Marketing Managing Profitable Customer Relationships Chapter 1 1
Marketing: Managing Profitable Customer Relationships Chapter 1 1
Learning Goals 1. Define marketing and the marketing process. 2. Explain the importance of understanding customers and identify the five core marketplace concepts 3. Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. 4. Discuss customer relationship management
What is Marketing? • Marketing Defined: “The process by which companies create value for the customers and build strong customer relationships in order to capture value from customers in return” • Marketing is about managing profitable customer relationships • The two fold goal of marketing is • Attracting new customers • Retaining and growing current customers Goal 1: Define marketing and the marketing process.
The Marketing Process Create value for customers and build customer relationships Understand the marketplace and customer needs and wants Design a Customerdriven marketing strategy Construct a marketing program that delivers superior value Capture value from customers in return Build profitable relationships and create customer delight Capture value from customers to create profits and customer quality Goal 1: Define marketing and the marketing process.
Understanding the Marketplace and customer needs Needs, wants, and demands • Need • State of felt deprivation • Example: Need food • Wants • The form needs as shaped by culture and the individual • Example: Want a Big Mac • Demands • Wants which are backed by buying power
Understanding the Marketplace and customer needs • Marketing offers: • • • Products Services Events Experiences Persons Places Ideas Organizations Information
Understanding the Marketplace and customer needs • Value and satisfaction • Value • Customer-perceived value • Customer’s evaluation of the difference between all the benefits and all the cost of a market offering relative to those of competing products. • Customers form expectations regarding value • Marketers must deliver value to consumers • Satisfaction • Customer satisfaction • The extent to which a product’s perceived performance matches a buyer’s expectations • A satisfied customer will buy again and tell others about their good experience
Understanding the Marketplace and customer needs • Exchange, transactions and relationships • Exchange • The act of obtaining a desired object from someone by offering something in return • One exchange is not the goal, relationships with several exchanges are the goal • Relationships are built through delivering value and satisfaction • Markets • Market • Set of actual and potential buyers of a product • Marketers seek buyers that are profitable
Marketing Management • Marketing management is the art and science of choosing target markets and building profitable relationships with them. • This definition must include answers to two questions: • What customers will we serve? • How can we serve these customers best? Goal 3: Identify elements of a customer-driven strategy.
Marketing Management • Selecting customers to serve • Dividing the market into segments of customers- Market segmentation • Selecting which segments it will go after. Target marketing • Demarketing • Value proposition • Set of benefits or values it promises to deliver to customers to satisfy their needs.
Value Proposition i. Phone Nokia
Marketing Management Orientations • Production concept • Product concept • Selling concept • Marketing concept □ Societal marketing concept Goal 3: Identify elements of a customer-driven strategy.
The Production Concept • Assumes that consumers are interested primarily in product availability at low prices • Marketing objectives: • Cheap, efficient production • Intensive distribution • Market expansion
The Product Concept • Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features • Marketing objectives: • Quality improvement • Addition of features
The Selling Concept • Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so • Marketing objectives: • Sell, sell • Lack of concern for customer needs and satisfaction
The Marketing Concept • Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition • Marketing objectives: • Profits through customer satisfaction
Societal Marketing Concept • Assumes that marketing strategy should deliver value to customers in a way that maintain and improves both the consumer’s and society’s well-being Society (Human Welfare) Consumers (Want Satisfaction) Societal Marketing Concept Company (Profits)
Marketing Myopia § A focus on the existing product only rather than the consumer needs it presumes to satisfy § Management’s failure to recognize the scope of the business § Product-oriented rather than customer-oriented management endangers future growth
The Marketing Plan • Transforms the marketing strategy into action • Includes the marketing mix -The 4 P’s of marketing • • Product Price Place Promotion Goal 3: Identify elements of a customer-driven strategy.
Marketing mixes- 4 P’s • Product • Firm must first create a need satisfying market offering • Price • Decide how much it will charge for the offer • Place • Decide how it will make the offer available to target consumers • Promotion • Communicate with target customers about the offer and persuade them of its merit Goal 3: Identify elements of a customer-driven strategy.
Building Customer Relationships • CRM–Customer relationship management • The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers. Goal 4: Discuss CRM
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