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1-1
 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
value- driven marketing strategy and discuss
the marketing management orientations that
guide marketing strategy.

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 Learning Objectives
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.

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 Learning Objective 1-1

• Define marketing and outline the steps in the

marketing process.

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 What Is Marketing?
• Marketing is engaging customers and
managing profitable customer relationships.

• Goals of Marketing
• Attract new customers by promising superior
value
• Keep and grow current customers by delivering
satisfaction

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 What is Marketing?

A simple definition of marketing is managing

profitable customer relationships.

Marketing is a process by which companies

create value for customers and build strong
customer relationships to capture value
from customers in return
 What is Marketing?
Marketing must focus on satisfying customer needs.
 Forms of Marketing

Traditional Contemporary
• Making a sale • Satisfying customer
• Abundance of products needs
in the nearby shopping • Imaginative Web sites
centers and mobile phone apps,
• Television, magazine, blogs, online videos,
and direct-mail ads and social media
• Reach customers
directly, personally, and
interactively

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 Figure 1.1 - The Marketing Process:
Creating and Capturing Customer Value

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 Learning Objective 1-1 Summary
• Marketing creates value for customers
• understand marketplace and customers
• design a customer value-driven marketing
strategy
• construct a marketing program
• engage customers, build relationships

• Captures value from customers

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 Learning Objective 1-2

• Explain the importance of understanding the

marketplace and customers and identify the
five core marketplace concepts.

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 Understanding the Marketplace
and Customer Needs
• Five core customer and marketplace concepts:
• Needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets

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 Customer Needs, Wants,
and Demands
Needs
• States of felt deprivation
• Physical needs - Food, clothing, warmth, and safety
• Social needs - Belonging and affection
• Individual needs - Knowledge and self-expression

Wants
• Form taken by human needs when shaped by culture and
individual personality

Demands
• Human wants that are backed by buying power

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 Customer Needs, Wants,
and Demands

Staying close
to customers:
Target’s
energetic
new CEO

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 Market Offerings
• Products, services, information or experiences
• Offered to satisfy a need or want

• Marketing myopia - paying more attention to

the specific products than to the benefits and
experiences produced

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 Customer Value and Satisfaction
• Customers form expectations about the value
and satisfaction of market offerings.
• Satisfied customers buy again
• Dissatisfied customers switch to competitors

• Setting the right level of expectations

• Low expectations may fail to attract buyers
• High expectations may disappoint buyers

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 Exchanges and Relationships
• Exchange is the act of obtaining a desired
object by offering something in return.

• Marketing consists of creating, maintaining,

and growing desirable exchange relationships.
• Strong relationships are built by consistently
delivering superior customer value.

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 Markets

• All actual and potential buyers of a product

• Sellers and Consumers market

• Customer-managed relationships

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Figure 1.2 - A Modern Marketing System

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 Learning Objective 1-3

• Identify the key elements of a customer value-

driven marketing strategy and discuss the
marketing management orientations that
guide marketing strategy.

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 Designing a Customer Value-Driven
Marketing Strategy
• Marketing management: Choosing target
markets and building profitable relationships

• Designing a winning marketing strategy

• Target market?
• Value proposition?

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 Designing a Customer Value-Driven
Marketing Strategy
• Market segmentation refers to dividing the
markets into segments of customers.

• Target marketing refers to which segments to

go after.

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Designing a Customer Value-Driven
Marketing Strategy
Choosing a value
proposition - the
company must
decide how it
will differentiate
and position
itself in the
marketplace.

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 Marketing Mix
• Four Ps of Marketing
• Product
• Price
• Place
• Promotion

• Marketing mix tools should be blended into a

comprehensive integrated marketing
program.

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 Learning Objective 1-3 Summary

• Market segmentation
• Target marketing
• Differentiation and positioning
• Production and product concepts
• Selling and marketing concepts
• Societal marketing concept

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 Learning Objective 1-4

• Discuss customer relationship management

and identify strategies for creating value
for customers and capturing value from
customers in return.

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Customer Relationship Management
• Delivering superior customer value and
satisfaction to build and maintain profitable
customer relationships
• Customer-perceived value: Customer’s evaluation
of a marketing offer relative to those of competing
offers
• Customer satisfaction: Extent to which a product’s
perceived performance matches a buyer’s
expectations

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 Customer Relationship Levels
and Tools
Levels Tools
• Basic relationships • Frequency
• Low-margin marketing programs
customers • Loyalty rewards
• Full partnerships programs
• High-margin • Club marketing
customers programs

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 Customer Relationship Levels
and Tools

Walgreens:
Relationship
Marketing
Tools

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 Customer-Engagement Marketing
• Customer-engagement marketing makes the
brand a meaningful part of consumers’
conversations and lives.
• Greater consumer empowerment means that
companies must practice marketing by
attraction.
• Marketers must find ways to enter consumers’
conversations with engaging and relevant
brand messages.

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 Consumer-Generated Marketing
• Brand exchanges created by consumers
• Consumers play an increasing role in shaping their
own brand experiences and those of other
consumers.
• Uninvited and Invited
• Consumer-to-consumer exchanges
• Consumers invited by companies
• New product and service ideas
• Active role in shaping ads

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Partner Relationship Management
• Working closely with partners both inside and
outside the company to jointly bring more
value to customers
• Partners inside the firm—cross-functional teams
• Partners outside the firm—suppliers, channel
partners

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 Creating Customer Loyalty
and Retention
• Keeping customers loyal makes good
economic sense.
• Customer lifetime value is the value of the
entire stream of purchases a customer makes
over a lifetime of patronage.
• Customer defections can be costly
• Can lose that customer’s lifetime value
• May cause other customers to defect

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 Share of Customer
• Portion of the customer’s purchasing in their
product categories

• Share of Customer is increased by:

• Good customer relationship management
• Offering greater variety to current customers
• Creating programs to cross-sell and up-sell to
existing customers

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 Customer Equity
• Total combined customer lifetime values of all
of the company’s customers
• Measures the future value of the company’s
customer base
• Increases when the loyalty of the firm’s
profitable customers increases
• Better measure of a firm’s performance than
current sales or market share

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Figure 1.5 - Customer
Relationship Groups

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 Learning Objective 1-4 Summary
• Customer relationship management
• Customer-engagement marketing
• Customer equity
• Customer value and satisfaction
• Creating value for customers and capturing
value from customers in return.

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 Learning Objective 1-5

• Describe the major trends and forces that are

changing the marketing landscape in this age
of relationships.

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 The Changing Marketing Landscape
• Digital Age
• Changing Economic Environment
• Growth of Not-for-Profit Marketing
• Rapid Globalization
• Sustainable Marketing

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 The Digital Age: Online, Mobile, and
Social Media Marketing
• Digital and social media marketing: Engaging
consumers via their digital devices using
digital marketing tools
• Mobile marketing: Using mobile channels to
stimulate immediate buying, make shopping
easier, and enrich the brand experience
• Blending the new digital approaches with
traditional marketing creates a smoothly
integrated marketing strategy and mix.

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 Changing Economic Environment
• The Great Recession undermined consumer
confidence.

• Post-recession era
• Consumers have become more frugal.
• New consumer spending values emphasize
simpler living.
• Marketers are focusing on value, practicality and
durability in their product offerings.

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Growth of Not-for-Profit Marketing

Sound marketing
can help not-for-
profits attract
membership,
funds, and
support.

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 Rapid Globalization and
Sustainable Marketing
• Managers around the world are taking both
local and global views of the company’s:
• Industry
• Competitors
• Opportunities
• Corporate ethics and social responsibility have
become important for every business.

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 Learning Objective 1-5 Summary

• Online, mobile and social media marketing

• Post-recession economy
• Not-for-profit marketing
• Connecting globally
• Ethical and societal responsibilities

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Figure 1.6 - An Expanded Model of
the Marketing Process

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 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
value-driven marketing strategy and discuss
the marketing management orientations that
guide marketing strategy.

Copyright © 2017 Pearson Education, Ltd. 1-51

 Learning Objectives
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.

Copyright © 2017 Pearson Education, Ltd. 1-52