CHAPTER 1 MARKETING: CREATING AND CAPTURING CUSTOMER VALUE
The marketing process:
Understand the marketplace and customer wants and needs
Design a customer-driven marketing strategy
Construct marketing program that delivers superior value
Build profitable relationships and create customer delight
Capture value from customers and create profits and customer equity
Understanding the marketplace and customer needs
Five core concepts:
1. Customer needs, wants and demands
Need: States of felt deprivation.
Want: The form human needs takes as shaped by culture and individual
Demands: Human wants that are backed by buying power.
2. Market offerings: products, services, and experiences.
Marketing myopia: The mistake of paying more attention to the specific products
a company offers than to the benefits and experiences produced by these
3. Customer value and satisfaction
4. Exchanges and relationships
Market: The set of all actual and potential buyers of a product or service.
In above diagram, suppliers and consumers are the major environmental forces.
Designing a customer-driven marketing strategy
Marketing management: The art and science of choosing target markets and building profitable
relationships with them.
Must decide on WHAT customers to serve and HOW to best serve them. Value proposition: Set of beliefs or values it promises to deliver to consumers to satisfy their needs.
Five concepts under which marketing plans are carried out:
1. Production concept: Idea that consumers will favor products that are available and highly
affordable and that the organization should therefore focus on improving production and
2. Product concept: Idea that consumers will favor products that offer the most quality,
performance, and features and that the organization should therefore devote its energy
to making continuous improvements.
3. Selling concept: Idea that consumers will not buy enough of the firms products unless it
undertakes a large-scale selling and promotion effort.
4. Marketing concept: The marketing management philosophy that achieving organizational
goals depends on knowing the needs and wants of target markets and delivering the
desired satisfactions better than competitors do.
5. Societal marketing concept: Idea that a companys marketing decisions should consider
consumers wants, the companys requirements, consumers long-run interest, and
societys long-run interests.
Building customer relationships
Customer relationship management (CRM): Overall process of building and maintaining profitable
customer relationships by delivering superior customer value and satisfaction.
Customer-perceived value: The customers evaluation of the difference between all the benefits and
all the costs of a market offering relative to those of competing offers.
Consumer-generated marketing: Marketing messages, ads, and other brand exchanges, created by
consumers themselves, both invited and uninvited.
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 Customer lifetime value: The value of the entire stream of purchases that a customer would make
over a lifetime of patronage.
Share of customer: Portion of the customers purchasing that a company gets in its product
Customer equity: The total combined customer lifetime values of all the companys customers.
The changing marketing landscape
Four major trends and forces that are changing the marketing landscape:
1. The digital age
2. Rapid globalization
3. The call for more ethics and social responsibility
4. The growth of not-for-profit marketing
CHAPTER 2 COMPANY AND MARKETING STRATEGY: PARTNERING TO BUILD
Strategic planning: The process of developing and maintaining a strategic fit between the
organizations goals and capabilities and its changing market opportunities.
Mission statement: A statement of the organizations purpose, what it wants to accomplish in the
Business portfolio: The collection of business and products that make up the company.
Boston Consulting Group (BCG) Growth-share matrix: A portfolio-planning method that evaluates a
companys strategic business units (SBUs) in terms of its market growth rate and relative market
share. Product-market expansion grid:
Market penetration: Increasing sales of current products to current market segments without
changing the product.
Market development: Identifying and developing new market segments for current products.
Product development: Offering modified or new products to current market segments.
Diversification: Starting up or acquiring business outside of the companys current products and
Downsizing: Eliminating products or business units that are not profitable or dont fit strategy.
Planning marketing: partnering to build customer relationships
Value chain: The series of departments tat carry out value-creating activities to design, produce,
market, deliver, and support a firms products.
Value delivery network: The network made up of the company, suppliers, distributors, and ultimately