First Lecture

CHAPTER ONE
Marketing: Creating and Capturing
Customer Value

Tuesday 14 /2/2017
 Principles of Marketing,
Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed
Tolba
Presentation prepared by Annelie Moukaddem Baalbaki

CHAPTER ONE
Marketing: Creating and Capturing
Customer Value

Lecturer: Souad Alghamdi

Ch 1 -2 Copyright 2011 Pearson Education

 Creating and Capturing Customer Value
Topic Outline

1.1 What Is Marketing?

Define marketing and outline the steps in the marketing
process.
1.2 Understand the Marketplace and Customer Needs.
Explain the importance of understanding customers and the
marketplace and identify the five core marketplace concepts.
1.3 Designing a Customer-Driven Marketing Strategy.
1.4 Preparing an Integrated Marketing Plan and Program.
Identify the key elements of a customer-driven marketing
strategy and discuss the marketing management orientations
that guide marketing strategy.

Ch 1 -3 Copyright 2011 Pearson Education

Creating and Capturing Customer Value

Topic Outline

1.5 Building Customer Relationships.

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

1.6 The Changing Marketing Landscape.

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

Simplest
definition

Marketing is Keep and

Attract new
managing grow current
customers by
profitable customers by
promising
customer delivering
superior value
relationships. satisfaction.
 1.1 What Is Marketing?

Marketing Defined

Marketing is a process by which companies create value for

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

Broadly defined, marketing is a social and managerial

process by which individuals and organizations obtain what
they need and want through creating and exchanging value
with others.

Ch 1 -6 Copyright 2011 Pearson Education

 What Is Marketing?
The Marketing Process

This important figure shows marketing in a nutshell. By creating value

for customers, marketers capture value from customers in return. This
five-step process forms the marketing frame work for the rest of the
chapter and the remainder of the text.

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 Step 1. Understanding the Marketplace and
Customer Needs
Customer Needs, Wants, and Demands (read book pg 6,7)

Ch 1 -8 Copyright 2011 Pearson Education

 Step 2. Understanding the Marketplace and
Customer Needs
Market Offerings: Products, Services and Experiences

Market offerings are some combination of

products, services, information, or experiences
offered to a market to satisfy its needs or wants.

Marketing myopia is focusing only on existing

wants and losing sight of underlying consumer
needs.

Ch 1 -9 Copyright 2011 Pearson Education

 Step 3. Understanding the Marketplace and
Customer Needs
Customer Value and Satisfaction

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 Step 4. Understanding the Marketplace and
Customer Needs
Exchanges and relationships

Exchange is the act of obtaining a desired object from

someone by offering something in return.

Relationships: Marketing actions try to create, maintain,

grow exchange relationships.

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 Step 5. Understanding the Marketplace and
Customer Needs
Each party in the system adds value. Walmart cannot fulfill
its promise of low prices unless its suppliers provide low
costs. Ford cannot deliver a high-quality car-ownership
experience unless its dealers provide outstanding service.
Arrows represent relationships that must be developed and
managed to create customers value and profitable customer
relationships.

Ch 1 -12 Copyright 2011 Pearson Education

 1.3 Designing a Customer-Driven Marketing
Strategy
1. Marketing Management
Marketing management is the art and science of choosing
target markets and building profitable relationships with them.

What customers will we

serve (whats our target Ch2
market)?

How can we serve these

customers best (whats Ch7
our value proposition)?

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 1.3 Designing a Customer-Driven Marketing
Strategy
2. Selecting Customers to Serve

Market segmentation refers to dividing the markets into

segments of customers.

Target marketing refers to which segments to go after.

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 1.3 Designing a Customer-Driven Marketing
Strategy
3. Choosing a Value Proposition

A brands value proposition is the set of benefits or values

a company promises to deliver to customers to satisfy their
needs.

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 1.3 Designing a Customer-Driven Marketing
Strategy
4. Marketing Management Orientations

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 1.3 Designing a Customer-Driven Marketing
Strategy
5. Marketing Management Orientations ( 3 concepts)

- The societal marketing concept holds that marketing

strategy should deliver value to customers in a way that
maintains or improves both the consumers and societys well-
being.

- 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

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 1.3 Designing a Customer-Driven Marketing
Strategy
cont. 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 desired
satisfactions better than competitors do.

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 1.3 Designing a Customer-Driven Marketing
Strategy

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 1.4 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 chosen
customers.

uct Price otion

Prod Prom
Place

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 1.5 Building Customer Relationships

Customer Relationship Management (CRM)

(discuss Etisalat case on pg. 15)

Customer relationship management (CRM): The overall

process of building and maintaining profitable customer
relationships by delivering superior customer value and
satisfaction.

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 1.5 Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction

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 The Changing Nature of Customer Relationships

(discuss Real Marketing on pg. 19) read book pg. 20

Todays companies are building deeper, more direct, and lasting

relationships with more carefully selected customers. selective
relationship.

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 Capturing Value from Customers
Creating Customer Loyalty and Retention

The final step involves capturing value in return in the form

of sales, market share, and profits. By creating superior
customer value, the firm creates highly satisfied customers
who stay loyal and buy more. This, in return, means greater
long-run returns for the firm.

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 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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 Capturing Value from Customers
Building Customer Equity

Customer equity is the total combined customer lifetime

values of all of the companys customers.

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 The Changing Marketing Landscape
This section have five major developments:

Sustainable
Marketing
The Call for
More Social
Responsibilit
y

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The Changing Economic Environment

The Great Recession caused many consumers to rethink

their spending priorities and cut back on their buying.
In adjusting to the new economy, companies and slash
prices in an effort to coax more frugal customers into
opening their wallets.
The challenge is to balance the brands value proposition
with the current times while also enhancing its long-term
equity.
The Digital Age

The digital age has provided marketers with exciting new

ways to learn about and track customers and create
products and services tailored to individual customer needs.
Online marketing is now the fastest-growing form of
marketing.
The Growth of Not-for-profit Marketing

In recent years, marketing has also become a major part of

the strategies of many not-for-profit organizations, such as
colleges, hospitals, museums, zoos, symphony orchestras,
and even churches.
Government agencies have also shown an increased interest
in marketing.
Rapid Globalization

Today, almost every company, large or small, is touched in

some way by global competition.
Managers in countries around the world are increasingly
taking a global, not just local, view of the companys
industry, competitors, and opportunities.
Sustainable Marketing

The Call for More Social Responsibility

As the worldwide consumerism and environmentalism

movements mature, todays marketers are being called on
to develop sustainable marketing practices.
Corporate ethics and social responsibility have become hot
topics for almost every business.
 So, What Is Marketing? Pulling It All Together

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 From book-

Read reviewing objectives and key terms (pg. 30 and 31)

Read all 'Key Terms' (pg. 31)
Video case- Harley Davidson (pg. 33).

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