Marketing 461 /

Chapter 1
Marketing

Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

Chapter 1
Marketing
Creating and Capturing Customer Value
What Is Marketing?
Simple Definition:
Marketing is managing profitable customer
relationships.
Goals:
1 - Attract new customers by promising superior
value.
2 - Keep and grow current customers by delivering
satisfaction.
Marketing Defined
A social and managerial process by which
individuals and groups obtain what they need and
want through creating and exchanging products
and value with others.
Old View: Telling and Selling
New View: Satisfying Needs

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A Simple Model of the Marketing Process

Needs, Wants, and Demands

Needs:
A state of felt deprivation including physical, social,
and individual needs
Types of Needs:
1- Physical needs:
Food, clothing, shelter, safety
2 - Social needs:
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Marketing 461 /
Chapter 1
Marketing

Belonging, affection
3 - Individual needs:
Learning, knowledge, self-expression
Wants:
Form that a human need takes, as shaped by culture
and individual personality.
Wants + Buying Power = Demand
Marketing Offers
Some combination of products, services, information,
or experiences offered to a market to satisfy a need or
want.
Needs and wants are fulfilled through a marketing
offer.
Market Offerings
Products:
Persons, places, organizations, information, ideas.
Services:
Activity or benefit offered for sale that is essentially
intangible and does not result in ownership.
Brand Experiences:
. . . dazzle their senses, touch their hearts, stimulate
their minds.
Marketing Myopia
Successful marketers avoid marketing myopia when
constructing offers:
Marketing myopia occurs when sellers pay more
attention to the specific products they offer than to the
benefits and experiences produced by the products.
They focus on the wants and lose sight of the
needs.
Customer Value and Satisfaction
Setting proper expectations is critical:
- If performance is lower than expectations,
satisfaction is low.
- If performance is higher than expectations,
satisfaction is high.
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Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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Prepared by Mr. Amin Hady .
Mobile : 0503642263 - 0595051772

Marketing 461 /
Chapter 1
Marketing

Advertising Sets Expectations

Advertising is one of the primary methods by which
consumer expectations are formed.
Did this ad backfire for Microsoft ?

Exchanges and Relationships

Exchange:
- Act of obtaining a desired object from someone by
offering something in return.
What would be exchanged for a car?
Relationships:
- Marketing actions build and maintain relationships
with target audiences involving an idea, product,
service, or other object.
What Is a Market?
A Market:
- Is the set of actual and potential buyers of a product.
- These people share a need or want that can be
satisfied through exchange relationships.

Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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Figure 2:
Elements of a Modern Marketing Systems

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Marketing 461 /
Chapter 1
Marketing

Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

Marketing Management
The art and science of choosing target markets and
building profitable relationships with them.

- Requires that consumers and the marketplace be fully
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-understood.
- Aim is to find, attract, keep, and grow customers by
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creating, delivering, and communicating superior
-value.

Designing a winning marketing strategy requires
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answers to the following questions:

1. What customers will we serve? What is our target
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market?
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2. How can we best serve these

customers? What is our value proposition?

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Segmentation and Target Marketing

Market Segmentation
Divides the market for a product category into


segments of consumers.
Target Marketing
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Process of selecting one or more of these segments to

target.

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Demand Management
Finding and increasing demand, also changing or
reducing demand, as in demarketing.
Demarketing
Temporarily or permanently reducing the number of
customers or shifting their demand.
Choosing a Value Proposition
The set of benefits or values a company promises to
deliver to consumers to satisfy their needs.
- Value propositions dictate how firms will
differentiate
and position their brands in the marketplace.
Land Rovers Value Proposition
Go Beyond
Land Rovers ad invites its readers
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Marketing 461 /
Chapter 1
Marketing

to get a taste of adventure, whatever your tastes.

Marketing Management Philosophies
Five key marketing management philosophies:
- Production Concept
- Product Concept
- Selling Concept
- Marketing Concept
- Societal Marketing Concept
The Marketing Concept
A marketing management philosophy that holds that
achieving organizational goals depends on knowing
the needs and wants of target markets and delivering
the desired satisfactions better than competitors.

Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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Figure 3:
Marketing Management Orientations

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Prepared by Mr. Amin Hady .

Mobile : 0503642263 - 0595051772

Marketing 461 /
Chapter 1
Marketing

The Integrated Marketing Plan

Transforms the marketing strategy into
action. Includes the marketing mix and the
4 Ps of marketing:
- Product
- Price
- Place
- Promotion
Customer Relationship Management
The overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction.
Building Customer Relationships
- Customer Relationship Management
(CRM):
CRM deals with all aspects of acquiring,
keeping, and growing customers.
- Customer value and satisfaction are key.
Customer Perceived Value
Customers evaluation of the difference
between all of the benefits and all of the costs
of a marketing offer relative to those of
competing offers.
Customer perceived value:
- Perceptions may be subjective.
- Consumers often do not objectively judge
values and costs
Customer Satisfaction
- Dependent on the products perceived
performance relative to a buyers
expectations.
- Customer satisfaction often leads to
consumer loyalty.
- Some firms seek to DELIGHT customers
by exceeding expectations.
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Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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Prepared by Mr. Amin Hady .

Mobile : 0503642263 - 0595051772

Marketing 461 /
Chapter 1
Marketing

Customer Relationships
- Loyalty and retention programs build
relationships and may feature:
- Financial Benefits
E.g., frequency marketing programs
- Social Benefits
E.g., club marketing programs
- Structural Ties
- Focus is on relating directly to profitable
customers, for the long term.
Changing Nature of Relationships
- Selective Relationship Management:
Customer profitability analysis eliminates
losing customers and selects profitable ones.
- Relating more deeply and interactively via
blogs, social network Web sites, email, and
video sharing.
- Marketing by attraction vs. intrusion.
Increased amounts of consumer generated
marketing.
Partner Relationship Marketing
Partners Inside the Firm
All employees customer focused
Teams coordinate efforts toward customers
Partners Outside the Firm
Supply chain management
Strategic alliances
Marketing partners help to create customer
value and assist in building customer
relationships.
Capturing Value from Customers
Superior customer value results in:
- Customer loyalty and retention
- A growing share of customers
- Customer equity

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Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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Prepared by Mr. Amin Hady .

Mobile : 0503642263 - 0595051772

Marketing 461 /
Chapter 1
Marketing

Capturing Value from Customers

Customer Lifetime Value
- The entire stream of purchases that the
customer would make over a lifetime of
patronage.
Share of Customer
- The share a company gets of the customers
purchasing in their product categories.
Customer Equity
The combined discounted customer lifetime
values of all the companys current and
potential customers.
- Classify customers by loyalty and potential
profitability
- Manage accordingly
Customer Relationship Groups
Classifying by customer loyalty and
profitability yields four groups:
- Butterflies
- True Friends
- Strangers
- Barnacles
Changing Marketing Landscape
- The Digital Age
- Rapid Globalization
- Call for More Ethics and Social
Responsibility
- Growth of Not-for-Profit Marketing

Prepared by Mr. Amin Hady

e-mail:hadiamin@hotmail.com

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With my best wishes

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Mr. Amin Hady

Prepared by Mr. Amin Hady .
Mobile : 0503642263 - 0595051772