Defining MARKETING & Customer

Value
Chapter 1

Professor Lichtenthal
 BASICS OF MARKETING -
OVERVIEW

The adoption of marketing management

Economics and marketing contrasted
The core concepts of marketing
Marketing management
Company orientations toward the market
Customer value, satisfaction and retention
Relationship marketing
 THE ADOPTION OF MARKETING
PRACTICES

In the business sector:

packaged-goods & consumer durables companies
consumer service companies
industrial equipment companies
professional / business service providers
experiences
In the nonprofit sector:
Education, healthcare, religion, cultural,
philanthropy, government, public welfare
 ECONOMICS AND MARKETING
CONTRASTED

ECONOMICS MARKETING
Scarcity Plenty

Economic Efficiency Better Sellers, Buyers & Society

=> Supply & Demand

Resource Allocation Consumer Needs & Wants

What, Who, How
Producers = Supply & Influence

Assumptions Assumptions
 THE CORE CONCEPTS OF
MARKETING - Overview

Needs, Wants & Demands

Products, Services, Ideas: Benefits
Satisfaction: Value - Cost
Transactions, Exchanges, Relationships
Markets
Marketing
 TRANSACTIONS, EXCHANGES &
RELATIONSHIPS

TRANSACTIONS

EXCHANGES

RELATIONSHIPS

MARKETS & MARKETING

MARKETING MANAGEMENT DEFINED

The process by which companies create value for customers

and build strong customer relationships in order to capture
value from customer in return - TEXT

The social and managerial process of planning and

executing the conception, pricing, distribution and promotion
of experiences, ideas, services, and goods to create
exchanges & relationships that satisfy personal and
marketing organization goals = SHARING VALUE

(Prof L summary)
 MARKETING MANAGEMENT
Primary Tasks: Level, Timing and Character

DEMAND MARKETING FOCUS EXAMPLES

STATE TASK
NEGATIVE CONVERSIONAL CHANGE DISLKES
TO LIKES
FALLING REMARKETING REBUILD DEMAND

IRREGULAR SYNCHRO- MATCH PATTERNS

MARKETING OF SUPPLY AND
DEMAND
FULL MAINTENANCE SUSTAIN DEMAND
MARKETING
UNWHOLE- COUNTER DESTROY
MARKETING DEMAND
SOME
 MARKETING CORE CONCEPTS
INTERRELATED

Needs, wants, Products, services Value, cost, and

and demands and ideas satisfaction

Transactions, Exchanges
and relationships

Marketing and Markets

marketers
 MARKETING PHILOSOPHY:
COMPANY ORIENTATIONS

The production concept

The product concept
The selling concept
The marketing concept:
target market
customer needs
coordinated marketing
profits through customer satisfaction & superior value
The societal marketing concept
 Management orientations

PRODUCTION PRODUCT SELLING MARKETING SOCIETAL

CONCEPT CONCEPT CONCEPT CONCEPT CONCEPT

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

 Production Concept
Consumers will favor products that are available
and affordable

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

 Product Concept
Consumers will favor products that offer the most
in quality, performance, and innovative features

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Selling Concept
Consumers will not buy
enough without a large scale
selling and promotion effort

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Marketing Concept
Focus on satisfying the needs and wants of target
markets

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Societal Marketing Concept

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

 CUSTOMER RELATIONSHIP
MANAGEMENT

The overall process of building and maintaining

profitable customer relationships by delivering
superior customer value and satisfaction

Customer satisfaction, value and retention

Relationship marketing continuum and, tools for retention
Share of customer, customer equity

Ultimately, this course is about addressing this in

great detail
 CUSTOMER VALUE,
SATISFACTION AND RETENTION

CDV=TCV-TCC
C S = Perceived Performance Expectations
it costs 5 -> 10 times MORE to attract new customers
than it does to keep current customers satisfied
a marketers concern is the lifetime value of a
customer (net present value of revenue expenses)
Tracking Tools:
Complaint / Suggestion Systems
Customer Satisfaction Surveys
Lost Customer Analysis
Ghost Shopping
 Customer Satisfaction

Satisfaction is a persons feelings of pleasure or

disappointment resulting from comparing a products
perceived performance (or outcome) in relation to his
/her expectations

Satisfied customers
Are loyal longer
Buy more (new products and upgrades)
Spread favorable word-of-mouth
Are more brand loyal (i.e., less price sensitive)
Offer feedback
Reduce transactions costs
 Customer Satisfaction
Performance SATISFACTION

Expected
level

DISSATISFACTION

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

 RELATIONSHIP MARKETING

Basic Reactive Accountable Proactive Partners

Selling Call If Qs Follow-up Time/Time Continuous

Share of a Customer
- portion of purchases your firm gets
Customer Equity
- combined lifetime values of all of a firms customers
Overall Goal Relationship Marketing:
- attracting and retaining profitable customers
Relationship Marketing Tools

Adding Financial Benefits

e.g., Frequent Flier or Points Programs,
Adding Social Benefits
e.g., Special Programs / Services
Adding Structural Ties
e.g., Special Equipment
Seeking Profitable Customers