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Chapter 1- slide 1

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Chapter One
Creating and Capturing Customer
Value
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Chapter 1- slide 5
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Creating and Capturing Customer
Value
Define marketing
Understanding the Marketplace and Customer
Needs
Designing a Customer-Driven Marketing Strategy
The Marketing Process
Building Customer Relationships
Capturing Value from Customers
The Changing Marketing Landscape
Topic Outline
Chapter 1- slide 6
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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
Managers need to:
Attract new customers by promising superior value
Retain old customers by giving them satisfaction
Marketing therefore can be explained as the process
which results in an exchange of value
Chapter 1- slide 7
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Understanding the Marketplace
and Customer Needs
Customer needs, wants, and demands
Market offerings
Customer Value and satisfaction
Exchanges and relationships
Markets

Core Concepts
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8
Basic Marketing Principles
NEED

State of felt
deprivation
WANT

Needs shaped up
by Culture
and Personality
MARKET OFFERING

Anything that satisfies
a need or
a want
(prod/service)

VALUE

Intrinsic Satisfaction
DEMAND

Wants backed up
by buying power
CUSTOMER SATISFACTION
Difference between perceived value & expectations
Chapter 1- slide 9
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NEED WANT DEMAND
[For
product/service]
BRAND
Need for
physical health
Need for social
approval
Need for sense
of security
Class Activity
Copy and fill this table individually then it will be discussed with class.
Chapter 1- slide 10
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1
0
EXCHANGE & TRANSACTIONS

Obtaining a desired object by offering something in return
Transaction is trade b/w two parties that includes two things of value

MARKET
Actual & Potential Buyers of a product
E.g.: Demographic Market i.e. Teens
Product Market i.e. Vegetables Market
Geographic Market etc
MONETARY
Getting something of value in
exchange for money
BARTER
Exchange in Kind
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Chapter 1- slide 12
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Marketing myopia is focusing only on
company products and losing sight of
underlying consumer needs

Understanding the Marketplace
and Customer Needs
Chapter 1- slide 13
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Understanding the Marketplace and
Customer Needs
Customer Value, Satisfaction, Expectations

Customer
Costs
Customer
Benefits
Customer
Perceived
Value
Customer
Satisfaction
Customer
Expectation

Perceived
Performance
Customer
Dissatisfaction
Customer
Expectation
Perceived
Performance

Customer
Delight
Customer
Expectation
Perceived
Performance

Chapter 1- slide 14
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Superior Value Delivery

DealToday.com
Foodpanda.com
Nike Plus
Easy Paisa

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TCS Courier Service
24 hours Delivery
Track the Package through Companys
website
Identification of the person who signed it
All services Free of Cost
Chapter 1- slide 16
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Products and Services

Discussion:
Whats the difference?
Can services be made into products?
Can products be made into services?

Chapter 1- slide 17
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Value, Satisfaction and Quality

Discussion: how would you calculate
consumer value in:
Consuming a can of Coca-Cola?
Joining a health club?
Buying a lottery ticket?
Enjoying a massage at a spa?
Discussion: think of & talk about an
experience where as a consumer, you felt:
Satisfied with the value you received?
Dissatisfied with the value you received?

Chapter 1- slide 18
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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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Designing a Customer-Driven
Marketing Strategy
Market segmentation refers to dividing
the markets into segments of customers
Target marketing refers to which
segments to go after
Selecting Customers to Serve

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Designing a Customer-Driven
Marketing Strategy

Demarketing is marketing to reduce
demand temporarily or permanently; the
aim is not to destroy demand but to
reduce or shift it
Selecting Customers to Serve

Chapter 1- slide 21
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Designing a Customer-Driven
Marketing Strategy
The value proposition is the set of
benefits or values a company promises
to deliver to customers to satisfy their
needs

Choosing a Value Proposition

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Designing a Customer-Driven
Marketing Strategy
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
Marketing
concept
Marketing Management Orientations

Chapter 1- slide 23
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Designing a Customer-Driven
Marketing Strategy

Production concept is the idea that
consumers will favor products that are
available or highly affordable

Marketing Management Orientations

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Designing a Customer-Driven
Marketing Strategy

Product concept is the idea that
consumers will favor products that offer
the most quality, performance, and
features. Organizations should
therefore devote its energy to making
continuous product improvements.
Marketing Management Orientations

Chapter 1- slide 25
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Designing a Customer-Driven
Marketing Strategy
Selling concept is the idea that
consumers will not buy enough of the
firms products unless it undertakes a
large scale selling and promotion effort
Marketing Management Orientations

Chapter 1- slide 26
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Designing a Customer-Driven
Marketing Strategy
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

Marketing Management Orientations

Chapter 1- slide 27
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Designing a Customer-Driven
Marketing Strategy
Societal marketing concept is the idea
that a company should make good
marketing decisions by considering
consumers wants, the companys
requirements, consumers long-term
interests, and societys long-run
interests

Marketing Management Orientations

Chapter 1- slide 28
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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.

Preparing an Integrated Marketing
Plan and Program
Chapter 1- slide 29
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Building Customer Relationships
The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction

Customer Relationship Management
(CRM)


Chapter 1- slide 30
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Building Customer Relationships
Relationship Building Blocks: Customer
Value and Satisfaction

Customer
perceived value
The difference
between total
customer value
and total
customer cost
Customer
satisfaction
The extent to
which a
products
perceived
performance
matches a
buyers
expectations
Chapter 1- slide 31
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Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships
Full
Partnerships
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Building Customer Relationships

Relating with more carefully selected
customers - selective relationship
management to target fewer, more
profitable customers
Relating more deeply and interactively -
more interactive two way relationships
through blogs, Websites, online
communities and social networks
The Changing Nature of Customer
Relationships

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Customer Relationship Groups
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Building Customer Relationships
Partner relationship management
involves working closely with partners in
other company departments and
outside the company to jointly bring
greater value to customers

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Building Customer Relationships
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

Partner Relationship Management

Chapter 1- slide 36
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Building Customer Relationships
Supply chain is a channel that stretches
from raw materials to components to
final products to final buyers
Supply management
Strategic partners
Strategic alliances

Partner Relationship Management

Chapter 1- slide 37
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Capturing Value from Customers
Customer lifetime value is the value of
the entire stream of purchases that the
customer would make over a lifetime of
patronage

Creating Customer Loyalty and
Retention


Chapter 1- slide 38
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Capturing Value from Customers
Share of customer is the portion of the
customers purchasing that a company
gets in its product categories

Share of Wallet
Share of Stomach
Growing Share of Customer

Chapter 1- slide 39
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Capturing Value from Customers
Customer equity is the total combined
customer lifetime values of all of the
companys customers

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Capturing Value from Customers
Building the right relationships with the
right customers involves treating
customers as assets that need to be
managed and maximized
Different types of customers require
different relationship management
strategies
Build the right relationship with the right
customers
Building Customer Equity

Chapter 1- slide 41
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The New Marketing Landscape
Digital age
Rapid
globalization
Ethics and
social
responsibility
Not-for-profit
marketing
Major Developments

Chapter 1- slide 42
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More than half the polled executives at 250
corporations ranked Marketing as the most
important element of strategy - Yankelovitch,
Skelly and White Survey, 1995

The fastest way up the corporate ladder is
through the Marketing Department
- Economist Survey, 1997

Chapter 1- slide 43
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall