Marketing: Creating and

Capturing Customer Value

REYNOLD D. TAN, PhD.

1
 is a process by which companies create
value for customers and build strong
customer relationships in order to capture
value from customers in return.

1-2
What Is Marketing?
The Marketing Process

Copyright 2016 Pearson Education, Inc. 1-3

Understanding the Marketplace and
Customer Needs
Customer Needs, Wants, and Demands

Needs States of deprivation

Wants Form that needs take

Wants backed by buying

Demands power
1-4
Understanding the Marketplace and
Customer Needs
Market Offerings Products, Services, and
Experiences
Market offerings
are some
combination of
products, services,
information, or
experiences offered
to a market to
satisfy a need or
want.

Marketing myopia
is focusing only on
existing wants and
losing sight of 1-5
Understanding the Marketplace and
Customer Needs
Customer Value and Satisfaction

Customers
Value and
satisfaction

Marketers
Set the right
level of
expectations
1-
13
 Understanding the Marketplace and
Customer Needs
Exchanges and
Relationships

Exchange is the act of obtaining a desired object

from someone by offering something in return.

Marketing actions try to create, maintain, and

grow desirable exchange relationships.
- the concept of customer lifetime value

1-7
Understanding the Marketplace and
Customer Needs
Markets

1-8
Designing a Customer Value-Driven Marketing
Strategy
Selecting Customers to
Serve

Marketing management is the art and science of

choosing target markets and building profitable
relationships with them.

What customers will we serve?

How can we best serve these customers?

Copyright 2016 Pearson Education, Inc. 1-18

Designing a Customer Value-Driven Marketing
Strategy
Selecting Customers to
Serve

Market segmentation refers to dividing the markets

into segments of customers.

Target marketing refers to which segments to go

after.

1-19
 Designing a Customer Value-Driven
Marketing Strategy
Choosing a Value Proposition

A brands value
proposition is the
set of benefits or
values it promises
to deliver to
customers to satisfy
their needs.
Twitter, Inc.

1-11
 EXAMPLE:

1- THE TARGET MARKET

2- WHAT UNIQUE VALUE DO YOU PROVIDE?
3- Why should they believe you.
 Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Societal
Producti Marketi
Product Selling Marketi
on ng
concept concept ng
concept concept
concept

1-13
 Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Production concept:
Consumers will favor products that are available and
highly affordable.

Copyright 2016 Pearson

Education, Inc. 1-14
 Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Product concept:
Consumers favor products that offer the most
quality, performance, and features.

The focus is on continuous product improvements.

1-15
 Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept:
Consumers will not buy enough of the firms
products unless the firm undertakes a large-scale
selling and promotion effort.

1-16
Designing a Customer Value-Driven Marketing
Strategy
Marketing Management Orientations

Marketing concept:
Know the needs and wants of the target markets
and deliver the desired satisfactions better than
competitors.

1-17
 Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing:
The companys marketing decisions should consider
consumers wants, the companys requirements,
consumers long-run interests, and societys long-
run interests.

1-18
Designing a Customer Value-Driven
Marketing Strategy
Marketing Management Orientations

1-19
Designing a Customer Value-Driven Marketing
Strategy
Marketing Management
Orientations

Copyright 2016 Pearson Education, Inc. 1-20

 Preparing an Integrated Marketing Plan and
Program

The marketing mix is the set of tools (four Ps) the

firm uses to implement its marketing strategy. This
set includes product, price, promotion, and place.

An integrated marketing program is a

comprehensive plan that communicates and
delivers the intended value to chosen
customers.

Copyright 2016 Pearson Education, Inc. 1-21

 Building Customer Relationships
Customer Relationship Management

Customer relationship management is the overall

process of building and maintaining profitable
customer relationships by delivering superior
customer value and satisfaction.

1-22
Building Customer Relationships
Customer Relationship Management

Relationship Building Blocks

Customer- Customer
perceived value satisfaction

The difference The extent to

between total which perceived
customer performance
perceived matches a
benefits and buyers
customer cost expectations

1-23
 Building Customer Relationships
Customer Relationship
Management

Customer Relationship Levels and Tools

Frequency
Basic Relationships Full Partnerships
Marketing
low-margin high-margin
Programs reward
customers customers
customers

1-24
 Building Customer Relationships
Engaging Customers

Customer-Engagement and Todays Digital and

Social Media
Customer-Engagement Marketing makes the brand a
meaningful part of consumers conversations and lives
by fostering direct and continuous customer involvement in
shaping brand conversations, experiences, and community.

1-25
 Building Customer Relationships
Engaging Customers
Customer Engagement and Todays Digital and
Social Media

Customer
engagement and
the social media:
Hertzs Share It
Up social media
campaign

Hertz System, Inc.

1-26
 Building Customer
Relationships
Engaging Customers

Consumer-Generated Marketing
Brand exchanges created by consumers
themselvesboth invited and uninvited
by which consumers are playing an
increasing role in shaping their own brand
experiences and those of other consumers.

1-27
 Building Customer
Relationships
Engaging Customers

Engaging customers:
Life is good starts with
a deeply felt,
engagement-worthy
sense of purpose:
spreading the power of
optimism.
instagrammable The Life is good Company

1-28
Copyright 2016 Pearson
 Building Customer Relationships
Partner Relationship
Management

Partner relationship management involves working

closely with partners in other company
departments and outside the company to jointly
bring greater value to customers.

1-29
 Capturing Value from
Customers
Creating Customer Loyalty and
Retention

Customer lifetime value

is the value of the entire
stream of purchases that
the customer would
make over a lifetime of
patronage.

1-30
 Capturing Value from Customers
Growing Share of Customer

Share of customer is the portion of the customers

purchasing that a company gets in its product
categories.

1-31
 Capturing Value from
Customers
Building Customer Equity

Customer equity is
the total
combined
customer lifetime
values of all of
the companys
customers.

1-32
 Capturing Value from
Customers
Building Customer Equity

Building the Right Relationships with the Right

Customers

FIGURE
1.5
Customer
Relations
hip
Groups

1-33
 The Changing Marketing Landscape
The Digital Age: Online, Mobile, and Social Media
Marketing

Digital and social media marketing involves using

digital marketing tools such as web sites, social
media, mobile ads and apps, online videos, e-mail,
and blogs that engage consumers anywhere, at any
time, via their digital devices.

1-34
 The Changing Marketing
The Digital Age: Online, Mobile, and Social Media
Landscape
Marketing

1-35
 The Changing Marketing
Landscape

Not-for-
profit
marketing
growth
Rapid
globalizati
on
Sustainabl
e
marketing

1-36
So, What Is Marketing? Pulling It All
Together

1-37