Chapter 1 Marketing In Changing World Creating Customer Value And Engagement PDF

Chapter 1 Marketing in Changing World Creating...

Chapter 1 Marketing in Changing World Creating Customer Value and Engagement 1.1Define marketing Learning Objectives 1.2The steps in the marketing process. Chapter 1 1.2.1 Explain the importance of understanding the marketplace and customers and identify the Marketing in Changing five core marketplace concepts. World: Creating 1.2.2 The marketing management orientations Customer Value and that guide marketing strategy. Engagement 1.3Changing the marketing landscape in this age of relationships and Marketing Challenges in This New Millennium CLO1:Explain the principles of marketing and its functions within a business organization 1 2 4/4/2022 4 What Is Marketing? LO1 Marketing is a process by which companies create value for customers and build strong customer relationships in order to Define marketing capture value from customers in return. The twofold goal of marketing is to: attract new customers by promising superior value grow current customers by delivering satisfaction 3 3 4 1  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement LO2 What Is Marketing? Outline the steps in the marketing process, five core marketplace concepts and marketing management orientations. Marketing is all around you, in good old traditional forms and in a host of new forms, from websites and mobile apps to online videos and social media. 5 6 5 6 4/4/2022 7 4/4/2022 8 Figure 1.1 The Marketing Process: Creating and Steps in Marketing Process Capturing Customer Value 3. Construct an 1. Understand the 2. Design a integrated marketing marketplace and customer customer value-driven program that delivers needs and wants. marketing strategy. superior value. 4. Engage 5. Capture value customers, build from customers to create profitable relationships, profits and customer and create customer equity. delight. 7 8 2  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Understanding the Marketplace and Customer Needs Five Core Customer and Marketplace Concepts Five core customer and marketplace concepts: 1) Needs, Wants, and Demands needs, wants, and demands; ▪ Needs are states of felt deprivation. They include physical, social, and individual needs. market offerings (products, services, and experiences); ▪ Wants are the form human needs take as they are shaped by culture and individual personality. value and satisfaction; ▪ Demands are human wants that are backed by buying power. exchanges and relationships; Staying close to customers: Airbnb’s CEO Brian Chesky and co-founder Joe Gebbia regularly stay at the markets. company’s host locations, helping them shape new customer solutions based on real user experiences. 9 10 4/4/2022 11 Five Core Customer and Marketplace Concepts Five Core Customer and Marketplace Concepts 2) Market Offerings (Products, 3. Value and Satisfaction Services, And Experiences ▪ Marketing occurs when people decide to satisfy their needs and wants through exchange relationships. Market offerings are some combination of products, ▪ Customers form expectations about the value and satisfaction of market services, information, or experiences offered to a offerings. market to satisfy a need or want. Satisfied customers buy again Marketing myopia—occurs when a company pays Dissatisfied customers switch to competitors more attention to the specific products than to the benefits and experiences produced by these products. Customer value and customer satisfaction are key building blocks for developing More than just selling products, Apple’s highly successful and managing customer relationships. retail stores create engaging life-feels-good brand experiences. 11 12 3  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Five Core Customer and Marketplace Concepts Five Core Customer and Marketplace Concepts 4. Exchanges And Relationships 5) Market ▪ A market is the set of actual and potential buyers. ▪ Consumers market when they: ▪ Exchange is the act of obtaining a desired object from someone by offering something in return. search for products interact with companies to obtain information ▪ Marketing actions try to create, maintain, and grow desirable exchange relationships. make purchases ▪ Consumers engage in marketing when they search for products, interact with companies to obtain information, and make their purchases. 13 14 Designing a Customer Value-Driven Designing a Customer Value-Driven Marketing Strategy Marketing Strategy ❑ Marketing management is the art and science of choosing target markets and building profitable relationships with them. ❑ A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. ❑ The marketing manager’s aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer ❑ Value propositions differentiate one brand from another. value. ❑ A winning marketing strategy is when marketing manager answering these two questions: What customers will we serve (target market)? Value propositions: Sonos positions its How can we best serve these customers (value proposition)? Sonos One with Amazon Alexa as “The smart speaker for music lovers.” It gives you all the advantages of Alexa but with high-quality Sonos sound. 15 16 4  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Designing a Customer Value-Driven Marketing Management Orientations Marketing Strategy ▪ Marketing management wants to design strategies that will build profitable A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. relationships with target consumers. ▪ There are five alternative concepts under which organizations design and carry out Example Value propositions: The Hyatt Regency brand declares that sometimes “It’s their marketing strategies: good not to be home.” Its ads highlight the joys of business travel and staying at a Hyatt Regency hotel. Production concept Product concept Selling concept Marketing concept Societal Marketing concept Courtesy Hyatt Corporation. Photograph ©Richard Schultz-2015. Talent: Dean West. 17 18 Marketing Management Orientations Marketing Management Orientations 1. The Production Concept 2. The Product Concept ▪ The production concept holds that consumers will favour products that are ▪ The product concept holds that consumers favour products that offer the available and highly affordable. most quality, performance, and features. ▪ Marketing strategy focuses on improving production and distribution ▪ The focus is on continuous product improvements. efficiency. ▪ Product quality and improvement are important parts of most marketing ▪ For example: The production concept is still a useful philosophy in some strategies. However, focusing only on the company’s products can also lead to situations. In the highly competitive, price-sensitive Chinese market, both marketing myopia. personal computer maker Lenovo and home appliance maker Haier dominate through low labour costs, high production efficiency, and mass distribution. 4/4/2022 19 4/4/2022 20 19 20 5  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Marketing Management Orientations Marketing Management Orientations 3. The Selling Concept 4. The Marketing Concept ▪ Selling concept holds that consumers will not buy enough of the firm’s ▪ Marketing concept holds that achieving organizational goals depends on products unless the firm undertakes a large-scale selling and promotion effort. knowing the needs and wants of the target markets and delivering the desired ▪ The selling concept is typically practiced with unsought goods—those that satisfactions better than competitors. buyers do not normally think of buying, such as life insurance or blood ▪ Under the marketing concept, customer focus and value are the paths to sales donations. and profits. ▪ Such aggressive selling, however, carries high risks. It focuses on creating sales ▪ Instead of a product-centred make-and-sell philosophy, the marketing concept transactions rather than on building long-term, profitable customer is customer-centred. The job is not to find the right customers for your relationships. product but to find the right products for your customers. 4/4/2022 21 4/4/2022 22 21 22 Marketing Management Orientations Marketing Management Orientations 4. The Societal Marketing Concept Figure 1.3 Selling and Marketing Concepts Contrasted ▪ The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being. ▪ The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Figure 1.4 Three Considerations Underlying the Societal Marketing Concept 23 24 6  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Preparing Integrated Marketing Plan and Engaging Customers and Managing Program Customer Relationships ▪ The company’s marketing strategy outlines which customers it will serve The first three steps in the marketing process and how it will create value for these customers. 1. understanding the marketplace and customer needs ▪ Next, the marketer develops an integrated marketing program that will 2. designing a customer value-driven marketing strategy deliver the intended value to target customers. 3. constructing a marketing program—all lead up to the fourth and most ▪ The marketing program builds customer relationships by transforming the important step: building and managing profitable customer relationships. marketing strategy into action. ▪ The marketing mix is comprised of a set of tools known a the four Ps: Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer ▪ product value and satisfaction. It involves managing detailed information about individual ▪ price customers and carefully managing customer touchpoints to maximize customer ▪ promotion loyalty. ▪ place 25 26 Engaging Customers and Managing Engaging Customers and Managing Customer Relationships Customer Relationships Relationship Building Blocks Customer-Engagement Marketing Customer-perceived value Fosters direct and continuous customer involvement in shaping brand is the customer’s evaluation of the difference between conversations, experiences, and community. all the benefits and all the costs of a market offering Today, companies are using online, mobile, and social media to refine their relative to those of competing offers. targeting and to engage customers more deeply and interactively. Customer satisfaction The extent to which perceived performance matches a buyer’s expectations. Customer satisfaction: Customer service champion L.L.Bean was founded on a philosophy of complete Engaging customers: Rather than using intrusive, hard-sell product pitches, Innocent customer satisfaction. “If you are not 100% satisfied with one of our Drinks interacts with customers in humorous ways, inspiring conversations and products, you may return it within one year of purchase for a refund.” fostering relationships. 27 28 7  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement Engaging Customers and Managing Engaging Customers and Managing Customer Relationships Customer Relationships Consumer-Generated Marketing Customer equity is the total combined Brand exchanges created by consumers customer lifetime values of all of the company’s themselves. customers. Consumers are playing an increasing role It’s a measure of the future value of the in shaping brand experiences. company’s customer base. But increasingly, companies themselves are Marketers should care not just about current inviting consumers to play a more active sales and market share. Customer lifetime value role in shaping products and brand and customer equity are the name of the game. content. Some companies ask consumers for new product and service ideas. Managing customer equity: To increase customer equity, Consumer-generated marketing: “Charmingly Cadillac is making the classic car cool again among low-budget” fanmade Tesla ads drew millions of younger buyers. For example, says GM, “Cadillac will lead online views and sparked interactions among the company to an all-electric future.” dedicated Tesla fans. 29 30 The Changing Marketing Landscape Marketing Challenges in This New Millennium LO3 Digital Age Changing the marketing landscape in this age of relationships and Marketing Challenges in This New Changing Economic Environment Millennium Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing 31 31 32 8  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement The Changing Marketing Landscape The Changing Marketing Landscape a) The digital age: online, mobile and social media marketing a) The digital age: online, mobile and social media marketing Social media provide exciting opportunities to extend customer ▪ The explosive growth in digital technology has fundamentally changed the engagement and get people talking about a brand. way we live—how we communicate, share information, access entertainment, and shop Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience. ▪ We live in the age of the Internet of Things (IoT), where everything is connected to everything else. Big Data and Artificial Intelligence (AI): Brands can use big data generated from websites, social media devices, and IoT to gain ▪ Digital and social media marketing involves using digital marketing tools customer insights, personalize marketing offers, and improve customer such as websites, social media, mobile ads and apps, online videos, email, engagements, and service. and blogs that engage consumers anywhere, at any time, via their digital devices. 33 34 4/4/2022 36 The Changing Marketing Landscape The Changing Marketing Landscape b) The Changing Economic Environment c) The growth of not-for profit marketing ▪ Consumer incomes and spending are on the rise. ▪ Marketing has also become a major part of the ▪ The new consumer spending values emphasize strategies of many not-for-profit organizations, simpler living and more value for the money such as colleges, hospitals, museums, zoos, spend. symphony orchestras, foundations, and even ▪ Marketers are emphasizing the value in their churches. value propositions. They focused on value for money, practicality and durability in their ▪ The nation’s not-for-profits face stiff product offering. competition for support and membership. Sound marketing can help them attract membership, funds, and support. 4/4/2022 35 35 36 9  Chapter 1 Marketing in Changing World Creating Customer Value and Engagement The Changing Marketing Landscape The Changing Marketing Landscape c) The growth of not-for profit marketing d) Rapid Globalization Not-for-profit marketing is growing, as sound marketing can ▪ Redefining their customer relationships, marketers are also taking a fresh help organizations attract membership, funds, and support. look at the ways in which they relate with the broader world around them. ▪ Today, almost every company, large or small, is touched in some way by global competition. ▪ Managers around the world are taking both local and global views of the company: ▪ Industry ▪ Competitors ▪ Opportunities 37 38 So, What Is Marketing? Pulling It All Together The Changing Marketing Landscape e) Sustainable Marketing Figure 1.6 An Expanded Model of the Marketing Process ▪ Marketers are reexamining their relationships with social values and responsibilities and with the very earth that sustains us. ▪ As the worldwide consumerism and environmentalism movements mature, today’s marketers are being called on to develop sustainable marketing. ▪ Corporate ethics and social responsibility have become important for every business. ▪ They seek ways to profit by serving immediate needs and the best long-run interests of their customers and communities. 39 40 10