Chapter 1 Creating and capturing customer value by Philip Kotler
- 1. 1 Chapter 1 Marketing in a Changing World: Creating Customer Value and Satisfaction
- 2. 2 What is Marketing? Process by which individuals and groups obtain what they needneed and wantwant through creating and exchanging productsexchanging products and value with others. Simply put: Marketing is the delivery of customer satisfaction at a profit.
- 3. 3 Core Marketing Concepts (Fig. 1-1) Needs, wants, and demands Products and services Value, satisfaction, and quality Exchange, transactions, and relationships Markets
- 4. 4 NeedsNeeds - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry. WantsWants - form that a human need takes as shaped by culture and individual personality. i.e. I want a hamburger, French fries, and a soft drink. DemandsDemands - human wants backed by buying power. i.e. I have money to buy this meal. What are Consumer’s Needs, Wants and Demands?
- 5. 5 Products Anything that can be Offered to a Market to Satisfy a Need or Want ExperiencesExperiences PersonsPersons PlacesPlaces OrganizationsOrganizations IdeasIdeasInformationInformation What Will Satisfy Consumer’s Needs and Wants? Services Activities or Benefits Offered for Sale That Are Essentially Intangible and Don’t Result in the Ownership of Anything
- 6. 6 How Do Consumers Choose Among Products and Services? Total Quality Management Involves Improving the Quality of Products, Services, and Marketing Processes Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value
- 7. 7 ExchangesExchanges TransactionsTransactions RelationshipsRelationships Building a Marketing Network Consisting of The Company and All Its Supporting Stakeholders How Do Consumers Obtain Products and Services?
- 8. 8 Who Purchases Products and Services? People Who Exhibit Need Resources to Exchange Willingness to Exchange Unexpected Situational Factors Attitudes of Others Ethical Potential Buyers Market – Buyers who share a particular need or want that can be satisfied through exchange or relationships. Actual Buyers
- 9. 9 Suppliers End User Market End User Market Marketing Intermediaries Competitors Company (Marketer) Environment Environment Modern Marketing System (Fig. 1-3)
- 10. Discussion Connections In your own words, what is marketing? What does marketing mean to you? Form small groups, and select a brand of athletic shoes that a group member has purchased recently. What Customer Value did the group member expect? Did the member experience Customer Satisfaction? Why or why not?
- 11. 11 Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Demand Management Finding and increasing demand, also changing or reducing demand such as in Demarketing Profitable Customer Relationships Attracting new customers and retaining and building relationships with current customers Marketing Management
- 12. 12 Stage 1. Entrepreneurial Marketing Stage 2. Formulated Marketing Stage 3. Intrepreneurial Marketing Marketing Management Practice
- 13. 13 Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept •Consumers favor products that are available and highly affordable. •Improve production and distribution. •Consumers favor products that offer the most quality, performance, and innovative features. •Consumers will buy products only if the company promotes/ sells these products. •Focuses on needs/ wants of target markets & delivering satisfaction better than competitors. •Focuses on needs/ wants of target markets & delivering superior value. Marketing Management Philosophies
- 14. 14 Marketing and Sales Concepts Contrasted Factory Existing Products Selling and Promoting Profits through Volume The Selling ConceptThe Selling Concept Starting Point Focus Means Ends Market Customer Needs Integrated Marketing Profits through Satisfaction The Marketing ConceptThe Marketing Concept
- 15. 15 Societal Marketing Concept Societal Marketing Concept Company (Profits) Consumers (Want Satisfaction) Society (Human Welfare)
- 16. 16 Marketing Challenges in the New “Connected” Millennium Text page 23 Connecting Technologies Computer Information Communication Transportation Connections with Customers Connecting more selectively Connecting for life Connecting Directly Connections with Marketing Partners •Connecting with other company departments •Connecting with suppliers and distributors •Connecting through strategic alliances Connections with the world around us •Global Connections •Connections with values and responsibilities •Broadened connections
- 17. 17 Learn About & Track Customers With Databases Communicate With Customers in Groups Or One-on-One Create Products & Services Tailored to Meet Customer Needs Distribute Products More Efficiently & Effectively Connecting Technologies in Computers, Telecommunications, Information, & Transportation Help To: Technologies for Connecting What aspects of the Internet make it a good forum for marketing? How do Web companies compete with brick and mortar companies? Click or press spacebar to return Text page 26
- 18. 18 The Internet The Internet has been hailed as the technology behind a new model for doing business. New applications include: Internet – connecting with customers, Intranets – connecting with others in the company, and Extranets – connecting with strategic partners, suppliers, and dealers. Purchasing will be over $1.4 trillion in 2003. 400,000 companies are now using the Internet to do business.
- 19. 19 Connections With Customers Most marketers are targeting fewer, potentially more profitable customers. Asking: What value does the customer bring to the organization? Are they worth pursuing? Focus has shifted to: keeping current customers, and building lasting relationships based on superior satisfaction and value.
- 20. 20 Direct Connections With Customers Many companies use technologies to let them connect more directly with their customers. Products available via telephone, mail-order catalogs, kiosks and e-commerce. Some firms sell only via direct channels (i.e. Dell Computer, www.Amazon.com), others use a combination. Direct marketing is redefining the buyer’s role in connecting with sellers. Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at www.LandsEnd.com.
- 21. 21 Connections With Marketing’s Partners Connecting Inside the Company Every employee must be customer-focused Teams coordinate efforts toward customers Connecting With Outside Partners Supply Chain Management Strategic Alliances
- 22. 22 Review of Concept Connections Define what marketing is and discuss its core concepts. Explain the relationships between customer value, satisfaction, and quality. Define marketing management and examine how marketers manage demand and build profitable customer relationships. Compare the five marketing management philosophies. Analyze the major challenges facing marketers heading into the next millennium.