MKT2202 Chapter 1: Creating Customer Value & Engagement (PDF)

Principles of Marketing MARKETING Creating Customer Value and Engagement Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objectives 1-1 Define marketing and outline the steps in the marketing process. 1-2 Explain the import...

Principles of Marketing MARKETING Creating Customer Value and Engagement Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objectives 1-1 Define marketing and outline the steps in the marketing process. 1-2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. 1-3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 1-4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 1-5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objective 1 Define marketing and outline the steps in the marketing process. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. What is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing is engaging customers and managing profitable customer relationships. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  The Marketing Process 1 2 3 4 5 Understand the Design a customer- Construct a Build profitable Capture value from marketplace and driven marketing marketing plan (4P’s) relationships and customers to create customer wants and strategy that delivers superior create customer profit and customer needs value satisfaction equity Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Marketing occurs when people decide to satisfy needs and wants through exchange relationships. Exchange is the act of obtaining a desired object from someone by offering something in return. Understanding the Marketplace Marketing actions try to create, maintain, and Customer and grow desirable exchange relationships. Needs Companies want to build strong relationships by consistently delivering superior customer value. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Understanding the Marketplace and Customer Needs The concepts of exchange and relationships lead to the concept of a market A market is a set of actual and potential buyers. Consumers market when they: search for products interact with companies to obtain information make purchases Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Needs Needs are states of deprivation Physical—food, clothing, warmth, safety Social—belonging and affection Understanding Individual—knowledge and self- the expression Marketplace and Customer Wants Needs are the form human needs take as they are shaped by culture and individual personality Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Understanding the Marketplace and Customer Needs Consumers’ needs and wants are fulfilled through market offerings (a combination of products, services, information, or experiences offered to a market to satisfy a need or a want) Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia Eg: Kodak film refused to offer digital cameras to customers & insists to sell traditional film cameras. They focus only on existing wants and lose sight of underlying customer needs Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objective 3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value-Driven Marketing Strategy Marketing management is the art and science of choosing target markets and building profitable relationships with them. What customers will we serve (target market)? How can we best serve these customers (value proposition)? Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value-Driven Marketing Strategy A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Value propositions differentiate one brand from another. They answer the customer’s question, “Why should I buy your brand rather than a competitor’s?” Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Designing a Customer Value-Driven Marketing Strategy Production concept Marketing management wants to design strategies that will build profitable relationships with target consumers Societal Product concept concept Marketing There are 5 marketing management Management orientations under which organizations design and carry out their marketing Orientations strategies Marketing Selling concept concept Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value- Driven Marketing Strategy The oldest concepts in business The idea is that consumers will favour products that are available Productio and highly affordable, and that the organisation should therefore n concept focus on improving production and distribution efficiency Eg: Ford, Coca-cola Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value-Driven Marketing Strategy The idea is that consumers will favour products that offer the most quality, performance, and innovative features The organisation should therefore devote its energy to making continuous product improvements. Eg: Apple, Honda Product Focusing only on the company’s products can also lead to marketing myopia - a short-sighted approach to marketing that concept focuses on selling products or services without considering the long-term needs of customers or the broader market environment. Companies suffering from marketing myopia are often so focused on their products or services that they fail to see the bigger picture and miss out on potential growth opportunities Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Product Concept = Continuous Improvement Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value- Driven Marketing Strategy 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. The management focuses on creating sales transactions rather than on building long-term customer relationships. The aim is to sell rather than make what the market needs and wants Can you name any companies/brands that focus on selling concepts? Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value-Driven Marketing Strategy Marketing concept: A philosophy that holds that achieving organisational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Focus on a customer-first approach (customer-centred) Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Marketing Concept Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Designing a Customer Value-Driven Marketing Strategy Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Designing a Customer Value-Driven Marketing Strategy Societal marketing: The 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. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  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. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Societal Marketing What companies/brands can you identify with social marketing? What do these companies/brands do that ties to the societal marketing concept? Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  Marketer develop Integrated The marketing an integrated marketing mix is comprised Construct a marketing programme (known programme—a comprehensive of a set of tools known a marketing plan that as marketing plan) to deliver the plan that communicates and the 4 Ps: product delivers superior intended value to target customers delivers intended value price promotion value place Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value Customer relationship management—The key to building lasting customer relationships is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and give the company a larger share of their business Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value Relationship Building Blocks Customer- Customer perceived value satisfaction The difference The extent to between total which perceived customer performance perceived matches a benefits and buyer’s customer cost expectations Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value Relating More Deeply and Interactively: Two-Way Customer Relationships 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 Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value Relating More Deeply and Interactively: Two-Way Customer Relationships Consumer-Generated Marketing - Consumers are playing a bigger role in shaping their brand experiences and those of others. This might happen through uninvited consumer-to-consumer exchanges in blogs, video- sharing sites, and other digital forums. But increasingly, companies are inviting consumers to play a more active role in shaping products and brand messages Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. https://www.youtube.com/watch?v=luc7KkCFKWY Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value Today’s marketers know that they can’t go it alone and must work closely with a variety of marketing partners. Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value By creating superior customer value, the firm creates highly satisfied customers who stay loyal and buy more. This, in turn, means greater long-run returns for the firm Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Managing Customer Relationships and Capturing Customer Value The ultimate aim of customer relationship management is to produce high customer equity Customer equity is the total combined customer lifetime values of all of the company’s current and potential customers A measure of the future value of the company’s customer base Sales and market share reflect the past, and customer equity suggests the future Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Learning Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.  The Changing Marketing Landscape Digital and social media marketing is constantly evolving – keeping up with the trends is not easy. Digital and social media marketing involves using digital marketing tools such as websites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices. Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. The Changing Marketing Landscape The rise of influencer marketing - Consumers are bombarded with traditional advertising, leading to content fatigue. Influencer content is more relatable by moving beyond product endorsements to embrace storytelling, community building, and long-term partnerships Using video-based content, live streaming, etc - Platforms like TikTok, Instagram Reels, and YouTube Shorts have exploded in popularity, offering brands engaging ways to reach younger audiences and capture attention spans, including interactive elements and enhanced analytics for measuring impact Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. The Changing Marketing Landscape Empower user generated Virtual reality (VR), augmented content (UGC) - Collaborate on reality (AR), chatbot marketing UGC campaigns like # hashtag etc - experiments with branded challenges, product reviews, virtual spaces, AR filters, encourage user-created interactive product remixes or adaptations of demonstrations, etc influencer content, etc AI-Powered Marketing Automation - Artificial intelligence (AI) is increasingly used to automate tasks like content creation, ad targeting, and campaign optimization Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. So, What Is Marketing? Pulling It All Together Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved. Copyright Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.