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Marketing:AnIntroductionFifteenthEditionChapter01Marketing:CreatingCustomerValueandEngagementCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)1.1

Definemarketingandoutlinethestepsinthemarketingprocess.1.2

Explaintheimportanceofunderstandingthemarketplaceandcustomersandidentifythefivecoremarketplaceconcepts.1.3

Identifythekeyelementsofacustomervalue-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.ObjectivesOutline(2of2)1.4Discusscustomerrelationshipmanagementandidentifystrategiesforcreatingvaluefor

customersandcapturingvaluefromcustomersinreturn.1.5Describethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisageofrelationships.FirstStop:AmazonAmazondoesmuchmorethanjustsellgoodsonline.Itengagescustomersandcreatessatisfyingcustomerexperiences.“Thethingthatdriveseverythingiscreatinggenuinevalueforcustomers,”saysAmazonfounderJeffBezos.ObjectiveOutline1.1Definemarketingandoutlinethestepsinthemarketingprocess.WhatIsMarketing?Marketingisengagingcustomersandmanagingprofitablecustomerrelationships.GoalsofMarketingAttractnewcustomersbypromisingsuperiorvalueKeepandgrowcurrentcustomersbydeliveringsatisfactionFormsofMarketingTraditionalMakingasaleAbundanceofproductsinthenearbyshoppingcentersTelevision,magazine,anddirect-mailadsContemporarySatisfyingcustomerneedsImaginativeWebsitesandmobilephoneapps,blogs,onlinevideos,andsocialmediaReachcustomersdirectly,personally,andinteractivelyFigure1.1TheMarketingProcess:CreatingandCapturingCustomerValueObjectiveOutline1.1SummaryMarketing

createsvalueforcustomersunderstandmarketplaceandcustomersdesignacustomervalue-drivenmarketingstrategyconstructamarketingprogramengagecustomers,buildrelationshipsCapturesvaluefromcustomersObjectiveOutline1.2Explaintheimportanceofunderstandingthemarketplaceandcustomersandidentifythefivecoremarketplaceconcepts.UnderstandingtheMarketplaceandCustomerNeedsFivecorecustomerandmarketplaceconcepts:Needs,wants,anddemandsMarketofferingsValueandsatisfactionExchangesandrelationshipsMarketsCustomerNeeds,Wants,andDemands(1of2)NeedsStatesoffeltdeprivationPhysicalneeds—food,clothing,warmth,andsafetySocialneeds—belongingandaffectionIndividualneeds—knowledgeandself-expressionWantsFormtakenbyhumanneedswhenshapedbycultureandindividualpersonalityDemandsHumanwantsthatarebackedbybuyingpowerCustomerNeeds,Wants,andDemands(2of2)Stayingclosetocustomers:Airbnb’sCEOBrianChesky(left)andco-founderJoeGebbia(center)regularlystayatthecompany’shostlocations,helpingthemshapenewcustomersolutionsbasedonrealuserexperiences.MarketOfferingsProducts,services,information,orexperiencesOfferedtosatisfyaneedorwantMarketingmyopia—payingmoreattentiontothespecificproductsthantothebenefitsandexperiencesproducedCustomerValueandSatisfactionCustomersformexpectationsaboutthevalueandsatisfactionofmarketofferings.SatisfiedcustomersbuyagainDissatisfiedcustomersswitchtocompetitorsSettingtherightlevelofexpectationsLowexpectationsmayfailtoattractbuyersHighexpectationsmaydisappointbuyersExchangesandRelationshipsExchangeistheactofobtainingadesiredobjectbyofferingsomethinginreturn.Marketingconsistsofcreating,maintaining,andgrowingdesirableexchangerelationships.Strongrelationshipsarebuiltbyconsistentlydeliveringsuperiorcustomervalue.MarketsAllactualandpotentialbuyersofaproductSellersandConsumersmarketCustomer-managedrelationshipsFigure1.2AModernMarketingSystemObjectiveOutline1.2SummaryCustomersneeds,wants,anddemandsCustomerlifetimevalueandshareofcustomerLong-termcustomerequityOthermarketplaceconceptsmarketofferingsvalueandsatisfactionexchangeandrelationshipsmarketsValuepropositionObjectiveOutline1.3Identifythekeyelementsofacustomervalue–drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.DesigningaCustomerValue–DrivenMarketingStrategy(1of4)Customervalue-drivenmarketingstrategy

Onceacompanyfullyunderstandsitsconsumersandthemarketplace,itmustdecidewhichcustomersitwillserveandhowitwillbringthemvalue.”Marketingmanagement:ChoosingtargetmarketsandbuildingprofitablerelationshipsDesigningawinningmarketingstrategyTargetmarket?Valueproposition?DesigningaCustomerValue–DrivenMarketingStrategy(2of4)SelectingcustomerstoserveMarketsegmentationreferstodividingthemarketsintosegmentsofcustomers.Targetmarketingreferstowhichsegmentstogoafter.DesigningaCustomerValue–DrivenMarketingStrategy(3of4)Choosingavalueproposition—thecompanymustdecidehowitwilldifferentiateandpositionitselfinthemarketplace.DesigningaCustomerValue–DrivenMarketingStrategy(4of4)MarketingManagementOrientationsProductionconceptProductconceptSellingconceptMarketingconceptSocietalmarketingconceptFigure1.3TheSellingandMarketingConceptsContrastedFigure1.4ThreeConsiderationsUnderlyingtheSocietalMarketingConceptPreparinganIntegratedMarketingPlanandProgramMajormarketingmixtoolsFourPsofmarketingProductPricePlacePromotionMarketingmixtoolsshouldbeblendedintoacomprehensiveintegratedmarketingprogram.ObjectiveOutline1.3SummaryMarketsegmentationTargetmarketingDifferentiationandpositioningProductionandproductconceptsSellingandmarketingconceptsSocietalmarketingconceptObjectiveOutline1.4Discusscustomerrelationshipmanagementandidentifystrategiesforcreatingvalueforcustomersandcapturingvaluefromcustomersinreturn.CustomerRelationshipManagementDeliveringsuperiorcustomervalueandsatisfactiontobuildandmaintainprofitablecustomerrelationshipsCustomer-perceivedvalue:Customer’sevaluationofamarketingofferrelativetothoseofcompetingoffersCustomersatisfaction:Extenttowhichaproduct’sperceivedperformancematchesabuyer’sexpectationsCustomerRelationshipLevelsandTools(1of2)LevelsBasicrelationshipsLow-margincustomersFullpartnershipsHigh-margincustomersToolsFrequencymarketingprogramsLoyaltyrewardsprogramsClubmarketingprogramsCustomerRelationshipLevelsandTools(2of2)Relationshipmarketingtools:AsanUberRewardsmember,themoreyouuseUber,themoreyoubenefit,withperkssuchaslocked-inpricing,priorityairportpickups,accesstohighlyrateddrivers,andcomplimentaryupgradesatnoextracost.Customer-EngagementMarketingCustomer-engagementmarketingmakesthebrandameaningfulpartofconsumers’conversationsandlives.Greaterconsumerempowermentmeansthatcompaniesmustpracticemarketingbyattraction.Marketersmustfindwaystoenterconsumers’conversationswithengagingandrelevantbrandmessages.Consumer-GeneratedMarketingBrandexchangescreatedbyconsumersConsumersplayanincreasingroleinshapingtheirownbrandexperiencesandthoseofotherconsumers.UninvitedandInvitedConsumer-to-consumerexchangesConsumersinvitedbycompaniesNewproductandserviceideasActiveroleinshapingadsPartnerRelationshipManagementWorkingcloselywithpartnersbothinsideandoutsidethecompanytojointlybringmorevaluetocustomersPartnersinsidethefirm—cross-functionalteamsPartnersoutsidethefirm—suppliers,channelpartnersCreatingCustomerLoyaltyandRetentionKeepingcustomersloyalmakesgoodeconomicsense.Customerlifetimevalueisthevalueoftheentirestreamofpurchasesacustomermakesoveralifetimeofpatronage.CustomerdefectionscanbecostlyCanlosethatcustomer’slifetimevalueMaycauseothercustomerstodefectGrowingShareofCustomerPortionofthecustomer’spurchasingintheirproductcategoriesShareofCustomerisincreasedby:GoodcustomerrelationshipmanagementOfferinggreatervarietytocurrentcustomersCreatingprogramstocross-sellandup-selltoexistingcustomersBuildingCustomerEquityTotalcombinedcustomerlifetimevaluesofallofthecompany’scustomersMeasuresthefuturevalueofthecompany’scustomerbaseIncreaseswhentheloyaltyofthefirm’sprofitablecustomersincreasesBettermeasureofafirm’sperformancethancurrentsalesormarketshareCustomerEquityCadillac:ManagingCustomerEquityManagingcustomerequity:Toincreasecustomerequity,Cadillacismakingtheclassiccarcoolagainamongyoungerbuyers.Forexample,saysGM,“Cadillacwillleadthecompanytoanall-electricfuture.”Figure1.5CustomerRelationshipGroupsObjectiveOutline1.4SummaryCustomerrelationshipmanagementCustomer-engagementmarketingCustomerequityCustomervalueandsatisfactionCreatingvaluefor

customersandcapturingvaluefromcustomersinreturn.ObjectiveOutline1.5Describethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisageofrelationships.TheChangingMarketingLandscapeDigitalAgeChangingEconomicEnvironmentGrowthofNot-for-ProfitMarketingRapidGlobalizationSustainableMarketingTheDigitalAge:Online,Mobile,andSocialMediaMarketingDigitalandsocialmediamarketing:EngagingconsumersviatheirdigitaldevicesusingdigitalmarketingtoolsMobilemarketing:Usingmobilechannelstostimulateimmediatebuying,makeshoppingeasier,andenrichthebrandexperienceBlendingthenewdigitalapproacheswithtraditionalmarketingcreatesasmoothlyintegratedmarketingstrategyandmix.SocialMediaMarketingOnlinesocialmediaprovideadigitalhomeforpeopletoconnectandshareimportantinformationandlife’smoments.Socialmediaofferanidealplatformforreal-timemarketingandengagement.Facebook,Twitter,Snapchat,andsmallermorefocusedsites.BigDataandArtificialIntelligence(AI)MarketerscannowamassmountainsofdataBrandscanusebigdatato:gaindeepcustomerinsightspersonalizemarketingoffersandimprovecustomerengagementsandserviceGrowthofNot-for-ProfitMarketingSoundmarketingcanhelpnot-for-profitsattractmembership,funds,andsupport.RapidGlobalizationandSustainableMarketingManagersaroundtheworldaretakingbothlocalandglobalv

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