Marketing Creating and Capturing Customer Value 1 Marketing Creating and Capturing Customer Value

Chapter Outline What is Marketing? Market management orientation Role of marketing: Satisfy customer needs and wants Build customer relationship

What is Marketing Based on your knowledge and experience, what is the major role of marketing for a company?

Marketing Concept The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Customer Needs, Wants, and Demands Notes to Accompany Slide: Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. These needs were not created by marketers; they are a basic part of the human makeup. Wants are the form human needs take as they are shaped by culture and individual personality. An American needs food but wants a Big Mac, French fries, and a soft drink. Wants are shaped by one’s society and are described in terms of objects that will satisfy needs. When backed by buying power, wants become demands.

Describe a college education in terms of wants, needs, and demands? Discussion Question Describe a college education in terms of wants, needs, and demands? Answer: Students should talk about wanting to feel good about themselves, wanting a good future and wanting to feel knowledgeable and well educated. In addition they may want a certain school over others. The need to fulfill is to generate future income to purchase food and shelter and health care. The demand for education at a certain school is based on what that school offers and the buying power of the potential students.

Market Offerings Customer needs and wants are fulfilled Through market offering: Products Services Marketing Myopia Notes to Accompany Slide: These market offerings can be products and/or services Services include banking, airline, hotel, tax preparation, and home repair services.

Examples of Marketing Myopia We make copying equipment We help improve office productivity Xerox Suggestion Company Definition Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover Identify the problems in the marketing myopia 2. How would you fix it? We make air conditioners and furnaces We provide climate control in the home Carrier

Examples of Marketing Myopia We make copying equipment Xerox Suggestion Company Definition Missouri-Pacific Railroad We run a railroad Identify the problems in the marketing myopia 2. How would you fix it? We make air conditioners and furnaces Carrier

Two Questions for Marketers How can we serve these customers best? What markets will we serve?

Discussion Question Why is it important to a marketer to decide which customers they will serve? Answer: Marketers have limited resources. Some markets are simply more profitable based on size and demand.

Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal marketing concept

Marketing Management Orientations Production concept Product Concept Selling concept Marketing Concept Societal Marketing Concept

Summary of Marketing Orientations Focus is on… Production Production and distribution efficiency Product Most quality product Sales Product sales Market Consumers’ needs and wants Societal In addition to consumers’ needs and wants, also consider benefits to the society

Preparing an Integrated Marketing Plan and Program Price Place Promotion Product

Building Customer Relationships What is Customer Relationship Management Customer value Customer satisfaction Customer relationship levels and tools The key to building lasting customer relationships is to create superior customer value and satifaction. Customer relationship levels: consumer level, B to Be levels (Walmart); tools: loyalty program etc.

Discussion: NASCAR Basic about NASCAR Can you profile NASCAR fans? Kotler’s book: Chapter 1: NASCAR: The National Association for Stock Car Auto Racing. NASCAR now is the second highest rated regular season sport on TV

Who will be NASCAR fans? 75 Million in the U.S 4 of every 10 people in the U.S regularly watch or attend NASCAR Young, Affluent, and Family oriented $700/per person a year on Nascar-related collectibles

Question As for the Marketing aspects of NASCAR, how should they offer what consumers want?

How the Marketing works: Develop strong customer relationship National tours (200,000 people attended the recent Daytona 500, doubling the size of Super Bowl) Tailgate parties, camp and cook out, making sports a family affair TV coverage reaches 20 million viewers weekly 250 big name sponsors Wal-Mart, Home depot to U.S Army

©2011 Pearson Education, Inc. publishing as Prentice Hall Kodak continued to focus on producing traditional film-based cameras long after competitors introduced digital models. Kodak suffered from: Marketing myopia Poor partner relationship management Outside-in perspective Customer driven strategy ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall Kodak continued to focus on manufacturing traditional film-based cameras long after competitors introduced digital models. Kodak suffered from: Marketing myopia Poor partner relationship management Outside-in perspective Customer driven strategy Kodak ignored consumers’ desire for digitized photos that could be printed at home or shared over the Internet. ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall You favor an approach that emphasizes the quality and new features of your product while your assistant prefers to emphasize innovative promotion strategies. Which two marketing concepts are being exhibited? Marketing and selling Production and societal marketing Product and marketing Product and selling ©2011 Pearson Education, Inc. publishing as Prentice Hall

©2011 Pearson Education, Inc. publishing as Prentice Hall You favor an approach that emphasizes the quality and new features of your product while your assistant prefers to emphasize innovative promotion strategies. Which two marketing concepts are being exhibited? Marketing and selling Production and societal marketing Product and marketing Product and selling The product concept emphasizes product quality, performance, and innovative features. The selling concept focuses on creating sales transactions. ©2011 Pearson Education, Inc. publishing as Prentice Hall