1. Chapter 1 Marketing: Creating and Capturing Customer Value

2. 1-2 Prentice Hall, Copyright 2009 Fasten your seat belt! You’re about to begin an exciting journey learning about marketing. Welcome to study marketing

3. 1-3 Prentice Hall, Copyright 2009 What Is Marketing? Simple definition: Marketing is managing profitable customer relationships. Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction.

4. 1-4 Prentice Hall, Copyright 2009 Marketing Defined  Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. OLD view of marketing: Making a sale— “telling and selling” NEW view of marketing: Satisfying customer needs

5. 1-5 Prentice Hall, Copyright 2009 The Marketing Process  A simple model of the marketing process: ► Understand the marketplace and customer needs and wants. ► Design a customer-driven marketing strategy. ► Construct an integrated marketing program that delivers superior value. ► Build profitable relationships and create customer delight. ► Capture value from customers to create profits and customer quality.

6. 1-6 Prentice Hall, Copyright 2009 Needs, Wants, and Demands  Need: State of felt deprivation including physical, social, and individual needs. ► Physical needs: Food, clothing, shelter, safety ► Social needs: Belonging, affection, love ► Individual needs: Learning, knowledge, self-expression

7. 1-7 Prentice Hall, Copyright 2009 Needs, Wants, and Demands  Wants: Form that a human need takes, as shaped by culture and individual personality.  Wants + Buying Power = Demand

8. 1-8 Prentice Hall, Copyright 2009 Need/Want Fulfillment  Needs and wants are fulfilled through a Marketing Offer: ► Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

9. 1-9 Prentice Hall, Copyright 2009 Market Offerings  Products: ► Persons, places, organizations, information, ideas.  Services: ► Activity or benefit offered for sale that is essentially intangible and does not result in ownership.  Brand experiences: ► “... dazzle their senses, touch their hearts, stimulate their minds.”

10. 1-10 Prentice Hall, Copyright 2009 Marketing Myopia  Marketing myopia: ► Occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. ► They focus on the “wants” and lose sight of the “needs.”

11. 1-11 Prentice Hall, Copyright 2009 What Is a Market?  A market: ► Is the set of actual and potential buyers of a product. ► These people share a need or want that can be satisfied through exchange relationships.

12. 1-12 Prentice Hall, Copyright 2009 Modern Marketing Systems  Main elements in a modern marketing system include: ► Suppliers ► Company (marketer) ► Competitors ► Marketing intermediaries ► Final users (consumers)  Major environmental forces effect each element.

13. 1-13 Prentice Hall, Copyright 2009 Marketing Management  The art and science of choosing target markets and building profitable relationships with them. ► Requires that consumers and the marketplace be fully understood. ► Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value.

14. 1-14 Prentice Hall, Copyright 2009 Marketing Management  Designing a winning marketing strategy requires answers to the following questions: 1. What customers will we serve? — What is our target market? 2. How can we best serve these customers? — What is our value proposition?

15. 1-15 Prentice Hall, Copyright 2009 Customer Perceived Value  Customer perceived value: ► Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers. Perceptions may be subjective Consumers often do not objectively judge values and costs.

16. 1-16 Prentice Hall, Copyright 2009 Customer Satisfaction  Customer satisfaction: ► Dependent on the product’s perceived performance relative to a buyer’s expectations. Customer satisfaction often leads to consumer loyalty. Some firms seek to DELIGHT customers by exceeding expectations.

17. 1-17 Prentice Hall, Copyright 2009 Customer Relationships  Loyalty and retention programs build relationships and may feature: ► Financial Benefits E.g., frequency marketing programs ► Social Benefits E.g., club marketing programs ► Structural Ties  Focus is on relating directly to profitable customers, for the long term.

18. 1-18 Prentice Hall, Copyright 2009 Changing Marketing Landscape  The digital age  Rapid globalization  Call for more ethics and social responsibility  Growth of not-for-profit marketing

19. 1-19 Prentice Hall, Copyright 2009 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 © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall