Chapter 1
Marketing in a Changing World:
Creating Customer Value and
Satisfaction
Road Map: Previewing the
Concepts
Define what marketing is and discuss its core
concepts.
Explain the relationships between customer
value, satisfaction, and quality.
Define marketing management and understand
how marketers manage demand and build
profitable customer relationships.
Compare the five marketing management
philosophies.
Analyze the major challenges facing marketers
heading into the new “connected” millennium.
What Is Marketing?
Simply put: Marketing is the delivery
of customer satisfaction at a profit.
Goals:
1. Attract new customers by promising
superior value.
2. Keep and grow current customers by
delivering satisfaction.
Core
Marketing
Concepts
Marketing Defined
Process by which individuals
and groups obtain what they
need and want through
creating and exchanging
products and value with
others.
What are Consumers’
Needs, Wants and
Demands?
This Is a Need
Needs - state of felt
deprivation
including physical,
social, and
individual needs
(e.g., food)
Types of Needs
Physical:
Food, clothing, shelter, safety
Social:
Belonging, affection
Individual:
Learning, knowledge, self-expression
This Is a Want
Wants - form that
a human need
takes as shaped
by culture and
individual
personality
(e.g., pastry)
This Is Demand
Demand
What are Consumers’ Needs,
Wants, and Demands?
Needs - state of felt deprivation
including physical, social, and
individual needs (e.g., food)
Wants - form that a human
need takes as shaped by
culture and individual
personality (e.g., pastry)
Demands - human wants
backed by buying power (i.e.,
money)
What Will Satisfy Consumers’
Needs and Wants?
Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Experiences
Persons
Organizations
Activities
Services
Places
Ideas
Activity or Benefit Offered for Sale That is Essentially
Intangible and Does Not Result in the Ownership of Anything
How Do Consumers Choose
Among Products and Services?
Value Gained From Owning a Product and
Costs of Obtaining the Product is
Customer Value
Product’s Perceived Performance in Delivering
Value Relative to Buyer’s Expectations is
Customer Satisfaction
Total Quality Management Involves Improving the
Quality of Products, Services, and
Business Processes
How Do Consumers Obtain
Products and Services?
Exchanges
Transactions
Relationships
Building a Marketing
Network by Adding:
•Financial Benefits
•Social Benefits
•Structural Ties
•Profitable Customers
Exchange vs. Transaction
Exchange:
Act of obtaining a desired object from
someone by offering something in return.
Transaction:
A trade of values between two parties.
One party gives X to another party and
gets Y in return. Can include cash, credit,
check, or barter.
How Do Consumers Obtain
Products and Services?
Exchanges
Transactions
Relationships
Building a Marketing
Network by Adding:
•Financial Benefits
•Social Benefits
•Structural Ties
•Profitable Customers
Consider the following thought questions,
formulate an answer, pair with another
student, share your thoughts with one
another on the following items:
When was the last time you were completely
satisfied with something you purchased?
What was it?
Why were you satisfied?
What did a marketer have to do with this?
Modern Marketing System
Marketing Management
Marketing
Management
Demand
Management
Profitable
Customer
Relationships
Involves managing demand,
which involves managing
customer relationships
Finding and increasing
demand, also changing or
reducing demand such as in
Demarketing
Attracting new customers and
retaining and building
relationships with current
customers
Marketing Management Practice
Stage 1. Entrepreneurial Marketing
Stage 2. Formulated Marketing
Stage 3. Intrepreneurial Marketing
Marketing Management Philosophies
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Marketing and Sales Concepts
Contrasted
Societal Marketing Concept
Marketing Challenges in the New
“Connected” Millennium
Technologies for Connecting
Connecting Technologies in
Computers,
Telecommunications,
Information, & Transportation
Provide Help To:
Technologies for Connecting
Learn About &
Track Customers
With Databases
Create Products &
Services Tailored to
Meet Customer Needs
Communicate With
Customers in Groups
Or One-on-One
Distribute Products
More Efficiently &
Effectively
The Internet
The Internet has been hailed as the technology
behind a New Economy.
New applications include:
“click-and-mortar” companies
“click-only” companies
Business-to-business e-commerce
Business-to-business transactions online are
expected to reach $3.6 trillion in 2003.
By 2005, 500,000 companies will use the
Internet to do business.
Connections With Customers
Most marketers are
targeting fewer,
potentially more
profitable customers.
Asking:
What value does the
customer bring to the
organization?
Are they worth pursuing?
Connecting for a
customer’s lifetime.
Direct Connections With
Customers
Many companies use technologies to let them
connect more directly with their customers.
Products available via telephone, mail-order catalogs,
kiosks and e-commerce.
Some firms sell only via direct channels (i.e. Dell
Computer, http://www.amazon.com/), others use a
combination.
Direct marketing is redefining the buyer’s role in
connecting with sellers.
Buyers are active participants in shaping the marketing
offer and process; some buyers design their own
products online such as at http://www.landsend.com/.
Connections With Marketing’s
Partners
Connecting Inside
the Company
Every employee
must be
customer-focused
Teams coordinate
efforts toward
customers
Connecting With
Outside Partners
Supply Chain
Management
Strategic
Alliances
Connections With the World
Around Us
Global
Connections
Broadening
Connections
Value
Connections
Social Responsibility
Connections
Rest Stop: Reviewing the
Concepts
Define what marketing is and discuss its core
concepts.
Explain the relationships between customer value,
satisfaction, and quality.
Define marketing management and examine how
marketers manage demand and build profitable
customer relationships.
Compare the five marketing management
philosophies.
Analyze the major challenges facing marketers
heading into the next millennium.