Marketing profitable customer relationships
Creating and Capturing Customer
Value Marketing: Managing profitable customer relationships and to Create value for customers and capture value from customers in return. Example) Capos- customer experience comes first.
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Two Fold Goal
- Attract new customers by promising superior value and
- Keep and grow current customers by delivering satisfaction.
Five-Step Model of the Marketing Process
- Build value from customers to create profits and customer equity.
- Build profitable relationships and create customer delight.
- Construct an integrated marketing program that delivers superior value.
- Design a customer driven marketing strategy.
- Understand the marketplace & customer needs & wants.
The first 4 steps: companies work to understand consumers, create customer value, & build strong customer relationships. Final step: companies reap the rewards of creating superior customer value. (By creating value for consumers, in turn capture value from consumers in the form of sales, profits, & long term customer equity. )
Five Core Customer and Marketplace Concepts
- Customer Needs- states of felt deprivation. Physical needs (food, clothing, warmth, safety); Social needs (for belonging and affection); Individual needs (for knowledge & self-expression).
- Customer Wants- The form human needs take as they are shaped by culture and individual personality. Example: An American needs food but wants a Big Mac.
- Customer Demands- Human wants that are backed by buying power.
Some combination of products, services, information, or experience offered to a market to satisfy a need or want. Examples: banking, airline, hotel, tax preparation, home repair services. - Not limited to Just physical products, also include services-activities or benefits. - Also include other entities, persons, place, organizations, information, & ideas.
Marketing Myopia: the mistake of paying more attention to the specific products a company offers than the benefits and experiences produced by these products. They re so taken away with their products that they focus only on existing wants & lose sight of underlying customer needs.
Customer Value and Satisfaction
Key building blocks for developing and managing customer relationships. Satisfied customers buy again & tell others about their good experience and vice versa.
Exchanges and Relationships
The act of obtaining a desired object from someone Chapter 1 Notes: Principles of Marketing By lavatories market offering. Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or there object. Retain customers & grow business.
The set of all actual and potential buyers of a product or service. These buyers share a particular need/want that can be satisfied through exchange relationships.
Designing a Customer-Driven Marketing Strategy
Marketing Management: the art and science of choosing target markets and building profitable relationships with them. Marketing manager's aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value. (Page 8).
Selecting Customers to Serve
Company first decides whom it will serve. Does this by dividing market into segments of customers (market segmentation) and selecting with segments it will go after (target marketing). Company wants to select ONLY customers that it can serve well and profitably. Choosing a Value Proposition: decide how it will serve targeted customers. How it will differentiate and position itself in the marketplace.
A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
- Marketing Management Orientations: easing strategies that will build profitable relationships with target consumers. 5 alternative concepts under which organizations design & carry out their marketing strategies. 1
- The Production Concept: the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency.
- The Product Concept: the idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements. Can lead to marketing myopia).
- The Selling Concept: the idea that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort. Typically practiced with unsought goods- those that buyers do not normally think of buying. (Insurance or blood donations).
- The Marketing Concept: A philosophy that holds that achieving organizational goals depend on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Customer focus and value are the paths to sales/profits; concept is a customer- entered "sense and respond" philosophy.
- The Societal Marketing Concept: the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society long-run interests. Marketing strategy that delivers value to customers in a way that maintains or improves both the consumer's and society well-being. Sustainable Marketing, socially & environmentally responsible marketing that meets present needs of consumers & businesses & also preserving or enhancing the ability of future generations to meet their needs. "green images").
- Preparing and Integrated Marketing Plan and Program: (Page 12) -Program builds customer relationships by transforming the marketing strategy into action. Consists of the firm's marketing mix, the set of marketing tools the firm uses to implement its marketing strategy and classified into four broad groups (4 AS).
The Four AS
Product - to deliver in its value proposition, firm must first create a need-satisfying Place- how it will make the offering available to target consumers. Promotion- communicate with target customers about the offering and persuade them if its merits. Just blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.
Building Customer Relationships
Customer relationship management: the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. All aspects of acquiring, keeping, and growing customers.
Customer Value (customer-perceived value)
the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of omitting offers. Customer Satisfaction: the extent to which a product's perceived performance matches a buyer's expectations. Basic relationships or full partnerships.
frequency marketing programs or club marketing programs are examples.
Customer Managed Relationships
marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationships with brands. - Consumer Generated Marketing: Brand exchanges created by consumers themselves- both invited and invited by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.
Partner Relationships Management
Working closely with partners in other company departments and outside the company to Jointly bring greater value to customers. Partners Inside the Company: firms are linking all departments in the cause of creating customer value. Firming cross-functional customer teams. "Marketing is far too important to be left only to the marketing department". Marketing Partners Outside the Firm: companies today are networked companies, relying heavily on partnership with other firms.
Through supply chain management, companies today are strengthening their connections with partners all along the supply chain.
Capturing Value from Customers
By creating superior customer value, firms create highly satisfied customers who stay loyal and buy more. - Creating Customer Loyalty ; Retention: Customer Lifetime Value: the value of the entire stream of purchases that the customer would make over a lifetime of patronage. - Growing Share of Customer: Share of Customer: the portion of the customer's purchasing that a company gets in it product categories.
Firms can offer greater variety to current customers or create programs to cross-sell & up-sell to market more products/services.
Example: Amazon. - Building Customer Equity: customers. It's a measure of the future value of the company's customer base. (Must build the right relationship with the right customer). The Digital Age: (Page 26-27) - Internet: A vast public web of computer networks that connects users of all types all around the world to each other and to an amazingly large information repository. Online marketing is now the fastest growing form of marketing and technology is providing new opportunities for marketers.
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Basic Principles of Marketing. (2018, May 28). Retrieved from https://phdessay.com/principles-of-marketing-6/