marketing: creating and capturing customer value

Topic One: Introduction

Objectives

• Course Organization• Tasks of Marketing• Major Concepts & Tools of Marketing• Marketplace Orientations• Marketing’s Responses to New Challenges

Course/Text Organization

• Part I - Understanding Marketing • Part II - Analyzing Marketing Opportunities• Part III - Identifying customer value • Part IV - Creating the Market Offering• Part V - Delivering and communicating

Market Offering

Defining Marketing

Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler (p. 7)

Core Concepts of Marketing

Product or Offering

Value and Satisfaction

Needs, Wants, and Demands

Exchange and Transactions

Relationships and Networks

Target Markets & Segmentation

Marketing Channels

Supply Chain

Competition

Marketing Environment

Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

Manufacturermarkets

Services,Services,moneymoney

Governmentmarkets

Services,Services,moneymoney

ServicesServices

Services,Services,moneymoney

TaxesTaxes

Taxes,Taxes,goodsgoods

Taxes,Taxes,goodsgoods

Taxes,Taxes,goodsgoods

MoneyMoney MoneyMoney

Consumermarkets

IntermediarymarketsGoods, servicesGoods, services Goods, servicesGoods, services

ResourcesResources ResourcesResourcesResourcemarkets

MoneyMoney MoneyMoney

Structure of Flows

The Four PsThe Four Ps

MarketingMix

The Four Cs

CustomerSolution

CustomerCost

Communication

Conven-ience

Production Concept

Product Concept

Selling Concept

Marketing Concept

Consumers prefer products that are widely available and inexpensive

Consumers favor products that offer the most quality, performance,

or innovative features

Consumers will buy products only ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

Company Orientations Towards the Marketplace

Market Integratedmarketing

Profits throughcustomer

satisfactionCustomer

needs

(b) The marketing concept

Factory Existingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a) The selling concept

Customer Delivered Value

Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-

ment

Customers Custom

ers

Evolving Views of Marketing’s Role

a. Marketing as anequal function

FinanceProduction

Marketing Humanresources

b. Marketing as a moreimportant function

Finance

Humanresources

Marketing

Production

Evolving Views of Marketing’s Role

c. Marketing as themajor function

Marketing

Finance

Human

resources

Production

d. The customer as thecontrolling factor

Customer

Human

resource

s

FinanceProduction

Marketing

Evolving Views of Marketing’s Role

e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Human

resources Finance

Determinants of Customer Delivered Value

Image value

Personnel value

Services value

Product value

Totalcustomer

value

Monetary cost

Time cost

Energy cost

Psychic cost

Totalcustomer

cost

Customerdelivered

value

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.

Satisfied Customers:

• Are loyal longer• Buy more (new products & upgrades)• Spread favorable word-of-mouth• Are more brand loyal (less price sensitive)• Offer feedback• Reduce transaction costs

Capturing value from customers

• Building customer relationship• Creating customer loyalty and retention

– Customer lifetime value• Growing share of customer

– share of customer• Building customer equity

– customer equity: the total combined customer lifetime values of all of the company’s customers.