CHAPTER 1 Creating and Capturing Customer Value with Duane Weaver

1. CHAPTER 1Creating and Capturing Customer Valuewith Duane Weaver

2. Learning Outline • What is Marketing? • What is a market? • Outline the steps in the marketing process. • Identify the five core marketplace concepts. • Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. • Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. • Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

3. What is Marketing? Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

4. “…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) What is Marketing? Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

5. What is a Market? Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

6. 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. What is a Market? Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

7. 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. What is successful Marketing? Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

8. Marketing and Marketing Process Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

9. 5 Core Concepts • Needs, wants, and demands • Market offerings • Value and satisfaction • Exchanges and relationships • Markets Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

10. Core Concept 1 • Demand: • Sum of wants and buying power • Needs: • Deprived of physical, social, individual basics • Wants: • Needs influenced by culture and individual personality Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

11. Core Concept 2 • Demand: • Sum of wants and buying power Market offerings • Wants: • Needs influenced by culture and individual personality Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing • Needs: • Deprived of physical, social, individual basics

12. Core Concept 3 • Demand: • Sum of wants and buying power Customer Value & Satisfaction • Wants: • Needs influenced by culture and individual personality Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing • Needs: • Deprived of physical, social, individual basics

13. Core Concept 4 Exchange Relationships Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

14. Core Concept 5 • Market: • Buyers of a product • Common wants and needs satisfied through exchange Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

15. Core Concept 5 Suppliers Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Intermediaries Company Marketing Consumers

16. Customer-Driven Marketing Strategy • Winning marketing strategies formed by answering: • What customers will we serve? • target market • 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 Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

17. Customer-Driven Marketing Strategy • Value Proposition: • The benefits promised to deliver to consumers • Differentiates brands within the marketplace Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

18. 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) Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing 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.

19. 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 Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

20. 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 Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

21. Customer Relationship Management • Customer-Perceived Value: • Customer’s evaluation of the difference between all benefits and costs of a marketing offer relative to those of the competitors Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing Benefit Price

22. Customer Relationship Management • Customer Satisfaction: • Extent to which the product’s perceived performance matches a buyer’s expectations Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Meet expectations = Loyalty Marketing Exceed expectations = Advocacy

23. Customer Relationship Management ROR – Return on Relationships Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

24. Trends in Marketing Landscape • Uncertain economic environment • Advancing digitized communication • Rapid globalization • Corporate Social responsibility • Not-for-profit marketing Customer Driven Market Mktg Process 5 Concepts Relationship Mgmt. Trends Marketing

25. Review • Define Marketing and a Market • Identify the five core marketplace concepts • Identify elements of a customer-driven marketing strategy • Discuss customer relationship management and identify strategies for creating value for and capturing value from customers • Describe the major trends and forces that are changing the marketing landscape