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Chapter One Marketing: Creating and Capturing Customer Value
Creating and Capturing Customer Value <ul><li>Define marketing and outline the steps in the marketing process. </li></ul><...
What Is Marketing? <ul><li>Marketing  is a process by which companies create value for customers and build strong customer...
The Marketing Process  (Fig. 1.1) Needs Wants Demands Who will we serve? How will we be different? Marketing Mix Product  ...
Understanding the Marketplace  and Customer Needs <ul><li>Customer needs, wants, and demands </li></ul><ul><li>Market offe...
Understanding the Marketplace  and Customer Needs <ul><li>Customer Needs, Wants, and Demands </li></ul><ul><li>Need </li><...
Understanding the Marketplace  and Customer Needs <ul><li>Customer Needs, Wants, and Demands </li></ul>
Understanding the Marketplace and Customer Needs <ul><li>Market offerings  are some combination of products, services, inf...
Understanding the Marketplace and Customer Needs <ul><li>Customer Value and Satisfaction Expectations </li></ul>
<ul><li>Exchange  is the act of obtaining a desired object from someone by offering something in return </li></ul>Understa...
Understanding the Marketplace and Customer Needs <ul><li>Markets  are the set of actual and potential buyers of a product ...
<ul><li>Marketing management  is the art and science of choosing target markets and building profitable relationships with...
Designing a Customer-Driven Marketing Strategy <ul><li>Market segmentation  refers to dividing the markets into segments o...
Designing a Customer-Driven Marketing Strategy <ul><li>Choosing a Value Proposition </li></ul>The  value proposition  is t...
Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>
Designing a Customer-Driven Marketing Strategy <ul><li>Production concept  is the idea that consumers will favor products ...
Designing a Customer-Driven Marketing Strategy <ul><li>Product concept  is the idea that consumers will favor products tha...
Designing a Customer-Driven Marketing Strategy <ul><li>Selling concept  is the idea that consumers will not buy enough of ...
Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>Marketing concept  is t...
Designing a Customer-Driven Marketing Strategy <ul><li>Figure 1.3 The selling and marketing concepts contrasted </li></ul>
Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>Societal marketing  con...
<ul><li>The marketing mix  is the set of tools (four Ps) the firm uses to implement its marketing strategy. It includes pr...
Building Customer Relationships <ul><li>The overall process of building and maintaining profitable customer relationships ...
Building Customer Relationships <ul><li>Relationship Building Blocks: Customer Value and Satisfaction </li></ul>
Building Customer Relationships <ul><li>Customer Relationship Levels and Tools </li></ul>
Building Customer Relationships <ul><li>Relating with more carefully selected customers uses selective relationship manage...
Building Customer Relationships <ul><li>Partner relationship management  involves working closely with partners in other c...
Building Customer Relationships <ul><li>Partners inside the company is every function area interacting with customers </li...
Building Customer Relationships <ul><li>Supply chain is a channel that stretches from raw materials to components to final...
Capturing Value from Customers <ul><li>Customer lifetime value is the value of the entire stream of purchases that the cus...
Capturing Value from Customers <ul><li>Share of customer  is the portion of the customer’s purchasing that a company gets ...
Capturing Value from Customers <ul><li>Customer equity  is the total combined customer lifetime values of all of the compa...
Capturing Value from Customers <ul><li>Building the right relationships with the right customers involves treating custome...
Capturing Value from Customers <ul><li>Building the Right Relationships with the Right Customers </li></ul>Projected loyal...
So, What Is Marketing?  Pulling It All Together
The Changing Marketing Landscape <ul><li>Major Developments </li></ul>
The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Glob...
The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Glob...
The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Glob...
The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Glob...
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Marketing - Chapter 1

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Marketing - Chapter 1

  1. 1. Chapter One Marketing: Creating and Capturing Customer Value
  2. 2. Creating and Capturing Customer Value <ul><li>Define marketing and outline the steps in the marketing process. </li></ul><ul><li>Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts. </li></ul><ul><li>Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. </li></ul><ul><li>Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. </li></ul><ul><li>Describe the major trends and forces that are changing the marketing landscape in this age of relationships. </li></ul><ul><li>Objectives </li></ul>
  3. 3. What Is Marketing? <ul><li>Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return </li></ul>But how do we create value?
  4. 4. The Marketing Process (Fig. 1.1) Needs Wants Demands Who will we serve? How will we be different? Marketing Mix Product Price Place Promotion CRM Are we actually creating value? Are our customers satisfied? Customer Lifetime Value Share of Customer Customer Equity
  5. 5. Understanding the Marketplace and Customer Needs <ul><li>Customer needs, wants, and demands </li></ul><ul><li>Market offerings (products and services) </li></ul><ul><li>Value and satisfaction </li></ul><ul><li>Exchanges and relationships </li></ul><ul><li>Markets </li></ul><ul><li>Core Concepts </li></ul>
  6. 6. Understanding the Marketplace and Customer Needs <ul><li>Customer Needs, Wants, and Demands </li></ul><ul><li>Need </li></ul><ul><ul><li>State of felt deprivation </li></ul></ul><ul><li>Wants </li></ul><ul><ul><li>The form human needs take as shaped by culture and individual personality. </li></ul></ul><ul><li>Demands </li></ul><ul><ul><li>Wants which are backed by buying power </li></ul></ul>
  7. 7. Understanding the Marketplace and Customer Needs <ul><li>Customer Needs, Wants, and Demands </li></ul>
  8. 8. Understanding the Marketplace and Customer Needs <ul><li>Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want </li></ul><ul><li>Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs </li></ul>
  9. 9. Understanding the Marketplace and Customer Needs <ul><li>Customer Value and Satisfaction Expectations </li></ul>
  10. 10. <ul><li>Exchange is the act of obtaining a desired object from someone by offering something in return </li></ul>Understanding the Marketplace and Customer Needs
  11. 11. Understanding the Marketplace and Customer Needs <ul><li>Markets are the set of actual and potential buyers of a product </li></ul>
  12. 12. <ul><li>Marketing management is the art and science of choosing target markets and building profitable relationships with them </li></ul><ul><ul><li>What customers will we serve? </li></ul></ul><ul><ul><li>How can we best serve these customers? </li></ul></ul>Designing a Customer-Driven Marketing Strategy
  13. 13. Designing a Customer-Driven Marketing Strategy <ul><li>Market segmentation refers to dividing the markets into segments of customers </li></ul><ul><li>Target marketing refers to which segments to go after </li></ul><ul><li>Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it. </li></ul><ul><li>Selecting Customers to Serve </li></ul>
  14. 14. Designing a Customer-Driven Marketing Strategy <ul><li>Choosing a Value Proposition </li></ul>The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs
  15. 15. Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>
  16. 16. Designing a Customer-Driven Marketing Strategy <ul><li>Production concept is the idea that consumers will favor products that are available or highly affordable </li></ul><ul><li>Marketing Management Orientations </li></ul>
  17. 17. Designing a Customer-Driven Marketing Strategy <ul><li>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. </li></ul><ul><li>Marketing Management Orientations </li></ul>
  18. 18. Designing a Customer-Driven Marketing Strategy <ul><li>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 </li></ul><ul><li>Marketing Management Orientations </li></ul><ul><li>Have you ever been asked: </li></ul><ul><ul><li>Would you like fries with that? </li></ul></ul><ul><ul><li>Would you like that super sized? </li></ul></ul>
  19. 19. Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>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
  20. 20. Designing a Customer-Driven Marketing Strategy <ul><li>Figure 1.3 The selling and marketing concepts contrasted </li></ul>
  21. 21. Designing a Customer-Driven Marketing Strategy <ul><li>Marketing Management Orientations </li></ul>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
  22. 22. <ul><li>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. </li></ul><ul><li>Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers. </li></ul>Preparing an Integrated Marketing Plan and Program
  23. 23. Building Customer Relationships <ul><li>The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction </li></ul><ul><li>Customer Relationship Management (CRM) </li></ul>
  24. 24. Building Customer Relationships <ul><li>Relationship Building Blocks: Customer Value and Satisfaction </li></ul>
  25. 25. Building Customer Relationships <ul><li>Customer Relationship Levels and Tools </li></ul>
  26. 26. Building Customer Relationships <ul><li>Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers </li></ul><ul><li>Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks </li></ul><ul><li>The Changing Nature of Customer Relationships </li></ul>
  27. 27. Building Customer Relationships <ul><li>Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers </li></ul>
  28. 28. Building Customer Relationships <ul><li>Partners inside the company is every function area interacting with customers </li></ul><ul><ul><li>Electronically </li></ul></ul><ul><ul><li>Cross-functional teams </li></ul></ul><ul><li>Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships </li></ul><ul><li>Partner Relationship Management </li></ul>
  29. 29. Building Customer Relationships <ul><li>Supply chain is a channel that stretches from raw materials to components to final products to final buyers </li></ul><ul><li>Supply management </li></ul><ul><li>Strategic partners </li></ul><ul><li>Strategic alliances </li></ul><ul><li>Partner Relationship Management </li></ul>
  30. 30. Capturing Value from Customers <ul><li>Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage </li></ul><ul><li>Creating Customer Loyalty and Retention </li></ul>
  31. 31. Capturing Value from Customers <ul><li>Share of customer is the portion of the customer’s purchasing that a company gets in its product categories </li></ul><ul><li>Growing Share of Customer </li></ul>What’s your favourite Brand? What products would you like to see your favourite brand come out with?
  32. 32. Capturing Value from Customers <ul><li>Customer equity is the total combined customer lifetime values of all of the company’s customers </li></ul>
  33. 33. Capturing Value from Customers <ul><li>Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized </li></ul><ul><li>Different types of customers require different relationship management strategies </li></ul><ul><ul><li>Build the right relationship with the right customers </li></ul></ul><ul><li>Building Customer Equity </li></ul>
  34. 34. Capturing Value from Customers <ul><li>Building the Right Relationships with the Right Customers </li></ul>Projected loyalty High Profitability Low Long-term customers Short-term customers Good fit between company’s offerings and customer’s needs; high profit potential Limited fit between company’s offerings and customer’s needs; low profit potential Little fit between company’s offerings and customer’s needs; lowest profit potential Good fit between company’s offerings and customer’s needs; highest profit potential Strangers Butterflies True Friends Barnacles
  35. 35. So, What Is Marketing? Pulling It All Together
  36. 36. The Changing Marketing Landscape <ul><li>Major Developments </li></ul>
  37. 37. The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Globalization </li></ul></ul><ul><ul><li>Ethics and Social responsibility </li></ul></ul><ul><ul><li>Not-for-profit Marketing </li></ul></ul><ul><li>Advances in computers, telecommunications information, transportation </li></ul><ul><ul><li>Customer research and tracking </li></ul></ul><ul><ul><li>Product development </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>New advertising tools </li></ul></ul><ul><ul><li>24/7 marketing through the Internet </li></ul></ul>
  38. 38. The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Globalization </li></ul></ul><ul><ul><li>Ethics and Social responsibility </li></ul></ul><ul><ul><li>Not-for-profit Marketing </li></ul></ul><ul><li>Geographical and cultural distances have shrunk </li></ul><ul><ul><li>Greater market coverage </li></ul></ul><ul><ul><li>More options for purchasing and manufacturing </li></ul></ul><ul><ul><li>Increased competition from foreign competitors </li></ul></ul>
  39. 39. The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Globalization </li></ul></ul><ul><ul><li>Ethics and Social responsibility </li></ul></ul><ul><ul><li>Not-for-profit Marketing </li></ul></ul><ul><li>Marketers need to take great responsibility for the impact of their actions </li></ul><ul><ul><li>Caring capitalism is a way to differentiate your company </li></ul></ul>
  40. 40. The New Marketing Landscape <ul><li>Challenges </li></ul><ul><ul><li>The Digital Age </li></ul></ul><ul><ul><li>Rapid Globalization </li></ul></ul><ul><ul><li>Ethics and Social responsibility </li></ul></ul><ul><ul><li>Not-for-profit Marketing </li></ul></ul><ul><li>Many non-profit organizations are realizing the importance of strategic marketing </li></ul><ul><ul><li>Performing arts </li></ul></ul><ul><ul><li>Government agencies </li></ul></ul><ul><ul><li>Colleges </li></ul></ul><ul><ul><li>Hospitals </li></ul></ul><ul><ul><li>Churches </li></ul></ul>

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