1. Chapter One Marketing: Creating and Capturing Customer Value
With Duane Weaver
© 2010

2. OUTLINE Marketing – defined Marketing Mix – defined Market - defined
Marketing Process – discussed
Needs vs. Wants and Buyer Motivation
P for Product – deeper analysis
OOPS – Marketing Myopia
Value
Marketing Concepts
Not for Profit Marketing

3. What is Marketing?
Chapter 1 pages 6 and 7

4. What is Marketing?
“…a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others.”
Armstrong, et. al., p. 7
Chapter 1 pages 6 and 7

5. What is a Market?

6. What is a Market?
The set of actual and potential buyers of a product, service or experience.
Also seen traditionally as a marketplace where the business transaction (or trade) is enacted between buyers and sellers. For example:
A bizarre
Flea market
Farmer’s market
Retail Store
Wholesale Outlet
Online Internet Store
Cell Phone’s digital radio waves
In Marketing when we talk about potential markets we usually are referring to a set of buyers.
These people share a need or want that can be satisfied through exchange relationships.
Chapter 1, Page 10
Chapter 1, page

7. What is successful Marketing?
Attracting new customers by promising and delivering superior value.
Building long-term relationships with customers by delivering continued customer satisfaction.
Creating, building and managing these relationships profitably over time.
Chapter 1 pages 6 and 7

8. Core Marketplace Concepts
3. Value & Satisfaction
Marketer
Customer
Market Offerings
Product
Service
Ideas
Experiences
Customers
Needs
Wants
Demand
4. Exchange, & Relationship
5. Market

9. What is the Marketing Mix?P
Chapter 1 pages 6 and 7

10. The Four Ps (marketing mix)
Product
Price
Place
Promotion

11. The Marketing Process
Understand the marketplace and customer needs and wants.
Design a customer-driven marketing strategy.
Construct a marketing program that delivers superior value.
Build profitable relationships and create customer delight.
Capture value from customers to create profits and customer equity.
Chapter 1 page 7

12. Needs vs. Wants and Buyer Motivation - needs
Needs are states of felt deprivation.
Physical:
Food, clothing, shelter, safety.
Social:
Belonging, affection.
Individual:
Learning, knowledge, self-expression.
Chapter 1 page 8

13. Abraham Maslow’s Hiearchy of Needs
Solomon, Zaichowsky, Polegato, 2008

14. Needs vs. Wants and Buyer Motivation - wants
SO then, …what is a “WANT”?

15. Needs vs. Wants and Buyer Motivation - Motivational Strength
Biological vs. Learned Needs
(innate instinct vs. learned behaviour)
Drive Theory
(achieving homeostasis by satiating tension caused by the arousal of unpleasant states)
Expectancy Theory
pulled by positive incentives (goals) rather than pushed from within

16. Needs vs. Wants and Buyer Motivation - Motivational Direction
MOTIVES tend to be directional
Needs vs. Wants
Need = unsatisfied requirement (hunger)
Want = the way a person satisfies a need which ultimately is dependent on “their historical reality” (cheeseburger vs. trail mix)
Types of Needs
Biogenic or psychogenic
Motivational Conflicts
Fig. 4-1
Solomon, Zaichowsky, Polegato, 2008

17. P for product = Deeper Analysis
Products
Anything that can be offered for:
acquisition,
attention,
use or consumption
That might satisfy a need or want.
Services
Activities or benefits offered.
Essentially intangible.
Do not result in ownership of anything.
Experiences
Create, stage and market brand experiences.
Attending live theatre, music concert.
Ideas
Solutions, consultation, patents, innovations.
Chapter 1, pages 8-10

18. Marketing Myopia
Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.
They focus on the “wants” and lose sight of the “needs.”
The great railroads lost out to the exploding trucking industry.
They forgot that their business was solving transportation problems, not running railroads.
Chapter 1, page 9

19. Value and Satisfaction
If the performance and the customer’s experience is lower than expectations, then customer satisfaction is low.
If the performance and the customer’s experience meets expectations, then the customer is satisfied.
If the performance and the customer’s experience exceeds expectations, then the customer is delighted.
How can we do this?

20. Core Marketplace Concepts
Customers have needs, wants and demands.
Marketers offer products or services.
Customers seek value and satisfaction from offers.
Demands and offers result in transactions and relationships.
Markets are all potential customers with a similar demand.
Chapter 1, page 12

21. Customer-Driven Marketing
Divide markets into segments.
Choose the right segment to target.
Offer a unique value proposition.
Differentiate your offer from competitor offers.
Build customer value and satisfaction.
Nurture long-term customer relationships.
Chapter 1, 13-14

22. Segmentation and Targeting
Segmentation divides the market into groups of customers with varying needs and wants.
Targeting selects the right segment to nurture.
Types of Market Segmentation (see Chp. 2):
Demographic variables
Geographic location
Behavioural variables
Psychographic variables
Chapter 1, page 13-14

23. Demand Management Marketing management seeks to control demand.
Increasing demand is the norm.
Demarketing seeks to reduce demand in certain circumstances.
DEMAND = Wants + $Buying Power
Chapter 1, page 13

24. Value Proposition
The set of benefits or values the company promises to deliver to its target markets to satisfy their needs.
Chapter 1, 13-14

25. Capturing Value In Return
Customer lifetime value
Share of customer
Building Customer Equity
The total combined customer lifetime value of all of the company’s customers
Combination of market share, share of customer and lifetime customer value
Often a more accurate measure of a company’s value than sales or market share
Chapter 1, page 25

26. Marketing Concepts Production – affordability and availability.
Product -- quality and innovation.
Selling -- promotion and hard selling.
Marketing -- customer satisfaction and relationships.
Societal – long-term value to both customer and society.
Chapter 1, pages 14-18

27. Not-For-Profit Marketing
Marketing of ideas, values and institutions.
Increasing awareness that these organizations must build relationships with constituents and stakeholders.
Challenge of using new marketing techniques for not-for-profit initiatives.
Chapter 1, pages 33-34

28. Thanks! Do Happy Customers = Successful Companies?
Expectation Management is Key