CHAPTER 1 Creating and Capturing Customer Value with Duane Weaver

CHAPTER 1

Creating and Capturing Customer Value

with Duane Weaver

22 Copyright © 2015 Pearson Canada Inc.

Learning Outline1. What is Marketing?2. What is a market?3. Outline the steps in the marketing process.4. Identify the five core marketplace concepts.5. Identify the key elements of a customer-driven

marketing strategy and discuss the marketing management orientations that guide marketing strategy.

6. Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.

7. Describe the major trends and forces that are changing the marketing landscape in this age of relationships.

Marketing Market Mktg Process 5 Concepts Customer Driven Relationship Mgmt.

Trends

3 Copyright © 2015 Pearson Canada Inc.1-3

What is Marketing?


Trends


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)


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What is a Market?


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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:

•A bizarre•Flea market•Farmer’s market•Retail Store•Wholesale Outlet•Online Internet Store•Cell Phone’s digital radio waves

• 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.


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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.


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Marketing and Marketing Process


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5 Core Concepts

1. Needs, wants, and demands

2. Market offerings

3. Value and satisfaction

4. Exchanges and relationships

5. Markets


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Core Concept 1

• Needs: • Deprived of physical,

social, individual basics

• Wants: • Needs influenced by

culture and individual personality

• Demand:• Sum of wants and

buying power


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Core Concept 2






buying power


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Core Concept 3






buying power


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Core Concept 4


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Core Concept 5

• Market: • Buyers of a product• Common wants and needs satisfied

through exchange


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Core Concept 5


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• 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:

• Dividing the market into groups of customers

•Target Marketing:• Selecting one or more segments to serve

Customer-Driven Marketing Strategy


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Customer-Driven Marketing Strategy

• Value Proposition:• The benefits promised to deliver to consumers• Differentiates brands within the marketplace


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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.

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)


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Customer Driven Marketing Strategy

• Integrated marketing plan:• Analyzes firm’s current situation

• Transforms the marketing strategy into action

• Describes the four P (marketing mix) strategies:

• Product• Price• Place (Distribution)• Promotion


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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


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• Customer-Perceived Value:• Customer’s evaluation of the difference between all benefits and costs of a

marketing offer relative to those of the competitors



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• Customer Satisfaction:• Extent to which the product’s perceived performance matches a

buyer’s expectations


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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 their product categories

Customer Equity The total combined customer lifetime values of all the company’s current and potential customers


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Trends in Marketing Landscape

• Uncertain economic environment• Advancing digitized

communication• Rapid globalization• Corporate Social responsibility• Not-for-profit marketing


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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

Documents

CHAPTER 1 Creating and Capturing Customer Value with Duane Weaver