Chapter 1-Marketing : Creating and Capturing Customer Value 1

Saeed Radhi

What is marketing ?

 Marketing mainly deals with customers ,and its simplest definition is “ managing profitable
customer relationships “
 The goal of marketing is to attract new customers by promising superior value and delivering
satisfaction .
 Sound marketing is critical to the success of both profit and non-profit organizations .
 There much more to marketing than what meets consumer’s causal eyes.

Marketing defined :

 Most people think that marketing is only selling and advertising , which is not correct , its only a
small portion of marketing .
 The old definition of marketing is “making a sale “ or “telling and selling “, however the new
sense is satisfy your customer’s needs .
 If the marketer understood the customer’s needs , they can develop products and services to
provide superior customer value ,prices , distributes and promotes the products and services
effectively .
 Peter drucker ‘s idea of marketing it to make selling unnecessary
 Marketing is social managerial process by which individuals and organizations obtain what they
want and need through creating and exchanging value with others.
 We can also define marketing as the process by which companies create value for customers
and build a strong customer relationships in order to capture from customers in return .
 Definition : Marketing is the activity , set of instructions and process for creating ,
communicating , delivering , and exchanging offerings that have value for customers clients
partners and society at large .

The marketing process : the simple 5 –steps :

 Understand customers ,Create customer value ,Build strong customer relationships , creating
value for customers and capturing value from customers in form of sales, profits , and equity .

Understanding the marketplace and customer needs :

Customer’s needs , wants and demands :

 Human needs , are states of felt deprivations , basic physical needs are food ,etc. and social
needs include belonging and affection , individual needs include knowledge and self-expression
 Human wants are needs that are shaped by cultural and individual personality (eg . need food
, wants  big mac ), they are objects to satisfy needs .
 Demands are wants that are backed by buying power .
 To understand customers the best ,companies conduct consumer research and analyze
consumer date , furthermore employees of all levels including top management stay close to
customers .
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Saeed Radhi

Market offerings , products, services and experiences :

 Customer needs and wants are fulfilled by Market offerings , which is a combination of
products and services , information , experiences offered to a market to satisfy a need or
want .
 Offerings are not limited to physical products , services , other entities such as places and
ideas ,etc .
 Marketing myopia is the mistake of paying more attention to specific products a company
offers than to the benefits and experiences produced by these products .

Customer value and satisfaction :

 Consumers have lots of products and services to choose from to satisfy a need ,they form
expectations about the value and satisfaction and buy according to that .
 Satisfied customers buy again and encourage people to buy , dissatisfied customers buy
from competitors and discourage people to buy .
 If marketers set expectations too low , they will satisfy who buy but don’t attract new buyers
, and if they set them too high , buyers will be disappointed .

Exchanges and relationships :

 Exchange is the act of obtaining a desired object from someone by offering something in return ,
its more than selling and trading , voting and church members are examples as well .
 Marketing consist of actions to build and maintain desirable exchange relationships with target
audience . and the main goal is to retain customer and grow their business with the company .

Markets :

 A market is the set of actual and potential buyers of a product or a service .

 Marketing means managing markets to bring profitable customer relationships, which needs
searching for buyers , knowing their needs , design market offerings , set prices , promote, store
, and deliver them .
 Marketing is not only carried out by sellers ,buyers can carry marketing when they search for
goods they need at a price they can afford .
 Building a successful relationship does not depend only on the actions of the company , but
how well the entire system serves the needs of final consumers .

Designing a Customer-driven marketing strategy :

 After we fully understand consumers, marketing management can design the strategy , we can
define marketing management as the art and science of choosing target markets and building
profitable relationships with them
 Marketing managers aim is to find and attract ,keep , grow customers .
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Saeed Radhi

 The strategy must answer 2 questions , what is our target market , and how can we serve this
market the best .

Selecting customers to serve :

 To decide who we will serve , we should divide the market into segments and then choose
which segment to go after , not trying to get as many customers as possible like some people
thing , but try get customers we can serve well .
 Some marketers even look for fewer customers by using “ demarketing “ , Eifel tower in peak
times as an example .

Choosing a value proposition :

 Companies should differentiate and position it self in the marketplace .

 A value proposition : is a set of benefits or values a company promises to deliver to customers
to satisfy their needs .(eg. nokia  communicating people ) and helps customers to answer why
should I buy your products and not your competitors .

Marketing management orientations :

 We should choose a philosophy to guide us to build a profitable relationship with target

customers , and know what weight to give to the interests of customers and organizations and
society which often conflicts .

The production concept :

 Holds that consumers favor available and affordable products , so management should focus on
production and distribution , however , it might lead to marketing myopia where the company
loose sigh of the real objective .

The product concept :

 Holds that consumers will favor products of most quality and performance and innovative
features , so the strategy focus on continuous improvements .

The selling concept :

 Holds that consumers will not buy enough of the firms products unless it undertakes a large-
scale selling and promotion effort , typacly for unsought goods such as insurance . they do not
focus on creating relationships but on making a sale .
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The marketing concept :

 Holds that achieving organizational goals by knowing consumers needs and wants and delivering
desired satisfactions better than computers do .

The social marketing concept :

 Says that the company’s marketing decisions should consider both short and long run welfare of
consumers and eventually the society .(eg . fast food chains

Preparing an integrated marketing plan and program :

 The strategy is to outline which customers to serve and how to create value for these customers
, the marketing program transfers the strategy into actions.
 The marketing mix , the four P’s are product , price , place ( make the offering available ) and
promotion ( persuade customers to buy ) are used to deliver the value to customers.