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Creating and Capturing Customer Value 1

Chapter 1
by

Mario Mata

on 17 September 2014

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Transcript of Creating and Capturing Customer Value 1

Figure 1.6:

An Expanded Model of the Marketing Process
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Transforms the marketing strategy into action.
Includes the marketing mix and 4 Ps of marketing:
Product.
Price.
Place (Distribution).
Promotion.
The Integrated Marketing Plan
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The societal marketing concept:
The idea that a company’s marketing decisions should consider consumer’s wants, the company’s desires, consumers’ long-run interests and society’s long-run interests.
The Societal
Marketing Concept
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Organizations design and carry out their marketing strategies under five alternate concepts:
Production Concept.
Product Concept.
Selling Concept.
Marketing Concept.
Societal Marketing Concept.
Marketing Management Orientations
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The art and science of choosing target markets and building profitable relationships with them.
Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value.
Marketing Management
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
A market:
Is the set of actual and potential buyers of a product.
These people share a need or want that can be satisfied through exchange relationships.
What Is a Market?
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Care must be taken when setting expectations for market offerings:
If performance is lower than expectations, satisfaction is low.
If performance is higher than expectations, satisfaction is high.
Customer Value and Satisfaction
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Simple definition: Marketing is managing profitable customer relationships.

Goals:
Attract new customers by promising superior value.
Keep and grow current customers by delivering satisfaction.
What Is Marketing?
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Chapter 1
Marketing:

Creating and Capturing Customer Value

Rest Stop: Reviewing the Concepts
Define marketing and the marketing process.
Explain the importance of understanding customers and identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide strategy.
Discuss customer relationship management and identify strategies for creating value for and capturing value from customers.
Describe the major trends and forces that are changing the marketing landscape.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
200,000 new donors contributed $30 million to the APSCA as a result of “The Ad”
66% of McDonald’s revenue now comes from outside the US.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Johnson & Johnson’s credo stresses putting people before profits—the societal marketing concept in action.
Visit The Body Shop’s Web site for another example of firm which practices the societal marketing concept.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 1.4:

The Considerations Underlying the Societal Marketing Concept
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 1.3:

The Selling and Marketing Concepts Contrasted
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Many firms are emphasizing the “value” in their value proposition during tough economic times.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
What is Harley Davidson’s Value Proposition?
Watch the video and find out!
The set of benefits or values a company promises to deliver to consumers to satisfy their needs.
Value propositions dictate how firms will differentiate and position their brands in the marketplace.
Choosing a Value Proposition
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Market segmentation:
Dividing the market into segments of customers.
Target marketing:
Selecting one or more segments to cultivate.
Selecting Customers to Serve
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 1.2:

A Modern Marketing System
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Exchange:
Act of obtaining a desired object from someone by offering something in return.
What would be exchanged for a vacation?
Exchanges and Relationships
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Advertising sets expectations, and marketers must be careful not to promise too much.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The music industry provides an excellent example of marketing myopia, as firms were initially very reluctant to adapt to consumers’ desires for digital music downloads.

Can you think of another company, product, service, or industry that may be endangering its future due to a marketing myopia?

Fuel for Thought
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Marketing myopia:
Occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.
They focus on the “wants” and lose sight of the “needs.”
Marketing Myopia
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Market offerings are not limited to physical products. UNCF powerfully markets the idea that “A mind is a terrible thing to waste.”
Marketing in Action
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Is ice cream a “need”?
Types of Needs:

Physical needs:
Food, clothing, shelter, safety.

Social needs:
Belonging, affection.

Individual needs:
Learning, knowledge, self-expression.
Needs, Wants, and Demands
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Need: State of felt deprivation including physical, social, and individual needs.
Physical, social, and individual needs.
Wants: Form that a human need takes, as shaped by culture and individual personality.
Wants + Buying Power = Demand.
Needs, Wants, and Demands
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Marketers must understand five core customer and marketplace concepts:
Needs, wants, and demands.
Market offerings.
Value and satisfaction.
Exchanges and relationships.
Markets.
Core Concepts
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Rest Stop: Previewing the Concepts
Define marketing and the marketing process.
Explain the importance of understanding customers and identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide strategy.
Discuss customer relationship management and identify strategies for creating value for and capturing value from customers.
Describe the major trends and forces that are changing the marketing landscape.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright © 2011 Pearson Education, Inc.  
Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Customer Relationship Management
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The marketing concept:
A marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors.
The Marketing Concept
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1. What customers will we serve?
— What is our target market?

2. How can we best serve these customers?
— What is our value proposition?
Designing a winning marketing strategy requires answers to the following questions:
Marketing Management
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Relationships:
Marketing actions build and maintain relationships with target audiences involving an idea, product, service, or other object.
Marketers build strong relationships by consistently delivering superior customer value.
Exchanges and Relationships
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
New View: Satisfying Needs
Old View: “Telling and Selling”
Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Marketing Defined
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Building Relationships

Service Culture: Built around 10 core principles; every new hire has 4 weeks of customer loyalty training.
Commitment: Employees are offered $2,000 to quit, only 1% do so.
Lifelong relationships are the goal: Social networking provides direct contact to customers; buyer feedback and criticism is strongly encouraged and valued.
First Stop
Zappos Creates Customer Value & Relationships
Customer Value

Goal: Provide the very best customer service & customer experience.
Customer-centric: Free delivery, free returns, 365 day return policy & service upgrades.
Results: 75% of sales come from current customers, tremendous sales growth despite poor economy, 10 million customers.
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Marketing offers fulfill needs and wants
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Market Offerings
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The selling Concept takes and inside-out view that focuses on existing products and heavy selling.
The aim is to sell what the company makes rather than making what the customer wants
The marketing concept takes an outside-in view that focuses on satisfying customer needs as a path to profits. As South west Airlines colorful founder puts it, "We dont have a Marketing department, we have a Customer department"
Full transcript