midterm marketing notes.docx

**Marketing Notes for Midterm** Chapter 1 (page 1-23) Marketing, creations customer value and engagement Marketing : engaging customers and managing profitable customer relationships Goals of marketing : attract new customers by promising superior value , keep and grow current customers by deliv...

**Marketing Notes for Midterm** Chapter 1 (page 1-23) Marketing, creations customer value and engagement Marketing : engaging customers and managing profitable customer relationships Goals of marketing : attract new customers by promising superior value , keep and grow current customers by delivering value and satisfaction Marketing reaches you directly , personally and interactively. In recent years, marketers have assembled new marketing strategies : websites and apps to blog, online videos and social media Full definition of marketing : the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return" Basically, if the marketer engages consumers effectively, understands their needs, develops products that provide superior customer value, and prices, distributes, and promotes them well, their products will sell easily. **5 stages to the marketing process** 1. Understand the marketplace and customer wants and needs 2. Design a customer value-driven marketing strategy 3. Construct an integrated marketing program that delivers superior value 4. Engage customers, build profitable relationships, and create customer delight 5. Capture value from customers to create profits and customer equity 5 core customer and marketplace concepts , **stage 1 of the marketing process** 1. Needs, wants and demands a. Needs : stages of felt deprivation i. Physical needs : food, clothing, warmth and safety ii. Social needs : belonging and affection iii. Individual needs : knowledge and self-expression b. Wants : form taken by human needs when shaped by culture and individual personality c. Demands : when backed by buying power, wants become demands 2. Market offering : products, services, information or experiences offered to satisfy a need or want d. Marketing myopia : sellers paying more attention to the specific products than to the benefits and experiences produced by these products 3. Customer Value and Satisfaction : e. Customers form expectations about the value and satisfaction that market offerings will deliver. iv. Satisfied customers will buy again and tell others v. Dissatisfied customers switch to other competitors and disparage the product to others f. Markets must be careful to set the right level of expectations vi. Low expectations may fail to attract buyers vii. High expectations may disappoint buyers 4. Exchanges and relationships g. Exchange is the act of obtaining a desired object from someone by offering something in return. h. Marketing consists of actions to create, maintain, and grow desirable exchange relationships with target audiences. viii. Strong relationships are built by consistently delivering superior customer value. 5. Markets i. Set of actual and potential buyers of a product or service j. Sellers must search for and engage buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. k. In addition to customer relationship management, today's marketers must also deal effectively with customer-managed relationships. Modern Marketing process Suppliers -- \>Company/Competitors - \> Marketing Intermediaries -\> Final Consumers Designing a customer value-driven marketing strategy and plan **Stage 2 of the marketing process** **Customer value-driven marketing strategy :**Once a company fully understands its consumers and the marketplace, marketing management can design a customer value-driven marketing strategy **Marketing management**: The art and science of choosing target markets and building profitable relationships with them Designing a winning marketing strategy: 2 questions 1. What is our target market? (what customers) 2. What is our value proposition? (how we can best serve them) **Target Market** - Selecting customers to serve - Market segmentation : dividing the markets into segment of customers - Target marketing : selecting which segment to go after (which consumers there company can serve well and profitably) **Value Proposition :** - The company must decide how it will differentiate and position itself in the marketplace aka how to serve customers - A brand's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs in a superior way. - Value propositions answer the customer's question: "Why should I buy your brand rather than a competitor's? **Marketing Management Orientations** Marketing management -\> design strategies that will engage target customers and build profitable relationships with them 5 alternative concepts under which organizations design and carry out their marketing strategies : - Production Concept - Idea that consumers will favour products that are av ailbale and highly affordable, therefore the org should focus on improving production and distribution efficiency - Product Concept - Idea that consumers will favor the products that offer the most in innovation; this marketing strategy focuses on continual product improvements - Selling Concept - Idea that consumers will not buy enough of the firms products unless the firm undertakes a large -scale selling and promotion effort - Focus on sales transactions instead of building long term profitable customer relationships - Starting Point -\> factory - Focus-\> Existing Products - Means-\> selling and promoting - Ends-\> [Profits through sales volume] - Marketing concept - philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired ­satisfactions better than competitors do. - Starting Point -\> market - Focus-\> customer needs - Means-\>integrated marketing - Ends-\> [profits through customer satisfaction] - Societal marketing concept - idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests (sustainable marketing; socially and environmentally responsible marketing) - Companies should balance 3 considerations in setting their marketing strategy : - Company profits - Consumer wants - Society's interests Preparing an integrated marketing plan and program, **stage 3 of the marketing process** - The [integrated marketing program] will deliver the intended value to target customers - Majors Marketing Mix tools (**four P's of marketing)** - **Product** -- create a need-satisfying market offering - **Price** -decide how much they will charge for the offering - **Place** -- decide how it will make the offering available to target consumers - **Promotion** - engage target consumers, communicate about the offering, and persuade consumers of the offer's merits - Marketing mix tools should be blended into a comprehensive integrated marketing program that communicates and delivers the intended value to consumers Managing Customer Relationships (**Stage 4)** and Capturing Customer Value (**Stage 5)** - Engaging customers and managing customer relationships - Customer-Relationship management - Delivering superior customer value and satisfaction to build and maintain profitable customer relationships (acquiring, engaging & gaining) - **Customer-perceived value**: Customer's evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers - **Customer satisfaction: **Extent to which a product's perceived performance matches a buyer's expectations - **Customer delight**: Companies aim to delight customers by promising only what they can deliver and then delivering more than they promise - Customer relationship levels - Companies can build customer relationships at many levels depending on the nature of the target market - Low-margin customer (online ads for example) - Full partnership - High-margin customer (contact with sales rep) - Customer relationship tools - Frequency marketing program - Loyalty rewards programs - Club marketing programs - Customer engagement marketing - Making the brand a meaningful part of consumers' conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community. - Customer-engagement marketing makes the brand a meaningful part of consumers' conversations and lives. - Customer-managed relationships and brand advocacy - The key is to enter target consumers' conversations with engaging and relevant brand messages. - Simply posting a humorous video, creating a social media page, or hosting a blog isn't enough - Consumer-generated marketing - Brand exchanges created by consumers themselves---both invited and uninvited---by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers. - Brand exchanges created by consumers - Consumers play an increasing role in shaping their own brand experiences and those of other consumers - Uninvited and Invited - Consumer to consumer exchanges - Consumer invited by companies - New product and service ideas - Active role in shaping ads and social media content - Create buzz around reintroduction of products - Anticipate potential negative consequences - Partner relationship management - Working closely with others both inside and outside the company to jointly engage and bring more value to customers - Partners inside the firm---cross-functional teams - Partners outside the firm---suppliers, distributors, retailers - Capturing value from customers - Creating customer loyalty and retention (in exchange sales, market share and profits) - Keeping customers loyal makes good economic sense - **Customer lifetime value :** value of the entire stream of purchases a customer makes over a lifetime of patronage - Customer defections can be costly - Can lose that customer lifetime value - a company can lose money on a specific transaction but still benefit greatly from a long-term relationship. - May cause other customers to defect - Growing share of customer - Portion of the customers purchasing that a company gets in its product categories (ex : a resto wanting a bigger "share of tummy") - **Share of customer** is increased by - Great customer relationship management - Offering greater variety to current customers - Creating programs to cross-sell and up-sell to existing customers - Building customer equity - Total combined customer lifetime values of all of the company's current and potential customer - Measures the future value of the company's customer base - Increases when the loyalty of the firm's profitable customers increases - The value of a company comes from the value of its current and future customers. - IE : sales/market share= past ; customer equity= future - Strangers : low potential profitability/ little projected loyalty - Dont invested in them, make money on every transaction - Butterflies : potentially profitable / not loyal - Create satisfying and profitable transactions with them for the short period of time they - True Friends : profitable and loyal - Firm wants to make continuous relationships investments to delight these customers and retain/grow them - Barnacles : highly loyal but not very profitable - Problematic, if not profitability can be found, these customers should be fire T Changing Marketing Landscape - Digital Age - **Digital and social media marketing :** Engaging consumers via their digital devices using digital marketing tools - **Mobile marketing :** Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience - **Social media marketing :** - Online social media provide a digital home for people to connect and share important information and life's moments. - Social media offer an ideal platform for real-time marketing and engagements - Facebook, twitter, Snapchat, etc. - Using social media might involve something as simple as a contest or promotion to garner Facebook Likes, tweets, Instagram "regrams," or YouTube postings - Carefully integrated social media programs - Big data and artificial intelligence - Marketers can now amasse mountains of data - **Big data :** brands can use such big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service. - **Artificial Intelligence (AI) :** Marketers can use AI to analyze data at lightning speed and apply the insights to engage customers in real time and help them through the buying process - Growth of Not-for-profit marketing - Sound marketing can help not-for-profits attract membership, funds, and support. - Rapid Globalization - Managers around the world are taking both local and global views of the company - Eg : McDonald's being worldwide - They must expand as they are facing international competition in their home market - Companies are also sourcing more supplies and components abroad and developing new products for specific markets around the world - Sustainable marketing - Corporate ethics and social responsibility - Opportunity to do well by doing good - Build social and environmental responsibility into their company value and mission statements Chapter 3 Chapter 4 (page 104-132) Chapter 5 Chapter 6