welcome to chapter one in this video  series on the principles of marketing  

in this video we will discuss what is marketing  and creating customer value and engagement  

let's get started creating customer value and  engagement for real world examples look no further  

than amazon.com for a company with a passion  for customer engagement value and relationships  

their dedication makes them the world's largest  online retailer they are a model for other  

companies that focus on delivering exceptional  customer value this chapter will review five  

learning objectives objective one define marketing  and outline the steps in the marketing process  

objective two discuss the importance of  understanding the marketplace and customers  

and identify five core marketplace concepts  objective three identify the key elements of  

a customer driven marketing strategy and discuss  marketing management orientations that guide the  

marketing strategy objective 4 discuss customer  relationship management and identify strategies  

for creating value for customers and capturing  value for customers in return and objective five  

describe the major trends and forces that are  changing the marketing landscape in this age of  

relationships the following slides will review  these objectives in more detail objective one  

define marketing and outline the steps in the  marketing process what exactly is marketing  

marketing is a process where companies  create value for customers and build strong  

customer relationships in order to capture value  from customers in return marketing attracts new  

customers by promising superior value and grows  a customer base for delivering satisfaction  

the steps for the marketing process include  understanding the marketplace and customer needs  

design a marketing strategy construct an  integrated marketing program build profitable  

relationships and capture value from customers  to create profits and customer equity in summary  

marketing creates value for and captures value  from customers learning objective two identify  

the five core marketplace concepts that leads to  understanding the marketplace and customer needs  

needs are defined as states of deprivation  wants are the forms that needs take  

and demands are wants that are backed by buying  power market offerings are a combination of  

products services information or experiences  offered to a market to satisfy a need or want  

while marketing myopia focuses on existing wants  and losing sight of underlying consumer needs  

customers and marketers customers continually  seek value and satisfaction in the marketplace  

while marketers are responsible for  setting the right level of expectations  

exchanges and relationships an exchange is an  act of obtaining a desired object from someone  

by offering something in return marketing actions  try to create maintain and grow desirable exchange  

relationships this figure shows the process of how  a product in the marketplace gets to the consumer  

each party in a modern marketing system adds  value to the next level and is affected by major  

forces marketing means managing markets to  bring about profitable customer relationships  

outstanding marketing companies go to great  lengths to learn about their customers  

the five core marketplace concepts are customer  needs wants and demands market offerings such as  

products services and experiences customer value  and satisfaction exchanges and relationships and  

markets learning objective three identify the key  elements of a customer driven marketing strategy  

and discuss the marketing management orientations  that guide that strategy this includes designing  

a customer value driven marketing strategy and  preparing an integrated marketing plan and program  

marketing management is the art and  science of choosing target markets  

and building profitable relationships with them  two primary questions that merit discussion are  

what customers will we serve and how can we best  serve them selecting customers to serve reviews  

two key elements market segmentation which  divides the markets into segments of customers  

and target marketing which refers to which  segments that are chosen to pursue choosing  

a value proposition a brand's value proposition is  a set of benefits or values it promises to deliver  

to customers to satisfy their needs there  are five different concepts associated with  

marketing management orientations  production concept product concept  

selling concept marketing concept and societal  marketing concept as shown in the diagram  

in the production concept consumers will  favor products that are both available  

and highly affordable in the product  concept consumers favor products that  

offer the most quality performance and features  additional emphasis is placed on continuous  

product improvements in the selling concept  consumers will not buy enough of the firm's  

products unless the firm undertakes a large-scale  selling and promotional effort in the marketing  

concept you must know the needs and wants of the  target markets and deliver satisfaction better  

than your competitors in societal marketing the  company's marketing decisions must consider the  

consumer's wants the company's requirements the  consumer's long-run interests and society's long  

run interests this figure contrasts the selling  concept and the marketing concept the selling  

concept takes an inside out perspective it focuses  on the factory and existing products and calls for  

heavy selling and promotion to obtain profits the  marketing concept takes an outside in perspective  

it starts with a well-defined market focuses on  customer needs and integrates marketing activities  

that affect customers it generates profits by  creating relationships with the right customers  

this figure shows how companies should  balance three concepts and setting strategies  

company profits consumer wants and society's  interests preparing an integrated marketing  

plan includes a marketing mix which is a set  of tools used to implement a marketing strategy  

this is often called the four ps  product price promotion and place  

an integrated marketing plan communicates and  delivers the intended value to selected customers  

learning objective 3 summary creating value  and engagement plays a critical role designing  

a customer driven marketing strategy that selects  your customers chooses your value proposition and  

develops your marketing management orientations  it is also important to prepare an integrated  

marketing plan and platform learning objective 4  develop your customer relationship management plan  

and identify strategies for creating value for  customers and capturing value from customers  

in return customer relationship management or crm  is the overall process of building and maintaining  

profitable customer relationships by delivering  superior customer value and satisfaction  

the crm building blocks include customer perceived  value and customer satisfaction customer perceived  

value is the difference between total customer  perceived benefits and customer cost customer  

satisfaction is the extent to which perceived  performance matches a buyer's expectations  

there are three customer  relationship levels and tools  

basic relationships which are low margin  customers full partnerships which are high  

level customers and frequency marketing  programs which reward customers  

customer engagement marketing makes the brand a  meaningful part of consumers conversations and  

lives by building direct and continuous customer  involvement in shaping brand conversations  

experiences and community engaging customers  social media is a great way to attract customer  

attention this advertisement is an example of the  hertz rent-a-car share it up social media campaign  

consumer generated marketing is when brand  exchanges created by consumers both invited  

and uninvited by which consumers are playing an  increasing role in shaping their brand experiences  

and those of other consumers an example of social  engagement is the life is good campaign it starts  

with a deeply felt engagement worthy sense  of purpose in spreading the power of optimism  

partner relationship management involves working  closely with partners in other company departments  

and outside the company to jointly bring value to  customers creating customer loyalty and retention  

is the value of an entire stream of purchases that  the customer makes over a lifetime of patronage  

capturing customer value the share of a customer  is a portion of the customer's purchasing  

that a company receives in its product  categories building customer equity is  

the total combined customer lifetime  values of all the company's customers  

this figure illustrates how companies can build  the right relationships with the right customers  

there are four customer relationship groups  strangers who are customers with low potential  

profitability butterflies who are potentially  profitable but not loyal true friends who are  

profitable and loyal and barnacles who  are highly loyal but not very profitable  

objective force summary marketing helps to  identify strategies for creating customer value  

for customers and capturing value from customers  in return building customer relationships includes  

customer relationship management engaging  customers and partner relationship management  

capturing value from customers involves creating  customer value and retention growing customer  

shares and building customer equity learning  objective 5 describe the major trends and forces  

that are changing the marketing landscape in this  age of relationships it is all about the changing  

marketing landscape digital and social media  marketing involves using digital marketing tools  

such as websites social media mobile  ads and apps online videos email and  

blogs that engage consumers anywhere  at any time via their digital devices  

social media provides exciting opportunities  to extend customer engagement and get people  

talking about a brand mobile marketing is perhaps  the fastest growing digital marketing platform  

the changing marketing landscape involves  not-for-profit marketing growth rapid  

globalization and competition and sustainable  marketing objective 5 summary dramatic changes  

are occurring in the marketing arena the digital  age has created exciting new ways to learn about  

and relate to customers as a result advances in  digital and social media have taken the marketing  

world by storm online mobile and social media  marketing offer exciting new opportunities to  

target customers more selectively and engage  them more deeply the key is to blend the new  

digital approaches with traditional marketing  to create a smooth integrated marketing strategy  

in summary this chart represents how far  we've come in understanding marketing  

principles in chapter one now that we've  discussed all the steps in the process  

this graph represents an expanded model  that will help you put it all together  

thank you for reviewing this video check out  the other videos in this marketing series