Marketing: Managing Profitable Customer Relationships

Marketing: Managing Profitable Customer Relationships

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 marketplac

e 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 relationshi ps and create customer delight

Capture value from custome rs to create profits and custome r 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 Customers 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 products perceived performance matches a buyers 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 afterTarget marketing Demarketing Value proposition Set of benefits or values it promises to deliver to customers to satisfy their needs. Value Proposition iPhone

Nokia Nokia Marketing Management Orientations Production concept Product concept Goal 3: Selling concept Marketing concept

Societal marketing concept 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, 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 consumers and societys 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 Managements 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 4Ps of marketing Product Price Place Promotion Goal 3:

Identify elements of a customer-driven strategy. Marketing mixes- 4Ps 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 CRMCustomer 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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