Transcript Chapter 1 slides

Marketing - Creating and
Capturing Customer Value
Chapter 1
Rest Stop: Previewing the Concepts
• Define marketing and outline the steps in the
marketing process
• Explain the importance of understanding
customers and the marketplace and identify
the five core marketplace concepts
• Identify the key elements of a customerdriven marketing strategy
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Rest Stop: Previewing the Concepts
• Discuss customer relationship management
and identify strategies for creating value for
customers and capturing value from
customers in return
• Describe the major trends and forces that are
changing the marketing landscape in this age
of relationships
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First Stop: JetBlue: A Deep Passion for
Creating Customer Value and Relationships
• Goal - Creating first-rate, customer-satisfying
experiences
• Customer-centric - Basic amenities that
exceed customer expectations, more legroom,
free snacks, free Wi-Fi in terminals, and
entertainment systems for every seat
• Results - High customer loyalty scores, high
customer recommendations, record revenues
of $3.8 billion
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What Is Marketing?
• The process by which companies create value
for customers and build strong customer
relationships in order to capture value from
customers in return
• Goals
• Attract new customers by promising superior
value
• Keep and grow current customers by delivering
satisfaction
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Making a
sale—
“telling
and
selling”
NEW view of marketing
OLD view of marketing
Marketing
Satisfying
customer
needs
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Figure 1.1 - A Simple Model of the Marketing
Process
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Understanding the Marketplace
and Customer Needs
• Marketers must understand five core
customer and marketplace concepts:
• Needs, wants, and demands
• Market offerings ( products , services , and
experiences )
• Value and satisfaction
• Exchanges and relationships
• Markets
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Needs
• States of felt deprivation
Wants
• The form human needs take
as they are shaped by culture
and individual personality
Demands
• Human wants that are
backed up by buying power
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Customer Needs, Wants, and
Demands
• Types of needs
• Physical needs
• Food, clothing, warmth, and safety
• Social needs
• Belonging and affection
• Individual needs
• Learning, knowledge, and self-expression
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Market Offerings—
Products, Services,
and Experiences
• Some combination of products,
services, information, or
experiences offered to a
market to satisfy a need or
want
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Market Offerings—Products, Services,
and Experiences
• Not limited to
physical products
• Include entities such
as persons , places ,
organizations,
information, and
ideas
The U.S. Forest Service markets the idea
of reconnecting young people with
exploring the joys of nature firsthand
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Marketing Myopia
• The mistake of paying more
attention to the specific
products a company offers
than to the benefits and
experiences produced by
these products
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Customer Value and Satisfaction
• Customers form expectations about the value
and satisfaction that various market offerings
will deliver
• If marketers set expectations too low, they may
satisfy those who buy but fail to attract enough
buyers
• If marketers set expectations too high, buyers will
be disappointed
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Exchanges and Relationships
• Exchange: The act of obtaining a desired
object from someone by offering something in
return
• Relationships
• Marketing actions build and maintain exchange
relationships with target audiences involving an
idea, product, service, or other object
• Marketers build strong relationships by
consistently delivering superior customer value
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Markets
• The set of all actual and
potential buyers of a
product or service
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Figure 1.2 - A Modern Marketing System
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Designing a Customer-Driven Marketing
Strategy
• Designing a winning marketing strategy
requires answers to the following questions:
• What customers will we serve (what’s our target
market)?
• How can we serve these customers best (what’s
our value proposition)?
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Marketing
Management
• The art and science of
choosing target markets and
building profitable
relationships with them
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Selecting Customers to Serve
• Market segmentation - Dividing the market
into segments of customers
• Target marketing - Selecting one or more
segments to cultivate
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Choosing a Value Proposition
• Value proposition:
The set of benefits or
values a company
promises to deliver
to consumers to
satisfy their needs
The smart car is positioned as
compact, yet comfortable; agile, yet
economical; and safe, yet ecological.
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Marketing Management
Orientations
• Organizations design and carry out their
marketing strategies under five alternate
concepts:
•
•
•
•
•
Production concept
Product concept
Selling concept
Marketing concept
Societal Marketing concept
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The Production Concept
• Consumers will favor products that are
available and highly affordable
• The organization should focus on improving
production and distribution efficiency
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The Product Concept
• Consumers will favor products that offer the
most quality, performance, and features
• The organization should devote its energy to
making continuous product improvements
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The Selling Concept
• Consumers will not buy enough of the firm’s
products unless the firm undertakes a largescale selling and promotion effort
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The Marketing Concept
• Achieving organizational goals depends on
knowing the needs and wants of target
markets and delivering the desired
satisfactions better than competitors do
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Figure 1.3 - The Selling and Marketing
Concepts Contrasted
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The Societal Marketing Concept
• A company’s marketing decisions should
consider consumer’s wants, the company’s
desires, consumers’ long-run interests and
society’s long-run interests
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The Societal Marketing Concept
• Calls for sustainable
marketing—socially
and environmentally
responsible
marketing that meets
the present needs of
consumers while also
preserving the ability
of future generations
to meet their needs
According to UPS, social
responsibility “isn’t just good for
the planet. It’s good for business.”
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Figure 1.4 - The Considerations Underlying
the Societal Marketing Concept
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Preparing an Integrated Marketing
Plan and Program
• Marketing mix tools
•
•
•
•
Product
Price
Place (Distribution)
Promotion
• The firm must blend each marketing mix tool
into a comprehensive integrated marketing
program
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Customer Relationship
Management
• The overall process of building
and maintaining profitable
customer relationships by
delivering superior customer
value and satisfaction
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Customer Perceived
Value
• The 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
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Customer
Satisfaction
• The extent to which the
product’s perceived
performance matches
a buyer’s expectations
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Customer Satisfaction
• For companies
interested in
delighting
customers,
exceptional value
and service become
part of the overall
company culture
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Marketing at Work
• In-N-Out Burger
delights customers
by focusing on
friendly service and
what it does well:
making really good
hamburgers, really
good fries, and really
good shakes
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Customer Relationships
• Firms may choose to
build relationships at
different levels
• Loyalty and retention
programs to build
relationships include
• Frequency marketing
programs
• Club marketing
programs
JetBlue Airways offers its TrueBlue
members frequent-flyer points they
can use on any seat on any JetBlue
flight with no blackout dates
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The Changing Nature of Customer
Relationships
• Customer
profitability analysis
eliminates losing
customers and
selects profitable
ones with whom
relationships should
be developed
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Changing Nature of Relationships
• Firms interact with
customers using new
technologies such as
social networking,
e-mail, Web sites,
blogs, cell phones,
and video sharing
Cold Stone Creamery uses a variety of
social media to engage customers on a
more personal, interactive level
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Customer-Managed
Relationships
• Marketing relationships in which
customers, empowered by digital
technologies, interact with
companies and with each other to
shape their relationships with
brands
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Consumer-Generated Marketing
• Brand exchanges
created by
consumers by which
consumers play an
increasing role in
shaping their own
brand experiences
and those of other
consumers
Harnessing consumer-generated
marketing: H. J. Heinz invited
consumers to submit homemade ads for
its ketchup brand on YouTube
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Partner Relationship Management
• Working closely with others inside and
outside the company to jointly bring more
value to customers
• Partners inside the firm:
• Cross-functional teams
• Partners outside the firm:
• Supply chain and channel partners
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Customer lifetime value
• The value of the entire stream of
purchases that the customer would
make over a lifetime of patronage
Share of customer
• The portion of the customer’s
purchasing that a company gets in
its product categories
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Capturing Value From Customers
• Superior customer
value leads to highly
satisfied loyal
customers who buy
more
Stew Leonard’s customer service policy
emphasizes the importance of bringing
customers back to the stores for repeat
sales
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Customer Equity
• The total combined
customer lifetime
values of all the
company’s current
and potential
customers
To increase customer lifetime value
and customer equity, Cadillac needs
to make the Caddy cool again by
targeting a younger generation of
customers
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Figure 1.5 - Customer Relationship
Groups
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The Changing Marketing Landscape
• Economic
•
•
•
•
uncertainties
Growth in digital
technology
Rapid globalization
Sustainable
marketing
Growth of not-forprofit marketing
In the current economic environment,
companies must emphasize the value
in their value propositions, as Target
did when it shifted the balance more
toward the “Pay Less” half of its
“Expect More. Pay Less” positioning
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Marketing at Work
• The recession from
2008 to 2009
undermined
consumer confidence
• The post-recession
era has seen a shift in
spending patterns,
with consumers
becoming more
frugal
Even as the economy strengthens,
rather than reverting to their old freespending ways, Americans are now
showing an enthusiasm for sensible
consumption not seen in decades
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Figure 1.6 - An Expanded Model of the
Marketing Process
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Rest Stop: Reviewing the Concepts
• Define marketing and outline the steps in the
marketing process
• Explain the importance of understanding
customers and the marketplace and identify
the five core marketplace concepts
• Identify the key elements of a customerdriven marketing strategy
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
1-50
Rest Stop: Reviewing the Concepts
• Discuss customer relationship management
and identify strategies for creating value for
customers and capturing value from
customers in return
• Describe the major trends and forces that are
changing the marketing landscape in this age
of relationships
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
1-51
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 © 2013 Pearson Education, Inc.
Publishing as Prentice Hall
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