Chapter 1
Creating and Capturing Customer Value10/9/2012 6:04:00 PM
What is Marketing?
Most Simplest definition “Marketing is managing profitable customer
o Attract customers promising value
o Deliver satisfaction
Marketing Defined
Satisfying customer needs as opposed to telling and selling
Marketing the activity, set of institutions, processes for creating,
communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large
Understanding the Marketplace and Customer Needs
Customer Need, Wants, and Demands
o Wants the form human needs take as shaped by culture
and individual personality
o Demands human wants that are back by buying power
o Market offerings some combination of products, services,
information, or experiences offered to a market to satisfy a
need or want
o Marketing Myopia focusing on consumer wants and losing
sight of underlying consumer needs
Theodore Levitt
o Brand Experience by orchestrating several services and
products (something beyond just the product)
Customer Value and Satisfaction
o Customers form expectations
Tell others about their satisfaction (buzz marketing)
Or are dissatisfied and switch products
Exchanges and Relationships
o Exchange act of obtaining a desired object from someone
by offering something in return
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o Market set of all actual potential buyers of a product or
Marketing means managing markets to bring about
profitable customer relationships
Designing a Customer-Driven Marketing Strategy
Marketing Management the art of science of choosing target
markets and building profitable relationships with them
o Aim is to find, attract, keep, grow customer target customers
by creating, delivering, communicating superior customer
Selecting Customers to Server
o Based off of market segmentation and target marketing
o Demarketing is reduce demand temporarily to reduce or
shift it
Choosing a Value Proposition
o How the company will differentiate and position itself in the
Marketing Management Orientations
o Production Concept favor a product that is available and
o Product Concept favor the product which is the best
o Selling Concept mass marketing is required for success
o Marketing Concept delivering better satisfactions over
o Societal Marketing Concept what is good for society’s long
run interest
Preparing an Integrated Marking Plan and Program
Using the marketing mix
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Building Customer Relationships
Customer Relationship Management the process of building and
maintaining profitable customer relationships by delivering
customer value and satisfaction
o Customer Perceived Value customer’s evaluation of the
differences between all the benefits and all the costs of a
market offering relative to those of competing offers
o Customer Satisfaction extent to which a customers
perceived value matches the customers expectation
Consumer-generated marketing marketing messages, ads, and other
brand exchanges created by consumers themselves, both invited and
uninvited (Looking for xx post)
Partner Relationship Management - working closely with partners in other
company departments and outside the company to jointly bring greater
value to customers
Capturing Value from Customers
Create not just satisfaction, but delight for customer
o Customer Lifetime Value the value of the entire stream of
purchases that a customer would make over a lifetime
Share of Customer the share a company gets of the
customers lifetime value
Caused by good customer relationships
Offer greater variety to current customers
Building Customer Equity
o Companies not only want to create profitable customers, but
to “own” them for life, earn a greater share of their
purchases, and capture the customer lifetime value
Customer Equity total combined customer lifetime
values of all the company’s customers
Building the right relationships with the right customers
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