CHAPTER 1 Creating and Capturing Customer Value with

Learning Outline 1. 2. 3. 4. 5. 6. 7. Marketing 2 What is Marketing?

What is Marketing? Marketing 3 1 -3 Copyright Market Mktg Process © 2015 Pearson

What is Marketing? “…managing profitable customer relationships” Armstrong, et al. , (2015, p. 5)

What is a Market? Marketing 5 1 -5 Copyright Market Mktg Process © 2015

What is a Market? • The set of actual and potential buyers of a

What is successful Marketing? • Attracting new customers by promising and delivering superior value.

Marketing and Marketing Process Marketing 8 Market Mktg Process Copyright © 2015 Pearson Canada

5 Core Concepts 1. Needs, wants, and demands 2. Market offerings 3. Value and

Core Concept 1 • Demand: • Sum of wants and buying power • Wants:

Core Concept 2 • Demand: • Sum of wants and buying power • Wants:

Core Concept 3 • Demand: • Sum of wants and buying power • Needs

Core Concept 4 Exchange Relationships Marketing 13 Market Mktg Process Copyright © 2015 Pearson

Core Concept 5 • Market: • Buyers of a product • Common wants and

Core Concept 5 Mktg Process Copyright © 2015 Pearson Canada Inc. Intermediaries 15 Market

Customer-Driven Marketing Strategy • Winning marketing strategies formed by answering: 1. What customers will

Customer-Driven Marketing Strategy • Value Proposition: • The benefits promised to deliver to consumers

Customer Driven Marketing Strategy: Marketing Management Orientations • Strategies based upon one or more

Customer Driven Marketing Strategy • Integrated marketing plan: • Analyzes firm’s current situation •

Customer Relationship Management • Building and maintaining profitable customer relationships • delivering superior customer

Customer Relationship Management • Customer-Perceived Value: • Customer’s evaluation of the difference between all

Customer Relationship Management • Customer Satisfaction: • Extent to which the product’s perceived performance

Customer Relationship Management ROR – Return on Relationships Customer Lifetime Value The value of

Trends in Marketing Landscape • Uncertain economic environment • Advancing digitized communication • Rapid

Review 1. Define Marketing and a Market 2. Identify the five core marketplace concepts

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CHAPTER 1 Creating and Capturing Customer Value with Duane Weaver

Learning Outline 1. 2. 3. 4. 5. 6. 7. Marketing 2 What is Marketing? What is a market? Outline the steps in the marketing process. Identify the five core marketplace concepts. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 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. Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends 2

What is Marketing? “…managing profitable customer relationships” Armstrong, et al. , (2015, p. 5) “…a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others. ” Armstrong, et al. , (2009, p. 7) Marketing 4 1 -4 Copyright Market Mktg Process © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

What is a Market? • The set of actual and potential buyers of a product, service or experience. • Also seen traditionally as a marketplace where the business transaction (or trade) is enacted between buyers and sellers. For example: • • In Marketing when we talk about potential markets we usually are referring to a set of buyers. • These people share a need or want that can be satisfied through exchange relationships. Marketing 6 A bizarre Flea market Farmer’s market Retail Store Wholesale Outlet Online Internet Store Cell Phone’s digital radio waves 1 -6 Copyright Market Mktg Process © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

What is successful Marketing? • Attracting new customers by promising and delivering superior value. • Building long-term relationships with customers by delivering continued customer satisfaction. • Creating, building and managing these relationships profitably over time. Marketing 7 1 -7 Copyright Market Mktg Process © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

5 Core Concepts 1. Needs, wants, and demands 2. Market offerings 3. Value and satisfaction 4. Exchanges and relationships 5. Markets Marketing 9 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Core Concept 1 • Demand: • Sum of wants and buying power • Wants: • Needs influenced by culture and individual personality • Needs: • Deprived of physical, social, individual basics Marketing 10 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Core Concept 2 • Demand: • Sum of wants and buying power • Wants: Market offerings • Needs influenced by culture and individual personality • Needs: • Deprived of physical, social, individual basics Marketing 11 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Core Concept 3 • Demand: • Sum of wants and buying power • Needs influenced by culture and individual personality • Needs: • Deprived of physical, social, individual basics Marketing 12 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Value & Satisfaction • Wants: Customer Driven Relationship Mgmt. Trends

Core Concept 5 • Market: • Buyers of a product • Common wants and needs satisfied through exchange Marketing 14 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer-Driven Marketing Strategy • Winning marketing strategies formed by answering: 1. What customers will we serve? • target market 2. How can we best serve these customers? • value proposition • This is achieved by: • Market Segmentation: • • Target Marketing: • Marketing 16 Dividing the market into groups of customers Selecting one or more segments to serve Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer-Driven Marketing Strategy • Value Proposition: • The benefits promised to deliver to consumers • Differentiates brands within the marketplace Marketing 17 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Driven Marketing Strategy: Marketing Management Orientations • Strategies based upon one or more orientations: • Production Concept (process efficiencies. . leverage) • Product Concept (design benefits/efficencies) • Selling Concept (market push – pushing it out) • Marketing Concept (market pull – meeting demands) • Societal Marketing Concept (triple bottom line) Marketing 18 Market The societal orientation of marketing is often discussed in the context of the “triple bottom line” – that being financial performance, health and safety for stakeholders, and high environmental standards. More simply put a focus on profit, as well as people and planet. Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Driven Marketing Strategy • Integrated marketing plan: • Analyzes firm’s current situation • Transforms the marketing strategy into action • Describes the four P (marketing • • Marketing 19 mix) strategies: Product Price Place (Distribution) Promotion Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Relationship Management • Building and maintaining profitable customer relationships • delivering superior customer value and satisfaction • Deals with all aspects of acquiring, keeping, and increasing customers Marketing 20 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Relationship Management • Customer-Perceived Value: • Customer’s evaluation of the difference between all benefits and costs of a marketing offer relative to those of the competitors Benefit Price Marketing 21 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Relationship Management • Customer Satisfaction: • Extent to which the product’s perceived performance matches a buyer’s expectations Meet expectations = Loyalty Exceed expectations = Advocacy Marketing 22 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Customer Relationship Management ROR – Return on Relationships 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 their product categories Customer Equity Marketing 23 Market The total combined customer lifetime values of all the company’s current and potential customers Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Trends in Marketing Landscape • Uncertain economic environment • Advancing digitized communication • Rapid globalization • Corporate Social responsibility • Not-for-profit marketing Marketing 24 Market Mktg Process Copyright © 2015 Pearson Canada Inc. 5 Concepts Customer Driven Relationship Mgmt. Trends

Review 1. Define Marketing and a Market 2. Identify the five core marketplace concepts 3. Identify elements of a customer-driven marketing strategy 4. Discuss customer relationship management and identify strategies for creating value for and capturing value from customers 5. Describe the major trends and forces that are changing the marketing landscape 25 Copyright © 2015 Pearson Canada Inc.