Chapter 1
Marketing:
Creating and Capturing Customer Value
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What Is Marketing?
Marketing is the activity, set of
institutions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society at
large. (American Marketing Association,
October 2007)
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The Marketing Process
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Customer Needs, Wants, and
Demands
Needs
• States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Wants
• Form that needs take as they are shaped by culture
and individual personality
Demands
• Wants backed by buying power
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The Marketing Process
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Marketing Myopia
The mistake of paying more attention to
the specific products a company offers than
to the benefits and experiences produced
by these products.
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Marketing Management
Orientations
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept
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Marketing Management
Orientations
Production concept is the idea that consumers will
favor products that are available or highly
affordable, e.g., Henry Ford & Assembly line.
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Marketing Management
Orientations
Product concept is the
idea that consumers
will favor products
that offer the most
quality, performance,
and features.
Organization should
therefore devote its
energy to making
continuous product
improvements.
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Marketing Management
Orientations
Selling concept is the idea that consumers
will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort, e.g., sales force of
insurance companies.
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Marketing Management
Orientations
Marketing concept is the idea that achieving
organizational goals depends on knowing
the needs and wants of the target markets
and delivering the desired satisfactions
better than competitors do.
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Societal Marketing
Societal marketing concept is the idea that
a company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’
long-term interests, and society’s long-run
interests.
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Apple-Foxconn relationship
probed by 'Sunday Morning'
http://www.cbsnews.com/8301-3445_16257367950/the-dark-side-of-shiny-appleproducts/
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The Marketing Process
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Preparing an Integrated Marketing
Plan and Program
The marketing mix: set of tools (four Ps) the
firm uses to implement its marketing
strategy. It includes product, price,
promotion, and place.
Integrated marketing program:
comprehensive plan that communicates
and delivers the intended value to chosen
customers.
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The Marketing Process
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Capturing Value from Customers
• Right relationships with the right customers
involves treating customers as assets that
need to be managed and maximized.
• Different types of customers require
different relationship management
strategies, e.g., Customer Relationship
Management (CRM, the overall process of
building and maintaining profitable
customer relationships by delivering
superior customer value and satisfaction).
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Customer Lifetime Value &
Customer Equity
• Customer Lifetime Value is the value of the
entire stream of purchases that the
customer would make over a lifetime of
patronage. (Why does Standard Chartered
have a branch at Ajou university?)
• Customer Equity is the total combined
customer lifetime values of all of the
company’s customers
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For the Next Class
• Introduce yourself (“Market yourself”)
• Describe yourself and let your classmates
know how attractive a person you are
• Totally voluntary
• Maximum 3 minutes per person
• Can use multimedia or anything
• A good introduction should help receive a
good final grade.
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