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Chapter1Marketing
CreatingandCapturingCustomerValueCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-2Definemarketingandthemarketingprocess.Explaintheimportanceofunderstandingcustomersandidentifythefivecoremarketplaceconcepts.Identifytheelementsofacustomer-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidestrategy.Discusscustomerrelationshipmanagementandidentifystrategiesforcreatingvalueforandcapturingvaluefromcustomers.Describethemajortrendsandforcesthatarechangingthemarketinglandscape.RestStop:
PreviewingtheConceptsCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-3CreatingCustomerValueGoal:Providetheverybestcustomerservice&customerexperience.Customer-centricapproach:Freedelivery,freereturns,365dayreturnpolicy&serviceupgrades.Results:75%ofsalescomefromcurrentcustomers,tremendoussalesgrowthdespitepooreconomy,10millioncustomersservedannually.ZapposCreatesCustomerValue&RelationshipsFirstStopBuildingRelationshipsServiceCulture:Builtaround10coreprinciples;everynewhiretakes4weeksofcustomerloyaltytraining.Commitment:Duringtraining,employeesareoffered$2000toquit;only1%doso.Lifelongrelationshipsarethegoal:EmployeescomparisonshopotherWebsites;socialnetworkingisusedfordirectcontactwithcustomers;customerfeedbackandcriticismisstronglyencouragedandvalued.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-4WhatIsMarketing?Simpledefinition:
Marketingismanagingprofitablecustomerrelationships.Goals:
Attractnewcustomersbypromisingsuperiorvalue.Keepandgrowcurrentcustomer-basebydeliveringsatisfaction.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-5MarketingDefinedMarketingistheprocessbywhichcompaniescreatevalueforcustomersandbuildstrongcustomerrelationshipsinordertocapturevaluefromcustomersinreturn.OLDviewofmarketing:
Makingasale-“tellingandselling”NEWviewofmarketing:
Satisfying
customerneedsCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-6TheMarketingProcessAsimplemodelofthemarketingprocess:Understandthemarketplaceandcustomerneedsandwants.Designacustomer-drivenmarketingstrategy.Constructanintegratedmarketingprogramthatdeliverssuperiorvalue.Buildprofitablerelationshipsandcreatecustomerdelight.Capturevaluefromcustomerstocreateprofitsandcustomerequity.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-7CoreConceptsMarketersmustunderstandfivecorecustomerandmarketplaceconcepts:Needs,wants,anddemandsMarketofferingsValueandsatisfactionExchangesandrelationshipsMarkets
Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-8Needs,Wants,andDemandsNeed:
Stateoffeltdeprivationincludingphysical,social,andindividualneeds.Physical,social,andindividualneedsWants:
Formthatahumanneedtakes,asshapedbycultureandindividualpersonality.Wants+BuyingPower=DemandCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-9MarketingOfferingsNeedsandwantsarefulfilledthroughaMarketingOffer:Somecombinationofproducts,services,information,orexperiencesofferedtoamarkettosatisfyaneedorwant.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-10MarketOfferingsProducts:Persons,places,organizations,information,andideas.Services:Activityorbenefitofferedforsalethatisessentiallyintangibleanddoesnotresultinownership.Brandexperiences:Shouldimmersetheconsumerinthebrandexperienceandmaybeintenselypersonal.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-11MarketingMyopiaMarketingmyopia:Occurswhensellerspaymoreattentiontothespecificproductstheyofferthantothebenefitsandexperiencesproducedbytheproducts.Theyfocusonthe“wants”andlosesightofthe“needs.”Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-12CustomerValueandSatisfactionCaremustbetakenwhensettingexpectationsformarketofferings:Ifperformanceislowerthanexpectations,satisfactionislow.Ifperformanceishigher
thanexpectations,satisfactionishigh.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-13ExchangesandRelationshipsExchange:Actofobtainingadesiredobjectfromsomeonebyofferingsomethinginreturn.Relationships:Marketingactionsbuildandmaintainrelationshipswithtargetaudiencesinvolvinganidea,product,service,orotherobject.Valuebuildsrelationships.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-14WhatIsaMarket?Amarket:Isthesetofactualandpotentialbuyersofaproduct.Thesepeopleshareaneedorwantthatcanbesatisfiedthroughexchangerelationships.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-15ModernMarketingSystemsMainelementsinamodernmarketingsysteminclude:SuppliersCompany(marketer)CompetitorsMarketingintermediariesConsumersMajorenvironmentalforcesaffecteachelement.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-16MarketingManagementTheartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththem.Aimistofind,attract,keep,andgrowcustomersbycreating,delivering,andcommunicatingsuperiorvalue.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-17MarketingManagementDesigningawinningmarketingstrategyrequiresanswerstothefollowingquestions: 1.
Whatcustomerswillweserve?
—Whatisourtargetmarket?2.
Howcanwebestservethese
customers?
—Whatisourvalueproposition?Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-18SelectingCustomerstoServeMarketsegmentation:Dividingthemarketintosegmentsofcustomers.Targetmarketing:Selectingoneormoresegmentstocultivate.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-19ChoosingaValuePropositionThesetofbenefitsorvaluesacompanypromisestodelivertoconsumerstosatisfytheirneeds.Valuepropositionsdictatehowfirmswilldifferentiateandpositiontheirbrandsinthemarketplace.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-20MarketingManagementOrientationsOrganizationsdesignandcarryouttheirmarketingstrategiesunderfivealternateconcepts:ProductionConceptProductConceptSellingConceptMarketingConceptSocietalMarketingConceptCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-21TheMarketingConceptThemarketingconcept:Amarketingmanagementphilosophythatholdsthatachievingorganizationalgoalsdependsonknowingtheneedsandwantsoftargetmarketsanddeliveringthedesiredsatisfactionbetterthancompetitors.
Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-22TheSocietal
MarketingConceptThesocietalmarketingconcept:Theideathatacompany’smarketingdecisionsshouldconsiderconsumers’wants,thecompany’sdesires,consumers’long-runinterests,andsociety’slong-runinterests.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-23TheIntegratedMarketingPlanTransformsthemarketingstrategyintoaction.Includesthemarketingmixand4Psofmarketing:ProductPricePlace(Distribution)PromotionCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-24BuildingCustomerRelationshipsCustomerrelationshipmanagement:Theoverallprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfaction.CRMdealswithallaspectsofacquiring,keeping,andgrowingcustomers.Customervalueandsatisfactionarekey.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-25CustomerPerceivedValueCustomerperceivedvalue:Customer’sevaluationofthedifferencebetweenallofthebenefitsandallofthecostsofamarketingofferrelativetothoseofcompetingoffers.PerceptionsmaybesubjectiveTosomecustomers“value”mightmeanpayingmoretogetmore.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-26CustomerSatisfactionCustomersatisfaction:Extenttowhichtheproduct’sperceivedperformancematchesabuyer’sexpectations.Highlevelsofcustomersatisfactionoftenleadstoconsumerloyalty.SomefirmsseektoDELIGHTcustomersbyexceedingexpectations.Profitabilitymustbeconsidered.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-27CustomerRelationshipsFirmsmaychoosetobuildrelationshipsatdifferentlevels.Loyaltyandretentionprogramsbuildrelationshipsandmayinclude:FrequencymarketingprogramsClubmarketingprogramsCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-28ChangingNatureofRelationshipsCustomerprofitabilityanalysiseliminateslosingcustomersandselectsprofitableoneswithwhomrelationshipsshouldbedeveloped.Firmsrelatedmoredeeplyandinteractivelyviablogs,socialnetworkWebsites,e-mail,andvideosharing.Embracingcustomer-managedrelationshipsrequiresmarketingviaattractionratherthanintrusion.Consumer-generatedmarketinghasbecomeasignificantmarketingforce.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-29PartnerRelationshipMarketingMarketingpartnershelpcreatecustomervalueandassistinbuildingcustomerrelationships.Partnersinsidethefirm:Cross-functionalcustomerteamsPartnersoutsidethefirm:SupplychainmanagementCopyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-30CapturingValueFromCustomersValueiscapturedfromcustomersviacurrentandfuturesales,marketshare,andprofit.Superiorcustomervalueleadstohighlysatisfiedloyalcustomerswhobuymore.Keyoutcomesofcustomervalueincludecustomerloyaltyandretention,shareofmarket,shareofcustomer,andcustomerequity.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-31CustomerEquityThetotalcombinedcustomerlifetimevaluesofallthecompany’scurrentandpotentialcustomers.Manageequityby:Classifyingcustomersbyprojectedloyaltyandpotentialprofitability.Manageeachgroupaccordingly.
Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
1-32CapturingValueFromCustomersCustomerlifetimevalueThevalueoftheentirestreamofpurchasesthatthecustomerwouldmakeoveralifetimeofpatronage.ShareofcustomerTheportionofthecustomer’spurchasingthatacompanygetsintheirproductcategories.Copyright2011,PearsonEducationInc.PublishingasPrentice-Hall
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