Marketing Chapter 1: Creating Customer Value

What is Marketing?

• Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Understanding the Marketplace and Customer Needs

• Needs are states of felt deprivation.
• Wants are the form human needs take as they are shaped by culture and individual personality.
• Demands are human wants that are backed by buying power.
• Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
• Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.
• Exchange is the act of obtaining a desired object from someone by offering something in return.
• A market is a set of actual and potential buyers.
• Consumers market when they search for products, interact with companies to obtain information, and make purchases.

Designing a Customer Value-Driven Marketing Strategy

• Marketing management is the art and science of choosing target markets and building profitable relationships with them.
• Key elements of a customer-driven marketing strategy:
  • What customers will we serve (target market)?
  • How can we best serve these customers (value proposition)?
• A brand's value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs.
• Marketing management orientations:
  • Societal marketing concept: considers consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests.
  • Marketing mix: the four Ps (product, price, promotion, and place).
  • Integrated marketing program: a comprehensive plan that communicates and delivers intended value.

Managing Customer Relationships and Capturing Customer Value

• Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
• Relationship building blocks:
  • Customer-perceived value: the difference between total customer perceived benefits and customer cost.
  • Customer satisfaction: the extent to which perceived performance matches a buyer's expectations.
• Customer-Engagement Marketing: fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community.
• Consumer-Generated Marketing: brand exchanges created by consumers themselves.
• Partner relationship management: involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers.
• 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.
• Customer equity: the total combined customer lifetime values of all of the company's customers.

The Changing Marketing Landscape

• Digital and social media marketing: using digital marketing tools such as websites, social media, mobile ads and apps, online videos, e-mail, and blogs to engage consumers anywhere, at any time, via their digital devices.
• Major trends and forces changing the marketing landscape:
  • Not-for-profit marketing growth
  • Rapid globalization
  • Sustainable marketing