Ch. 1 Creating and Capturing Customer Values

Marketing is…
…managing profitable customer relationships
Long definition: the process by which companies create value for customer and build strong customer relationships in order to capture value from customer in return (e.g., sales, profits, market share)
Marketing goal is ….
1. Attract new customers by promising and delivering superior value
2. Keep and grow current customer base by delivering continued customer satisfaction
3.Today there is a focus on building long-term relations with customers
Key Five Marketing Concepts
1) Needs, wants,and demands
2) Market offering
3) Value, satisfaction,and quality
4) Exchange, transactions, and relationships ($$$)
5) Markets
1) Needs and wants
*Needs* occur when a person feels deprived of basic necessities (Maslow’s hierarchy of needs).
-Physical – I’m hungry
-Social – I’m lonely
-Individual – I feel good about myself
*Wants* are needs shaped by culture and individual personality
-Jeans vs. a sari
-Gelato vs. ice cream
-Espresso vs. green tea
[Outstanding companies pay attention to needs and wants!]
2)Market offering -Products, services and experiences
Some combination of products service, information , or experience offered to a market to satisfy a need or want
3) Value satisfactory and quality
*Outperformed*:satisfaction is HIGH If performance is higher than expectations.
*Underperformed*:Satisfaction is LOW if performance is lower than expectations,.
Marketing management
*The art and science of choosing target markets and customers and building profitable relationships with them
–>Ultimate goal is to build strong, long-term relationships
*Different management orientations or philosophies about management
–>Different weights given to products, company, customers, society
Segmentation
Segmentation divides the market into groups of customers with varying needs and wants
Targeting
Targeting selects the right segment to nurture
4 P’s
Product, Price, Promotion, Place
Marketing Mix
Marketing Mix
*Marketing strategies in actions 4Ps=Product,Price, promotion and place
*Developed in order to
-Meet customer’s NEEDS
Eras of marketing
1.Production concept
2.Selling concept
3.Product concept
4.Marketing concept
5.Societal marketing concept
1. Production Concept
Customers like available and affordable products and that the organization should focus on improving production and distribution efficency
–>Mass production
—>Not many options
E.g:”Any customer can have a car painted any colour that he wants so long as it is black” – Henry Ford
2. Selling Concept
Customers resist non-essential or unsought goods and services
-Personal selling and advertising’s job is to convince them to buy
Textbook : the consumers will not buy enough of the firm’s product unless it undertake a large-scale selling and promotion effort.
3. Product concept
Textbook : The idea that consumer will favour products that offers the most quality performance, and feature and that the organization devote its energy to making continuous product improvement.{Makes organization market myopia and too narrow minded}
4. Marketing Concept
-Shift from seller’s to buyer’s needs

-Satisfying customer needs: outside-in

-Customer driven: delivering the desired satisfactions better than competitors do.

5. Societal Marketing Concept
5. Societal Marketing Concept
-Balancing social welfare, consumer wants, and company profit to serve LONG-RUN human welfare
-Tobacco
-Alcohol
-Fast food
-Environment