Chapter 1: Marketing: Creating and Capturing Customer Value
Marketing is managing profitable customer relationships.
o The two goals of marketing are to:
Attract new customers by promising superior value.
Keep and grow current customers by delivering satisfaction.
Marketing: the process by which companies create value for customers and
build strong customer relationships in order to capture value from
customers in return.
Marketing mix: a set of marketing tools that work together to satisfy
customer needs and build customer relationships.
The steps in the marketing process are:
Understand Design a Construct a Build Capture value
marketplace customer- marketing relationships customers to
and customer driven program that and create create profits
needsand marketing delivers customer and customer
wants strategy superior value delight equity
Five core customer and marketplace concepts:
o Needs, wants, and demands
Needs: states of felt deprivation.
o I.e. needs for food, clothing, warmth, and safety.
o I.e. needs for belonging and affection.
o I.e. needs for knowledge and self-expression.
Wants: the form human needs take as they are shaped by
culture and individual personality.
I.e. we need food but we want pizza.
Demands: human wants that are backed by buying power.
o Market offerings (products, services, and experiences)
Market offerings: some combination of products services,
information, or experiences offered to a market to satisfy a
need or want.
Can also include other entities such as, persons, places,
organizations, information, and ideas.
Services: activities or benefits offered for sale that are
essentially intangible and do not result in the ownership of
Marketing myopia: the mistake of paying more attention to the
specific product a company offers than to the benefits and
experiences produced by these products. I.e. a drill bit manufacturer may think that the customer
needs a ¼ inch drill bit when they really need a ¼ inch
Brand experiences for customers are made when marketers
orchestrate several services and products.
o Value and satisfaction
By giving the customer the maximum value possible, they will
satisfy customers and those customers will buy again and refer
the products to others.
Opposite if little, to no value is given.
o Exchanges and relationships
Exchange: the act of obtaining a desired object from someone
by offering something in return.
Doesn’t have to be products.
Marketing consists of actions taken to build and maintain
desirable exchange relationships with target audiences
involving a product, service, idea, or other object.
Market: the set of all actual and potential buyers of a product
A modern marketing system looks like:
Suppliers Marketing Consumers
Marketing management: the art and science of choosing target markets and
building profitable relationships with them.
Marketing managers must answer two important questions:
o What customers will we serve (what’s our target market)?
o How can we serve these customers best (what’s our value
Steps in selecting customers to serve:
o Divide the market into segments of customers (market segmentation).
o Select which segments it will go after (target marketing).
It will be those segments it can serve well and profitably.
A company must decide how it will differentiate and position itself in the
o Value proposition: a brand’s set of benefits or values it promises to
deliver to consumers to satisfy their needs.
I.e. Rogers “Canada’s most reliable network.” Five alternative concepts under which organizations design and carry out
their marketing strategies:
o The Production Concept
The idea that consumers will favour products that are available
and highly affordable and that the organization should
therefore focus on improving production and distribution
Too much focus on operations can lead to marketing
o The Product Concept
The idea that consumers will favour products that offer the
most in quality, performance, and innovative features and that
the organization should therefore devote its energy to making
continuous product improvements.
Without making new and better products, marketing
myopia may also occur (i.e. mouse trap example).
o The Selling Concept
The idea that consumers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and
The aim is to sell what the company makes rather than
making what the market wants.
o The Marketing Concept
A philosophy that holds that achieving organizational goals
depends on knowing the needs and wants of target markets
and delivering the desired satisfactions better than
Customer-driven companies research current customers
deeply to learn about their desires, gather new product and
service ideas, and test proposed product improvements.