Chapter One

Creating and Capturing Customer

Value

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Chapter 1- slide 1
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 Creating and Capturing Customer
Value
Topic Outline
• Define marketing and outline the steps in the mar-
keting process
• Understanding the Marketplace and Customer
Needs
• Designing a Customer-Driven Marketing Strategy
• Preparing an Integrated Marketing Plan and Pro-
gram
• Building Customer Relationships
• Capturing Value from Customers
• The Changing Marketing Landscape

Copyright © 2010 Pearson Education, Inc.  

Chapter 1- slide 2
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 What Is Marketing?

Marketing is a process by which companies

create value for customers and build
strong customer relationships to capture
value from customers in
return

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Chapter 1- slide 3
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 Understanding the Marketplace
and Customer Needs
Core Concepts
• Customer needs, wants, and demands
• Market offerings
• Customer Value and satisfaction
• Exchanges and relationships
• Markets

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Chapter 1- slide 4
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 Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands

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Chapter 1- slide 5
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 Understanding the Marketplace
and Customer Needs
• Market offerings are some combina-
tion of products, services, information,
or experiences offered to a market to
satisfy a need or want
• Marketing myopia is focusing only on
existing wants and losing sight of under-
lying consumer needs

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Chapter 1- slide 6
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 Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations

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Chapter 1- slide 7
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 Understanding the Marketplace
and Customer Needs
• Marketing occurs when people decide
to satisfy their needs and wants through
exchange relationships.
• Exchange is the act of obtaining a de-
sired object from someone by offering
something in return.
• Marketing consists of actions taken to
create, maintain, and grow desirable
exchange
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Inc.   with target audi-
Chapter 1- slide 8
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 Understanding the Marketplace
and Customer Needs

Markets are the set of actual and poten-

tial buyers of a product or service

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Chapter 1- slide 9
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 Designing a Customer-Driven
Marketing Strategy

Marketing management is the art and

science of choosing target markets and
building profitable relationships with
them
– What customers will we serve?
– How can we best serve these customers?

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Chapter 1- slide 10
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 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 seg-
ments to go after

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Chapter 1- slide 11
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 Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Demarketing is marketing to reduce de-

mand temporarily or permanently; the
aim is not to destroy demand but to re-
duce or shift it

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Chapter 1- slide 12
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 Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

• The value proposition is the set of

benefits or values a company promises
to deliver to customers to satisfy their
needs

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Chapter 1- slide 13
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

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Chapter 1- slide 14
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production concept is the idea that con-

sumers will favor products that are
available or highly affordable

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Chapter 1- slide 15
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Product concept is the idea that con-
sumers will favor products that offer the
most quality, performance, and features.
Organizations should therefore devote
its energy to making continuous product
improvements.

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Chapter 1- slide 16
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept is the idea that con-

sumers will not buy enough of the firm’s
products unless it undertakes a large
scale selling and promotion effort

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Chapter 1- slide 17
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 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 de-
sired satisfactions better than competi-
tors do

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Chapter 1- slide 18
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 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing concept is the idea

that a company should make good mar-
keting decisions by considering con-
sumers’ wants, the company’s require-
ments, consumers’ long-term interests,
and society’s long-run interests

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Chapter 1- slide 19
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 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 cho-
sen customers.
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Chapter 1- slide 20
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 Building Customer Relationships
Customer Relationship Management (CRM)

• The overall process of building and

maintaining profitable customer rela-
tionships by delivering superior cus-
tomer value and satisfaction

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Chapter 1- slide 21
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 Building Customer Relationships
Relationship Building Blocks: Customer Value
and Satisfaction

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Chapter 1- slide 22
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 Building Customer Relationships
Customer Relationship Levels and Tools

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Chapter 1- slide 23
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 Building Customer Relationships
The Changing Nature of Customer Relation-
ships
• Relating with more carefully selected cus-
tomers uses selective relationship man-
agement to target fewer, more profitable
customers
• Relating more deeply and interactively by
incorporating more interactive two way re-
lationships through blogs, Websites, online
communities and social networks
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Chapter 1- slide 24
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 Building Customer Relationships

Partner relationship management in-

volves working closely with partners in
other company departments and out-
side the company to jointly bring greater
value to customers

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Chapter 1- slide 25
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 Building Customer Relationships
Partner Relationship Management
• Partners inside the company is every
function area interacting with customers
– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
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Chapter 1- slide 26
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 Building Customer Relationships
Partner Relationship Management

• Supply chain is a channel that stretches

from raw materials to components to fi-
nal products to final buyers
• Supply management
• Strategic partners
• Strategic alliances

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Chapter 1- slide 27
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 Capturing Value from Customers
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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Chapter 1- slide 28
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 Capturing Value from Customers
Growing Share of Customer

Share of customer is the portion of the

customer’s purchasing that a company
gets in its product categories

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Chapter 1- slide 29
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 Capturing Value from Customers

Customer equity is the total combined

customer lifetime values of all of the
company’s customers

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Chapter 1- slide 30
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 Capturing Value from Customers
Building Customer Equity
• Building the right relationships with the
right customers involves treating cus-
tomers as assets that need to be man-
aged and maximized
• Different types of customers require dif-
ferent relationship management strate-
gies
– Build the right relationship with the right
customers

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Chapter 1- slide 31
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 The New Marketing Landscape

Major Developments

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Chapter 1- slide 32
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