Copyright 2015 Pearson Education, Inc.

Learning Objectives
Define marketing and outline the steps
in the marketing process.
Explain the importance of
understanding the marketplace and
customers and 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.
Copyright 2015 Pearson Education, Inc.

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Learning Objectives
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.
Copyright 2015 Pearson Education, Inc.

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First Stop: Amazon.com

Reason for Amazons success highly
customer driven
Creates unique personal customer
experience

Personalized home pages

Personalized product recommendations

Discovery factorusers of the site are

compelled to look, learn, and discover
Archetype for other companies focused
on delivering customer value
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Marketing
Marketing involves creating value for
customers and building strong
customer relationships in order to
capture value from customers in
return.
Goals:

Attract new customers by promising

superior value
Keep and grow current customers by
delivering satisfaction
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Forms of Marketing

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Figure 1.1 - The Marketing Process:

Creating and Capturing Customer
Value

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Understanding the
Marketplace
and Customer Needs

Core customer and marketplace

concepts

Needs, wants, and demands

Market offerings (products, services,
and experiences)
Value and satisfaction
Exchanges and relationships
Markets

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Customer Needs, Wants,

and Demands

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Market Offerings
Combination of products, services,
information, or experiences

Offered to a market to satisfy a need or

want
Entitiesproducts, services, persons,
places, organizations, information, and ideas

Marketing myopia: Paying more

attention to the specific products a

company offers than to the benefits and
experiences produced by these products
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Customer Value and

Satisfaction
Customers form expectations about the

value and satisfaction of market offerings.

Satisfied customers buy again and spread the
word.
Dissatisfied customers switch to competitors
and criticize the product to others.

Setting low expectations may satisfy those

who buy but fail to attract enough buyers.
Setting high expectations may disappoint
buyers.

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Exchanges and
Relationships
Exchange is the act of obtaining a

desired object from someone by

offering something in return.
Marketing consists of creating,
maintaining, and growing desirable
exchange relationships with target
audiences.
Marketers build strong relationships by
consistently delivering superior
customer value.
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Markets
Set of all actual and potential buyers of
a product or service
Consumers market:

Search for products

Interact with companies to obtain
information
Make purchases

Customer-managed relationships are

important as customers are empowered

and marketing is made a two-way affair.
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Figure 1.2 - A Modern Marketing

System

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Designing a Customer-Driven
Marketing Management
Marketing management: Choosing
target markets and building
profitable relationships with them
Basic factors to design a winning
marketing strategy:
Target market
Value proposition

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Designing a Customer-Driven
Marketing Strategy
Selecting customers to serve
Choosing a value proposition
Marketing management orientations

Production concept
Product concept
Selling concept
Marketing concept
Societal marketing concept

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Figure 1.3 - The Selling and

Marketing Concepts Contrasted

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Figure 1.4 - Three Considerations

Underlying the Societal Marketing
Concept

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Marketing Mix
Set of marketing tools the firm uses

to implement its marketing strategy

Product
Price
Place
Promotion

Each tool should be blended into a

comprehensive integrated marketing

program.
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Customer Relationship
Management
Delivering superior customer value and
satisfaction to build and maintain
profitable customer relationships

Customer-perceived value: Customers

evaluation of the difference between all the
benefits and costs of a marketing offer
relative to those of competing offers
Customer satisfaction: Extent to which a
products perceived performance matches
a buyers expectations

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Customer Relationship
Levels
and Tools

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Customer-Engagement
Marketing
Customer-engagement marketing

involves fostering direct and continuous

customer involvement in shaping brand
conversations, experiences, and
community.
Greater consumer empowerment means
that companies should rely on
marketing by attraction.
The key is to find ways to enter
consumers conversations with
engaging and relevant brand messages.
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Consumer-Generated
Marketing
Brand exchanges created by
consumers

Consumers play an increasing role in

shaping their own brand experiences
and those of other consumers.

Occurs through:
Uninvited consumer-to-consumer
exchanges
Invitation of consumers by companies
Asking for new product and service ideas
Asking to play an active role in shaping ads
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Partner Relationship
Management
Working closely with partners both

inside and outside the company to

jointly bring more value to customers
Partners inside the firmcrossfunctional teams
Partners outside the firmsuppliers,
channel partners

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Creating Customer Loyalty

and Retention
Keeping customers loyal proves

economical to the company.

Customer lifetime value: Value of
the entire stream of purchases a
customer makes over a lifetime of
patronage
Customer defections can be costly
Can lose that customers lifetime value

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Share of Customer
Portion of the customers purchasing
that a company gets in its product
categories
Increased by:

Having good customer relationship

management
Offering greater variety to current
customers
Creating programs to cross-sell and upsell to market more products and
services to existing customers
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Customer Equity
Total combined customer lifetime

values of all of the companys

current and potential customers
Helps to measure the future value of
the companys customer base
Increases when the loyalty of the
firms profitable customers increases
Better measure of a firms
performance than current sales or
market share
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Figure 1.5 - Customer

Relationship Groups

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The Changing Marketing

Landscape

Digital age
Changing economic environment
Growth of not-for-profit marketing
Rapid globalization
Call for more ethics and social
responsibility

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The Digital Age: Online, Mobile,

and Social Media Marketing
Digital and social media marketing:

Engaging consumers via their digital

devices using digital marketing tools and
social media
Mobile marketing: Using mobile
channels to stimulate immediate buying,
make shopping easier, and enrich the
brand experience
Blending the new digital approaches with
traditional marketing creates a smoothly
integrated marketing strategy and mix.
Copyright 2015 Pearson Education, Inc.

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Changing Economic
Environment
The Great Recession from 2008 to
2009 undermined consumer
confidence.
Post-recession era

Consumers have become more frugal.

New consumer spending values
emphasize simpler living.
Marketers are focusing on practicality
and durability in their product offerings
and marketing pitches.
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Growth of Not-for-Profit
Marketing
Not-for-profits face stiff competition
for support and membership.
Sound marketing can help them
attract membership, funds, and
support.

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Rapid Globalization and

Societal Marketing
Managers around the world are

taking both local and global views of

the companys:
Industry
Competitors
Opportunities

Corporate ethics and social

responsibility have become

important for every business.
Copyright 2015 Pearson Education, Inc.

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Figure 1.6 - An Expanded

Model of
the Marketing Process

Copyright 2015 Pearson Education, Inc.

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Learning Objectives
Define marketing and outline the steps
in the marketing process.
Explain the importance of
understanding the marketplace and
customers and 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.
Copyright 2015 Pearson Education, Inc.

1-36

Learning Objectives
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.
Copyright 2015 Pearson Education, Inc.

1-37

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright 2015 Pearson Education, Inc.