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PRINCIPLES OF MARKETING

Lecturer: Assoc.Prof.Dr. Nguyen Thi Tuyet Mai

Chapter One

Creating Customer Value and

engagement

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Introduction
• Study
 BA: NEU
 MBA: Boise State University
 Ph.D. (in marketing): National University of Singapore
• Teaching
 National Economics University (NEU)
 National University of Laos
 Washington State University (USA)
 Chuo University; Doshisha University (Japan)
• Research & consulting
 Marketing (consumer behavior & macromarketing)
 Entrepreneurship
 Knowledge creation & management
 Working: Faculty of Business Management

Creating and Capturing

Customer Value
Topic Outline
• Define marketing and outline the steps in the
marketing process
• Understanding the Marketplace and Customer
Needs
• Designing a Customer-Driven Marketing Strategy
• Preparing an Integrated Marketing Plan and
Program
• Building Customer Relationships
• Capturing Value from Customers

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What Is Marketing?

Marketing is a process by which

companies create value for customers
and build strong customer relationships
to capture value from customers in
return

The customers

• What do customers buy?

Benefits!
• Where is the value of a
product found?
In the customer’s
mind!
• People are different with
different needs, wants & tastes.
Therefore, product values are
different.

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Important Point: don’t

focus on the product,
focus on the benefit

Ad suggests that drinking

more orange juice can
fight cancer

The product is juice, but

the benefit is health

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Definition of Marketing

• Marketing is the management

process for identifying,anticipating
and satisfying customer
requirements profitably
(….requirements whilst achieving the
goals of the organisation)

The Chartered Institute of Marketing

Definition of Marketing

• The object of a business is not to

make money. The object of a
business is to serve its customers -
the result is to make money
John Frazer- Robinson 1998

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Understanding the Marketplace

and Customer Needs
Core Concepts
• Customer needs, wants, and demands
• Market offerings
• Customer Value and satisfaction
• Exchanges and relationships
• Markets

Key concepts in marketing

Marketing
concept

Exchange and
Relationship

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Understanding the Marketplace

and Customer Needs
Customer Needs, Wants, and Demands

• States of deprivation
• Physical—food, clothing, warmth, safety
Needs • Social—belonging and affection
• Individual—knowledge and self-expression

• Form that human needs take as they are shaped by

Wants culture and individual personality

Demands • Human wants backed by buying power

Give examples!

Understanding the Marketplace

and Customer Needs

• Market offerings are some

combination of products, services,
information, or experiences offered to a
market to satisfy a need or want
• Marketing myopia is focusing only on
existing wants and losing sight of
underlying consumer needs

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Understanding the Marketplace

and Customer Needs
Customer Value and Satisfaction
Expectations
Customers
• Value and
satisfaction

Marketers
• Set the right level of
expectations
• Not too high or low

Understanding the Marketplace

and Customer Needs

Exchange is the act of obtaining a

desired object from someone by offering
something in return

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Understanding the Marketplace

and Customer Needs

Markets are the set of actual and

potential buyers of a product or service

Designing a Customer-Driven
Marketing Strategy

Marketing management is the art and

science of choosing target markets and
building profitable relationships with
them
– What customers will we serve?
– How can we best serve these customers?

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Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Market segmentation refers to dividing

the markets into segments of customers
Target marketing refers to which
segments to go after

Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Demarketing is marketing to reduce

demand temporarily or permanently; the
aim is not to destroy demand but to
reduce or shift it

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Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

• The value proposition is the set of

benefits or values a company promises
to deliver to customers to satisfy their
needs

Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal

concept concept concept concept concept

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Pepsi
Social
Marketing concept Production
concept

Marketing
Modern concepts Product
Marketing concept
New concept
Selling
concept

Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production concept is the idea that

consumers will favor products that are
available or highly affordable

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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Product concept is the idea that

consumers will favor products that offer
the most quality, performance, and
features. Organizations should
therefore devote its energy to making
continuous product improvements.

Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept is the idea that

consumers will not buy enough of the
firm’s products unless it undertakes a
large scale selling and promotion effort

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Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Marketing concept is the idea that

achieving organizational goals depends
on knowing the needs and wants of the
target markets and delivering the
desired satisfactions better than
competitors do

Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing concept is the idea

that a company should make good
marketing decisions by considering
consumers’ wants, the company’s
requirements, consumers’ long-term
interests, and society’s long-run
interests

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Preparing an Integrated Marketing

Plan and Program
• The marketing mix is the set of tools
(four Ps) the firm uses to implement its
marketing strategy. It includes product,
price, promotion, and place.
• Integrated marketing program is a
comprehensive plan that communicates
and delivers the intended value to
chosen customers.

Building Customer Relationships

Customer Relationship Management
(CRM)

• The overall process of building and

maintaining profitable customer
relationships by delivering superior
customer value and satisfaction

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Building Customer Relationships

Relationship Building Blocks: Customer
Value and Satisfaction

Customer Customer
perceived value satisfaction
• The difference • The extent to
between total which a
customer value product’s
and total perceived
customer cost performance
matches a
buyer’s
expectations

Building Customer Relationships

Partner relationship management

involves working closely with partners in
other company departments and
outside the company to jointly bring
greater value to customers

HOW?

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Building Customer Relationships

Partner Relationship Management
• Partners inside the company is every
function area interacting with customers
– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships

The New Marketing Landscape

Major Developments

Rapid
Digital age
globalization

Ethics and
Not-for-profit
social
marketing
responsibility

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