Marketing:Creating and Capturing Customer Value

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1This is a sample lecture on Marketing, Chapter 1 from the texbook Kotler, P. & Armstrong, G. (2012). Principles of Marketing. New Jersey: Prentice-Hall.

This sample lecture was prepared for Ashford Unversity, 2011.Upon completion of this lecture, a certificate of completion is available from Alpha & Omega Healthcare Management Consulting. For the certificate, please contact tripthimathew@alphanomega.info or DrMathewTM@gmail.com

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  • This lecture on Marketing highlights the material covered in Chapter 1 of the textbook by Kotler, P., & Armstrong, G. (2012). Principles of Marketing. New Jersey: Pearson Education, Inc Prentice-Hall. I have added additional material not covered in the textbook by inserting slides 3, 4, 5, 6 and slide 40 (references). Please also refer to the course guidance/lecture (my instructor notes) posted under instructor guidance of week 1 which supplements this lecture slides and chapter 1 of the textbook. I also recommend researching from Ashford University Library database (EBSCO Host) and reading the two articles below:1) Levitt, T. (2004). Marketing Myopia. Harvard Business Review, 82 (7/8),138-149.Smith, N. C., Drumwright, M.E., & Gentile, M.C. (2010). The New Marketing Myopia. Journal of Public Policy & Marketing, 29 (1), 4-11.Furthermore, in your course guidance and slide # 32, I have posted a web link, a short You Tube Video on Stew Leonard’s Grocery Supermarket for you to watch. This is different from the video case study mentioned in the textbook. Please complete the activities/assignments mentioned in the course guidance.At the end of the presentation/lecture there is a 1 question/quiz as a survey (last slide) which can be watched on Brainshark. Please don’t forget to rate this lecture and post your comments. Thank you.
  • This important figure shows marketing ina nutshell! By creating value for customers,marketers capture value from customers inreturn. This five-step process forms themarketing framework for the rest ofthe chapter and the remainder of the book.
  • Marketing:Creating and Capturing Customer Value

    1. 1. Marketing: Creating and Capturing Customer Value<br />Dr. Tripthi M. Mathew, MD, MPH, MBA<br /> President & CEO, <br /> Alpha & Omega Healthcare Management Consulting<br />http://www.alphanomega.info<br /> Lectured at Ashford University, July 11, 2011 <br />
    2. 2. Creating and Capturing Customer Value<br />What Is Marketing?<br />Understand the Marketplace and Customer Needs<br />Designing a Customer-Driven Marketing Strategy<br />Preparing an Integrated Marketing Plan and Program<br />Building Customer Relationships<br />Capturing Value from Customers<br />The Changing Marketing Landscape<br />Topic Outline<br />
    3. 3. What Is Marketing?<br />Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return <br />The most simple definition of marketing is “managing profitable customer relationships” <br /> (Kotler, P., & Armstrong, G., 2012)<br />
    4. 4. What is Marketing? (cont’d)<br />Marketing is defined as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”(American Marketing Association, 2007).<br />According to UK’s Chartered Institute of Marketing, “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”(Dibb, S., & Simkin, L., 2004).<br />
    5. 5. “Marketing is a process that identifies market opportunities, satisfies customers, creates an edge over rivals, differentiates the product or service and generates suitable financial rewards for the business”.<br /> (Dibb, S., & Simkin, L., 2004) <br />The Marketing Process<br />
    6. 6. Marketing process consists of market analysis, formulation of marketing strategy, tactical marketing mix programs and operational controls to implement.<br />Traditionally, the marketing mix consisted of the 4 P's (Product, Place, Price, and Promotion). In recent time, it has been extended to three more (People, Processes and Physical Environment) making it 7 P’s. <br />In subsequent chapters we will be covering the marketing process in detail.<br />The Marketing Process Cont’d<br />
    7. 7. The Marketing Process Cont’d<br />
    8. 8. Understanding the Marketplaceand Customer Needs<br />Customer Needs, Wants, and Demands<br />
    9. 9. Understanding the Marketplaceand Customer Needs<br />Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want<br />Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs<br />
    10. 10. Understanding the Marketplaceand Customer Needs<br />Customer Value and Satisfaction<br />Expectations<br />
    11. 11. Exchange is the act of obtaining a desired object from someone by offering something in return<br />Understanding the Marketplaceand Customer Needs<br />
    12. 12. Understanding the Marketplaceand Customer Needs<br />Markets are the set of actual and potential buyers of a product <br />
    13. 13. Designing a Customer-Driven Marketing Strategy<br />Marketing management is the art and science of choosing target markets and building profitable relationships with them<br />What customers will we serve?<br />How can we best serve these customers?<br />
    14. 14. Designing a Customer-Driven Marketing Strategy<br />Market segmentation refers to dividing the markets into segments of customers<br />Target marketing refers to which segments to go after<br />Selecting Customers to Serve<br />
    15. 15. Designing a Customer-Driven Marketing Strategy<br />Choosing a Value Proposition<br />Value proposition Set of benefits or values a company promises to deliver to customers to satisfy their needs<br />
    16. 16. Designing a Customer-Driven Marketing Strategy<br />Marketing Management Orientations<br />
    17. 17. Designing a Customer-Driven Marketing Strategy<br />Production concept is the idea that consumers will favor products that are available or highly affordable<br />Marketing Management Orientations<br />
    18. 18. Designing a Customer-Driven Marketing Strategy<br />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.<br />Marketing Management Orientations<br />
    19. 19. Designing a Customer-Driven Marketing Strategy<br />Marketing Management Orientations<br />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<br />
    20. 20. Designing a Customer-Driven Marketing Strategy<br />Marketing Management Orientations<br />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<br />
    21. 21. Designing a Customer-Driven Marketing Strategy<br />Marketing Management Orientations<br />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<br />
    22. 22. Designing a Customer-Driven Marketing Strategy<br />
    23. 23. The marketing mix: set of tools (four Ps) the firm uses to implement its marketing strategy. It includes product, price, promotion, and place.<br />Integrated marketing program: comprehensive plan that communicates and delivers the intended value to chosen customers.<br />Preparing an Integrated Marketing Plan and Program<br />
    24. 24. Building Customer Relationships<br />Customer Relationship Management (CRM)<br />The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction<br />
    25. 25. Building Customer Relationships<br />Relationship Building Blocks: Customer Value and Satisfaction<br />
    26. 26. Building Customer Relationships<br />Customer Relationship Levels and Tools<br />
    27. 27. Building Customer Relationships<br />Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers<br />Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks<br />The Changing Nature of Customer Relationships<br />
    28. 28. Building Customer Relationships<br />Customer-managed relationships<br />Marketing relationships in which<br />customers, empowered by today’s new<br />digital technologies, interact with<br />companies and with each other to shape<br />their relationships with brands.<br />The Changing Nature of Customer Relationships<br />
    29. 29. Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers<br />Building Customer Relationships<br />
    30. 30. Building Customer Relationships<br />Partners inside the company is every function area interacting with customers<br />Electronically<br />Cross-functional teams<br />Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships<br />Partner Relationship Management<br />
    31. 31. Building Customer Relationships<br />Supply chain is a channel that stretches from raw materials to components to final products to final buyers<br />Supply chain management<br />Partner Relationship Management<br />
    32. 32. Capturing Value from Customers<br />Customer lifetime value is the value of the entire stream of purchases that the customer wouldmake over a lifetime of patronage<br />Creating Customer Loyalty and Retention<br />
    33. 33. Capturing Value from Customers<br />Share of customer is the portion of the customer’s purchasing that a company gets in its product categories<br />Growing Share of Customer<br />
    34. 34. Capturing Value from Customers<br />Customer equity is the total combined customer lifetime values of all of the company’s customers<br />
    35. 35. Capturing Value from Customers<br />Right relationships with the right customers involves treating customers as assets that need to be managed and maximized<br />Different types of customers require different relationship management strategies<br />Building Customer Equity<br />
    36. 36. The Changing Marketing Landscape<br />Uncertain Economic Environment<br /><ul><li>New consumer frugality
    37. 37. Marketers focus on value for the customer</li></li></ul><li>The Changing Marketing LandscapeDigital Age<br /><ul><li>People are connected continuously to people and information worldwide
    38. 38. Marketers have great new tools to communicate with customers
    39. 39. Internet + mobile communication devices creates environment for online marketing</li></li></ul><li>The Changing Marketing Landscape<br /><ul><li>Rapid Globalization
    40. 40. Sustainable Marketing
    41. 41. Not-for-Profit Marketing</li></li></ul><li>So, What Is Marketing? Pulling It All Together<br />
    42. 42. References<br />American Marketing Association Board of Directors (2007). Definition of Marketing. American Marketing Association website Retrieved July 11, 2011, fromhttp://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx<br />Dibb, S., & Simkin, L. (2004). Marketing Briefs. A Revision & Study Guide. Oxford: Elsevier Butterworth-Heinemann.<br />Kotler, P. & Armstrong, G. (2012). Principles of Marketing. New Jersey: Pearson Education, Inc., Publishing as Prentice-Hall.<br />
    43. 43. 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.<br />Copyright © 2012 Pearson Education, Inc.  <br />Publishing as Prentice Hall<br />

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