hall
The New Marketing Landscape
Major Developments
Rapid
Digital age
globalization
Ethics and
Not-for-profit
social
marketing
responsibility
Copyright 2010 Pearson Education, Inc.
Chapter 1- slide 32
Publishing as Prentice Hall