1. CHAPTER ONE Marketing: Creating and Capturing Customer Value
Lecturer: Lulu Saud Altweem
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2. Creating and Capturing Customer Value
Topic Outline
1.1 What Is Marketing? Define marketing and outline the steps in the marketing process. 1.2 Understand the Marketplace and Customer Needs. Explain the importance of understanding customers and the marketplace and identify the five core marketplace concepts. 1.3 Designing a Customer-Driven Marketing Strategy. 1.4 Preparing an Integrated Marketing Plan and Program. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.
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3. Creating and Capturing Customer Value
Topic Outline
1.5 Building Customer Relationships. Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 1.6 The Changing Marketing Landscape. Describe the major trends and forces that are changing the marketing landscape in this age of relationships.

4. Simplest definition What Is Marketing?
Marketing is managing profitable customer relationships.
Attract new customers by promising superior value
Keep and grow current customers by delivering satisfaction.

5. Copyright © 2011 Pearson Education
What Is Marketing?
Marketing Defined
Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return.
Broadly defined, marketing is a social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others.
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6. Copyright © 2011 Pearson Education
What Is Marketing?
The Marketing Process
This important figure shows marketing in a nutshell. By creating value for customers, marketers capture value from customers in return. This five-step process forms the marketing frame work for the rest of the chapter and the remainder of the text.
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7. Understanding the Marketplace and Customer Needs
Customer Needs, Wants, and Demands (read book pg 6,7)
States of deprivation
Physical—food, clothing, warmth, safety
Social—belonging and affection
Individual—knowledge and self-expression
Needs
Form that needs take as they are shaped by culture and individual personality
Wants
Wants backed by buying power
Demands
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8. Understanding the Marketplace and Customer Needs
Market Offerings: Products, Services and Experiences
Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy its needs or wants. Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.
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9. Understanding the Marketplace and Customer Needs
Customer Value and Satisfaction
Customers
Value and satisfaction.
From expectations about the value and satisfaction that various market offerings.
Will deliver and buy accordingly
Marketers
Set the right level of expectations.
Not too high or low.
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10. Understanding the Marketplace and Customer Needs
Exchanges and relationships
Exchange is the act of obtaining a desired object from someone by offering something in return.
Relationships: Marketing actions try to create, maintain, grow exchange relationships.
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11. Understanding the Marketplace and Customer Needs
Each party in the system adds value. Walmart cannot fulfill its promise of low prices unless its suppliers provide low costs. Ford cannot deliver a high-quality car-ownership experience unless its dealers provide outstanding service.
Arrows represent relationships that must be developed and managed to create customers value and profitable customer relationships.
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12. Designing a Customer-Driven Marketing Strategy
Marketing Management
Marketing management is the art and science of choosing target markets and building profitable relationships with them.
What customers will we serve (what’s our target market)?
Ch2
How can we serve these customers best (what’s our value proposition)?
Ch7
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13. Designing a Customer-Driven Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing the markets into segments of customers.
Target marketing refers to which segments to go after.
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14. Designing a Customer-Driven Marketing Strategy
Choosing a Value Proposition
A brand’s value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs.
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15. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
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16. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being.
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
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17. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
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.
Note to Instructor
Customer-driven companies research current customers deeply to learn about their desires, gather new product and service ideas, and test proposed product improvements. Such customer-driven marketing usually works well when a clear need exists and when customers know what they want. In many cases, however, customers don’t know what they want or even what is possible. For example, even 20 years ago, how many consumers would have thought to ask for now-commonplace products
such as cellphones, notebook computers, iPods, digital cameras, 24-hour online buying, and satellite navigation systems? Such situations call for customer-driving marketing—understanding customer needs even better than customers themselves do and creating products and services that meet existing and latent needs, now and in the future.
As an executive at 3M puts it, “Our goal is to lead customers where they want to go before they know where they want to go.”
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18. Designing a Customer-Driven Marketing Strategy
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19. Preparing an Integrated Marketing Plan and Program
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.
Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.
Product
Price
Promotion
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20. Copyright © 2011 Pearson Education
Building Customer Relationships Customer Relationship Management (CRM) (discuss Etisalat case on pg. 15)
Customer relationship management (CRM): The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
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21. Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction
Customer- perceived value
A customer buys from the firm that offers the highest customer-perceived value—the customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers.
Customer satisfaction
depends on the product’s perceived performance relative to a buyer’s expectations. If the product’s performance falls short of expectations, the customer is dissatisfied.
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22. The Changing Nature of Customer Relationships
(discuss Real Marketing on pg. 19) read book pg. 20
Today’s companies are building deeper, more direct, and lasting relationships with more carefully selected customers. selective relationship.
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23. Capturing Value from Customers
Creating Customer Loyalty and Retention
The final step involves capturing value in return in the form of sales, market share, and profits. By creating superior customer value, the firm creates highly satisfied customers who stay loyal and buy more. This, in return, means greater long-run returns for the firm.
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24. Creating Customer Loyalty and Retention
Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.
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25. Capturing Value from Customers
Building Customer Equity
Customer equity is the total combined customer lifetime values for all of the company’s customers.
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26. The Changing Marketing Landscape
This section have five major developments:
Digital age
Rapid globalization
The Changing Marketing Landscape
Not-for-profit marketing
Sustainable Marketing ─ The Call for More Social Responsibility
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27. The Changing Economic Environment
The Great Recession caused many consumers to rethink their spending priorities and cut back on their buying.
In adjusting to the new economy, companies and slash prices in an effort to coax more frugal customers into opening their wallets.
The challenge is to balance the brand’s value proposition with the current times while also enhancing its long-term equity.

28. The Digital Age
The digital age has provided marketers with exciting new ways to learn about and track customers and create products and services tailored to individual customer needs.
Online marketing is now the fastest-growing form of marketing.

29. The Growth of Not-for-profit Marketing
In recent years, marketing has also become a major part of the strategies of many not-for-profit organizations, such as colleges, hospitals, museums, zoos, symphony orchestras, and even churches.
Government agencies have also shown an increased interest in marketing.

30. Rapid Globalization
Today, almost every company, large or small, is touched in some way by global competition.
Managers in countries around the world are increasingly taking a global, not just local, view of the company’s industry, competitors, and opportunities.

31. Sustainable Marketing
The Call for More Social Responsibility
As the worldwide consumerism and environmentalism movements mature, today’s marketers are being called on to develop sustainable marketing practices.
Corporate ethics and social responsibility have become hot topics for almost every business.

32. So, What Is Marketing? Pulling It All Together
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33. Copyright © 2011 Pearson Education
From book-
Read reviewing objectives and key terms (pg. 30 and 31)
Read all 'Key Terms' (pg. 31)
Video case- Harley Davidson (pg. 33).
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