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

Learn about the principles of marketing, defining marketing, and understanding the marketplace and customers. This quiz covers the steps in the marketing process and the five core marketplace concepts.