1: Marketing: Creating Customer Value &

Engagement
Marketing Management
Session # 1
 CURRICULUM
1. Marketing: Creating Customer Value and Engagement

2. Analyzing the marketing Environment

3. Consumer Markets and Buyer Behavior

4. Business Markets and Business Buyer Behavior

5. Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

6. Products, Services, and Brands: Building Customer Value

7. Developing New Products and Managing the Product Life Cycle

8. Pricing: Understanding and Capturing Customer Value

9. Pricing Strategies: Additional Considerations

10. Marketing Channels: Delivering Customer Value

11. Communicating Customer Value: Integrated Marketing Communication Strategy

12. Direct, Online, Social Media, and Mobile Marketing

 Topics for the Day
• 1.1 What Is Marketing?

• 1.2 Understanding the Marketplace and Customer Needs

• 1.3 Designing a Customer Value–Driven Marketing Strategy and Plan

• 1.4 Managing Customer Relationships and Capturing Customer Value

• 1.5 The Changing Marketing Landscape

 Learning Objectives
1-1 Define marketing and outline the steps in the marketing process.

1-2 Explain the importance of understanding the marketplace and customers and identify the
five core marketplace concepts.

1-3 Identify the key elements of a customer-driven marketing strategy and discuss the
marketing management orientations that guide marketing strategy.

1-4 Discuss customer relationship management and identify strategies for creating value for
customers and capturing value from customers in return.

1-5 Describe the major trends and forces that are changing the marketing landscape in this
age of relationships.
 1.1 What is Marketing?

Objective 1.1
Define marketing and outline the steps in the marketing process
 Change
Past Present
No Competition Competition

Research
No Research
 Marketing Mix/ Elements of Marketing
• Product
FMCG Consumer Durables Services
• Price
Manufacturer Manufacturer
• Place
• Promotion Distributor

Advertising Wholesaler
Sales Promotion
Public Relation
Retailer Consumer
Direct Marketing
Personal Selling 4 P’s of Marketing
Consumer
Marketing Mix
 Marketing Defined
• Marketing is engaging customers and managing profitable customer
relationships.

• “The aim of marketing is to make selling unnecessary.”

Peter Drucker

• Selling and advertising are only part of a larger marketing mix

• Marketing Mix: A set of marketing tools that work together to engage

customers, satisfy customer needs, and build customer relationships
 Marketing Defined
• Marketing as the process by which companies engage customers,
build strong customer relationships, and create customer value in
order to capture value from customers in return.

• Marketing as 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 to each other.

• What is Value?
• Association between Benefits & Cost
 The Marketing Process

• 5 Step marketing process – for creating & capturing customer value.

• In first 4 Steps: Companies work to understand consumers, create customer value, and build
strong customer relationships.
• In the final step: Companies reap the rewards of creating superior customer value.
• By creating value for consumers, they in turn capture value from consumers in the form of
sales, profits, and long-term customer equity.
1.2 Understanding the Marketplace & Customer
Need

Objective 1.2
Explain the importance of understanding the marketplace and
customers and identify the five core marketplace concepts.
 1.2 Understanding the Marketplace & Customer
Need
• We examine five core customer and marketplace concepts:
(1) Needs, wants, and demands
(2) Market offerings
(3) Value and Satisfaction;
(4) Exchanges and relationships; and
(5) Markets.
 (1) Customer Needs, Wants & Demand
Need
Food
Clothing
Soap

Want
Demand
• Willingness
• Ability
 (2) Market Offerings
• Consumers’ needs and wants are fulfilled through market offerings

• Market offerings are not limited to physical products

• More broadly, market offerings also include other entities, such as

persons, places, organizations, information, and ideas
1. Products
2. Services
3. Experiences
4. Information
 5. Persons

• Authors
• Film & Sports Personality
6. Places
7. Properties
9. Organizations
8. Events
10. Ideas
 (3) Value & Satisfaction
• Customer value and customer satisfaction are key building blocks for
developing and managing customer relationships

• Customers form expectations about the value and satisfaction that

various market offerings will deliver and buy accordingly.
 (4) Exchanges & Transaction
• Exchange is the act of obtaining a desired object from someone by
offering something in return.

• Marketer tries to bring about a response to some market offering.

• Negotiation
 (5) Market
• The concepts of exchange and relationships lead to the concept of a
market.

• A market is the set of actual and potential buyers of a product or

service.

• These buyers share a particular need or want that can be satisfied

through exchange relationships.
 (5) Market
Communication

Collection of Goods & Services Collection of

Sellers Buyers
Monetary Value
Industry Market
Feedback
1.3 Designing a Customer Value Driven Marketing
Strategy & Plan
Objective 1.3
Identify the key elements of a customer-driven marketing strategy
and discuss the marketing management orientations that guide
marketing strategy.

A. Customer Value Driven Marketing Strategy

B. Preparing an Integrated Marketing Program
 A. Customer Value Driven Marketing Strategy

1. Selecting Customers to Serve

2. Choosing Value Proposition
3. Marketing Management Orientation
i. The Production Concept
ii. The Product Concept
iii. The Selling Concept
iv. The Marketing Concept
v. The Societal Marketing Concept
 1. Selecting Customers to Serve
• To design a winning marketing strategy, the Marketing Manager must
answer two important questions:
• What customers will we serve (what’s our target market)? and

• How can we serve these customers best (what’s our value proposition)?
 1. Selecting Customers to Serve
• How many of you like Pepsi?
Segmentation: Group of
consumers with similar needs &
wants
• How many of you like Coke?

• How many of you like Sprite?

• How many of you like Maaza?

 1. Selecting Customers to Serve
• Opposite of Segmentation is Mass Marketing
One Product for the entire market
Example: Bajaj Chetak

Targeting a Market
Example: Honda 2 wheeler Activa Eterno

Dio Unicorn
2. Choosing a Value Proposition
 2. Choosing a Value Proposition
• A brand’s value proposition is the set of benefits or values it promises to
deliver to consumers to satisfy their needs.

• The company must also decide how it will serve targeted customers—
how it will differentiate and position itself in the marketplace…
 3. Marketing Management Orientations
• Marketing management wants to design strategies that will engage target customers
and build profitable relationships with them.

• This is done by adopting Marketing Management orientations.

Societal
Production Product Marketing
Selling concept Marketing
concept concept concept
concept
 i. The Production Concept
• The production concept holds that consumers will favour products that
are available and highly affordable.

Available
Everywhere Mass
Solution to both =
Production
Less Priced
 ii. The Product Stage
• The product concept holds that consumers will favour products that
offer the most in
• Quality
• Performance, and
• Innovative features.

• If lacked in Innovation – leads to a trap known as Marketing Myopia

• Marketing Myopia is the shortsightedness on the part of marketers of

not looking into the future needs of the target audience
ii. The Product Stage
 iii. The Selling Concept
• Selling Concept holds that
• consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort.

• Needs Aggressive & hard-core selling

• Practiced with unsought goods—those that buyers do not normally

think of buying,
• Example: Life insurance, Credit Cards
 iv. The Marketing Concept
• Marketing Concept holds
• that achieving organizational goals depends on knowing the needs and
wants of target markets and delivering the desired satisfactions better
than competitors do.

• Customer focus & value = sales & profits.

• Customer-centered sense-and-respond philosophy.

 iv. The Marketing Concept
• Elements of Marketing Concept:
1. Target Market

2. Customer Needs

3. Integrated Marketing

4. Profits through Customer Satisfaction

Marketing Vs Selling
v. The Societal Marketing Concept
 v. The Societal Marketing Concept
• 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

• Many leading business and marketing thinkers are now preaching the
concept of shared value, which recognizes that societal needs, not just
economic needs
• Example: Tata Memorial Hospital
B. Preparing an Integrated Marketing Plan
1.4 Managing Customer Relationships & Capturing
Customer Value

A. Engaging & Managing Customer Relationships

B. Capturing Value from Customers
 A. Engaging & Managing Customer Relationships
1. Customer Relationship Management
Relationship building blocks: Customer Value & Satisfaction

Customer Relationship Level & Tools

2. Customer Engagement & Today’s Digital & Social Media

3. Consumer Generated Marketing
4. Partner Relationship Marketing
 1. Customer Relationship Management
• CRM is process of:
• Building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.

• It deals with all aspects of

• Acquiring,
• Engaging, &
• Growing customers.
 1. Customer Relationship Management
• Relationship Building Blocks: Customer Value and Satisfaction.
• The key to building lasting customer relationships is to create superior
customer value and satisfaction.

• Satisfied customers are more likely to be loyal customers and give the
company a larger share of their business.
 1. Customer Relationship Management
• Customer Relationship Levels and Tools
• Companies can build customer relationships at many levels, depending
on the nature of the target market.

Customer Relationship
Management

Customer Customer
Acquisition Retention
 1. Customer Relationship Management
• Example: Companies offer frequency marketing programs that reward
customers who buy frequently or in large amounts.
– Airlines offer frequent-flier programs,
– hotels give room upgrades to frequent guests,
– and supermarkets give patronage discounts to “very important
customers.”.
 2. Customer Engagement & Today’s
Digital & Social Media
• Customer-engagement marketing goes beyond just selling a brand to
consumers. Its goal is to make the brand a meaningful part of
consumers’ conversations and lives.

• Example: Companies post their latest ads and videos on social media
sites, hoping they’ll go viral.
 2. Customer Engagement & Today’s
Digital & Social Media
• Maintain an extensive presence on Twitter, YouTube, Facebook,
Instagram, Snapchat, & other social media

• to create brand buzz.

• They launch their own blogs, mobile apps, online microsites, and
consumer-generated review systems
3. Consumer Generated Marketing
 4. Partner Relationship Marketing
• Working closely with others inside and outside the company to jointly
engage and bring more value to customers.
 B. Capturing Value from Customers
1. Creating Customer Loyalty & Retention

2. Growing Share of Customer

3. Building Customer Equity

What is Customer Equity?
Building Right Relationship with Right Customer
 B. Capturing Value from Customers
• Step 1 to 4: Involve engaging customers and building customer
relationships by creating and delivering superior customer value.
• Final step: Capturing value in return in the form of sales, market share,
and profits.
 B. Capturing Value from Customers
1. Creating Customer Loyalty & Retention

2. Growing Share of Customer

3. Building Customer Equity

• Customer equity is the total combined customer lifetime values of all
of the company’s current and potential customers.
 Butterflies
Search for lower price or a B. Capturing Value from Customers
different shopping experience True Friends
Loyalist. Also speak highly
about products & promote
business to others

Strangers
Least potentially profitable
Not loyal.

Barnacles
Loyal customers that rarely
make a purchase, and may
not bring in much of a profit
 B. Capturing Value from Customers
• Butterfly: Someone that supports Microsoft in general, but buys the iPhone since it
happened to be the best available phone on the market.

• Strangers: an individual that occasionally stops into a general store to buy any product,
but otherwise never uses the store.

• True Friends: “Apple Fanboys” that buy whatever product Apple releases simply because
they think so highly of the company.

• Barnacles: A customer that buys one cup of coffee at your coffee shop, and then comes
in every day for the next month to use your free WiFi without making a purchase.
1.5 The Changing Marketing Landscape
 1.5 The Changing Marketing Landscape
• Digital and social media marketing involves using digital marketing
tools such as web sites, social media, mobile ads and apps, online
videos, e-mail, and blogs that engage consumers anywhere, at any
time, via their digital devices.

•Not-for-profit marketing growth

• Rapid globalization
• Sustainable marketing