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Chapter 1- slide 1 Chapter One Marketing: Creating and Capturing Customer Value

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Page 1: Marketing.chap01ppt

Chapter 1- slide 1

Chapter One

Marketing: Creating and Capturing Customer Value

Page 2: Marketing.chap01ppt

Chapter 1- slide 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Creating and Capturing Customer Value

In this topic the following objectives will be accomplished;•What Is Marketing?•Understanding core marketing concepts•Designing a Customer-Driven Marketing Strategy•Building Customer Relationships•The Changing Marketing Landscape

Topic Outline

Page 3: Marketing.chap01ppt

Chapter 1- slide 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

What Is Marketing?• Marketing is defined as set of activities,

and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, and society at large. (By American marketing association)

• 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 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• Marketing is a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing is critical for to the success of every organization, large or small, profit or non-profit, local or international.

Continue-definitions of marketing

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Chapter 1- slide 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Some people may think of marketing only as selling and advertising. They are part of marketing functions, but are not the most important ones.

Today marketing must be understood not in the old sense of making a sale, but in the new sense of satisfying customer needs.

Continue-marketing

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Chapter 1- slide 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Core-marketing concepts

The following are core marketing concepts;•Customer needs, wants, and demands•Market offerings•Value and satisfaction•Exchanges and relationships•Markets

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Chapter 1- slide 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Continue-marketing conceptsCustomer Needs, Wants, and Demands

Business organizations are required to understand the needs, wants and demands of their customers

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Chapter 1- slide 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Continue-marketing concepts• Market offerings are some combination of

products, services, information, or experiences offered to a market to satisfy a need or want.

• Marketing offers are not limited to a physical products, but include services, benefits offered for sale.

• Marketing offers also include other entities such as persons, places, organizations, information, and ideas.

• Smart marketers look beyond the attributes of products, but the meaning of the product. Egg. Nike is more than just shoes, it is what the shoes do for you and where they take you

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Chapter 1- slide 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Value and satisfaction

Customer value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the product. Customers form expectations about the value of various marketing offers and buy accordingly.

Customer satisfaction with a purchase depends on how well the product’s performance lives up to the customer’s expectations. Customer satisfaction is a key influence on future buying behavior

Continue-marketing concepts

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Chapter 1- slide 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Exchange, transactions, and relationships

Marketing occurs when people decide to satisfy needs and wants through exchange

Exchange the act of obtaining a desired object from someone by offering something in return. Eg. Taking product by paying money

Transactions a trade of values between two parties. Marketing consists of activities undertaken to build desirable exchange relationships.

Continue-marketing concepts

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Chapter 1- slide 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Markets: originally the term market stood for the place where sellers and buyers meet to exchange some benefits.

The set of all actual and potential buyers of a product or service.

Marketers work to understand the needs and wants of specific markets and to select the markets that they can serve best.

Continue-marketing concepts

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Chapter 1- slide 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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?

Customer and demand management

The organization has a desired level of demand for its products. at any point in time, there may be no demand, adequate demand or too much demand.

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Chapter 1- slide 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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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Chapter 1- slide 14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

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Chapter 1- slide 15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Designing a Customer-Driven Marketing Strategy

Production concept is the idea that consumers will favor products that are available or highly affordable. This concept works well when the demand exceeds supply. So at that time companies strived to produce more quantities.

Marketing Management Orientations

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Chapter 1- slide 16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Designing a Customer-Driven Marketing Strategy

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

Marketing Management Orientations

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Chapter 1- slide 17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Designing a Customer-Driven Marketing Strategy

Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort. Activities such as advertisement is highly needed to promote sales

Marketing Management Orientations

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Chapter 1- slide 18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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 desired satisfactions better than competitors do

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Chapter 1- slide 19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests

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Chapter 1- slide 20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Building Customer Relationships

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

The purpose of building strong relationship with customers is to return current customers, because loosing a customer means loosing more than one sale.

Customer life time value is the value of the entire stream of purchases that the customer would make over a life time of patronage

Customer Relationship Management (CRM)

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Building Customer RelationshipsRelationship Building Blocks: Customer Value

and SatisfactionTo attract and keep customers, a company must constantly seek

ways to deliver value and satisfaction

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Chapter 1- slide 22Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• Customer loyalty and retention

Highly satisfied customers produce several benefits for the company. satisfied customers are less price sensitive, they talk favorably to others about the company and its products.

A slight drop from complete satisfaction can create an enormous drop in loyalty.

Continue-building relationship with customers

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Chapter 1- slide 23Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Growing “share of customer”

Companies are striving to increase the share they get of the customer’s purchasing in their product categories.•Customer equity is the total combined customer lifetime values of all of the company's customers. Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized.

Continue-building relationship with customers

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Chapter 1- slide 24Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Building Customer RelationshipsCustomer Relationship Levels and Tools

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Building Customer Relationships

• Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers

• Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks

The Changing Nature of Customer Relationships

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Building relationship with customers

• Partner relationship management involves working closely with partners with in company departments and outside the company to jointly bring greater value to customers

• When it comes to creating customer value and building strong customer relationships, today’s marketers must work closely with a variety of marketing partners.

Partner relationship

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Chapter 1- slide 27Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Building relationship with customers

Partners Inside the Company

The old thinking was that marketing is done only by marketing, sales, and customer-support people. Today, rather than letting each department go its own way, firms are linking all departments in the cause of creating customer value. Rather than assigning only sales and marketing people to customers, they are forming cross-functional teams

Partner relationship

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Chapter 1- slide 28Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Building relationship with customers

Marketing Partners Outside the Firm•Most companies today are relying heavily on partnerships with other firms such as suppliers, distributors, retailers, and others who connect the company to its buyers.•Supply chain management involves managing longer channel, stretching from raw materials to components to final products that are carried to final buyers

Partner relationship

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Chapter 1- slide 29Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

The Changing Marketing Landscape

Major Developments

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Chapter 1- slide 30Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2010 Pearson Education, Inc. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall