1- 1 Chapter 1 Marketing: Creating and Capturing Customer Value.

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Chapter 1Marketing:

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

• States of deprivation• Physical—food, clothing, warmth, safety• Social—belonging and affection• Individual—knowledge and self-expression

Needs

• Form that needs take as they are shaped by culture and individual personalityWants

• Wants backed by buying powerDemands

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The Marketing Process

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The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.

Marketing Myopia

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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_162-57367950/the-dark-side-of-shiny-apple-products/

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The Marketing Process

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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.

Preparing an Integrated Marketing Plan and Program

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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.