Marketing involves creating value for customers to build relationships and capture value in return. The marketing process includes understanding customer needs, designing a customer-driven strategy, building relationships, and capturing value from customers. This involves selecting target customers, creating superior value propositions, and managing customer relationships to achieve loyalty, retention, and maximize lifetime customer value and equity. The changing landscape requires a focus on digital marketing, sustainability, globalization, and nonprofit marketing.

1. Marketing
Creating and Capturing Customer Value
Lecture 1 . Principles of Marketing
Kunthi Afrilinda Kusumawardani . President University
Hello!

2. What is Marketing?
The process by which companies
create value for customers
and build strong customer relationship
in order to capture value from
customer in return

3. Content
The Marketing Process
Understanding the
Marketplace and
Customer Need
Building Customer
Relationship
Designing a Customer-
Driven Marketing
Strategy
Capturing Value from
Customer
The Changing
Marketing Landscape

4. The Marketing Process
Understand
the marketplace
and customer
needs and wants
Design
a customer-
driven
marketing
strategy
Build
a profitable
relationship
and create
customer
delight
Construct
an integrated
marketing
program that
delivers
superior value
Capture
value from
customers to
create profits
and customer
equity
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5. Understanding the Marketplace and
Customer Need
Customer Needs, Wants, and Demand
States of felt
deprivation
The form human needs take as
they are shaped by culture and
individual personality
Human wants that are
backed by buying power
Needs Wants Demands

6. Understanding the Marketplace and
Customer Need
Marketing Offering – Product, Service and Experiences
Market Offering
Some combination of
products, services,
information, or experiences
offered to a market to
satisfy a need or want
The mistake of paying more
attention to the specific
products a company offers
than to the benefits and
experiences produced by
these products
Marketing Myopia

7. Designing a Customer-Driven Marketing Strategy
S e l e c t i n g
C u s t o m e r t o S e r ve
D e c i d e
whom to be served,
c r e a t e
market segmentation
S e l e c t
which segment,
c r e a t e
target marketing
C h o o s i n g a
Va l u e P r o p o s i t i o n
D e c i d e
how it will serve
targeted customer,
how it will differentiate
and position in market place

8. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientation
products that are
available and
highly affordable and
distribution efficiency
Consumer will favor
products that offer
most quality,
performance, and
features, and focus
on continuous
improvement
Achieving
organizational goals
depends on
knowing the needs
and wants of target
markets and
delivering the
desired satisfaction
better than
competitors do
Company’s
marketing
decisions should
consider
consumers’ wants,
company’s
requirements,
consumer’s long
run interest, and
society’s long run
interest
Consumer will not
buy enough of
firm’s product
unless it
undertakes
a large scale selling
and
promotion effort
The production
concept
The product
concept
The selling
concept
The marketing
concept
The societal
marketing
concept

9. Building Customer Relationship
C u s t o m e r
R e l a t i o n s h i
p
M a n a g e m e n t
The overall process of
building and maintaining
profitable customer relationship by
delivering superior customer value and
satisfaction
The customer evaluation of
the difference between
all the benefits and
all the costs of a marketing
offer relative to those of
competing offers
C u s t o m e r
Va l u e
The extent to which a product’s
perceived performance matches
a buyer’s expectation
C u s t o m e r
S a t i s f a c t i o n

10. Building Customer Relationship
Customer relationship levels and tools
e.g. Nike with end customer
High margin customers company
need full partnership E.g. Nike with Foot Locker
(retailer)
Low margin
customers company
only do
basic relationship
(brand-ad, PR)

11. Building Customer Relationship
The changing nature of customer relationship
From true mass
marketing to
fewer target but more
profitable customer
(selective)
Two way customer
relationship
(customer voice and
role in brand
experience or co
creation)
Companies ask
consumers for new
product ideas
(e.g doritos, coca cola,
cosmetics)

12. Building Customer Relationship
Partner Relationship Management
Marketing not only be done by marketing
division, but all people in that company
Through supply-chain management,
companies strengthening connection with
suppliers, manufacturers, distributors, and
retailers

13. Capturing Value from Customer
Losing a customer
means losing more than
a single sale
Marketers should care
not just about current
sales and market share,
but also lifetime value
and customer equity
Customer equity:
the total combined
customer lifetime values
of all the company’s
customer
C r e a t i n g
c u s t o m e r
l o y a l t y a n d
r e t e n t i o n
B u i l d i n g
c u s t o m e r
e q u i t y

14. Barnacles
True Friends
Butterfly
Strangers
Capturing Value from Customer
Highly loyal but not very profitable
(e.g. smaller bank customer)
The most problematic customer, if
can’t be made profitable, “fire” them
do not invest anything
Continuous relationship
investments is a must
Capture as much for their
business as possible
From “true
friends” to “true
believer” →
come back
regularly and
tell others about
their good
experience
Potentially profitable but not loyal
(e.g. stock market investor)
P r o j e c t e d
L o y a l t y
P
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t
e
n
t
i
a
l
P
r
o
f
i
t
a
b
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l
i
t
y

15. The Changing Marketing Landscape
The uncertain economic environment
cutting in wrong places can
damage long-term brand images
and customer relationships
Uncertain economy caused many
consumer to rethink spending and
cut back
It helps to communicate with
customers in large groups or
one-to-one
Marketing become a major part of
strategies of colleges, hospitals,
museums, zoos
The digital age
The growth of Not-for-
Profit Marketing
Sustainable marketing is an
opportunity to do well
by doing good
Every company action can affect
customer relationship
Sustainable marketing
Rapid Globalization

16. Conclusion
M a r k e t i n g i s
the process of building profitable
c u s t o m e r r e l a t i o n s h i p s
by creating value for customers
and capturing value in return