Chapter One: Creating and Capturing Customer Value PDF

Chapter One CREATING AND CAPTURING CUSTOMER VALUE Creating and Capturing Customer Value Topic Outline ► Define marketing and outline the steps in the marketing process ► Understand the Marketplace and Customer Needs ► Designing a Cust...

Chapter One CREATING AND CAPTURING CUSTOMER VALUE Creating and Capturing Customer Value Topic Outline ► Define marketing and outline the steps in the marketing process ► Understand the Marketplace and Customer Needs ► Designing a Customer-Driven Marketing Strategy ► Preparing an Integrated Marketing Plan and Program ► Building Customer Relationships ► Capturing Value from Customers ► The New Marketing Landscape  Marketing is engaging customers and managing profitable customer relationships. The twofold goal of marketing : ► To attract new customers by promising superior value and ► To keep and grow current customers by delivering satisfaction  Marketing is engaging customers and managing profitable customer relationships. The twofold goal of marketing : ► To attract new customers by promising superior value and ► To keep and grow current customers by delivering satisfaction MARKETING DEFINITION Social Definition Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others AMA Definition Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.  Kotler Definition MARKETING DEFINITION Marketing Management is the Art and Science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.  Marketing is an ever changing process and it is evolving with time and customer MARKETING DEFINITION demand. The Marketing Process  Understanding the Marketplace and Customer Needs CORE MARKETING Needs, Wants and Demands CONCEPTS States of deprivation Needs – Basic Human Physical—food, clothing, warmth, safety Requirements Social—belonging and affection Individual—knowledge and self-expression Wants – Directed at Form that needs take as they are shaped by specific objects culture and individual personality Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Demands Wants backed by buying power Purpose: Transportation to Office Need: Public Transport Want: Mercedes Benz Demand: An UBER ride Examples  Offering and Brand ► Offering is companies way of addressing customer needs by putting fourth a value proposition, set of benefits that satisfy those needs. ► Brand is an offering from a known source. Products Services Experience Information Events IDEA Person Place Marketing Myopia ► The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. ► https://hbr.org/video/3590615227001/the-explainer-marketing-myo pia Marketing Myopia Value and Satisfaction Exchange and Relationships Markets A market is the set of actual and potential buyers of a product or service. (demographic, economic, natural, technological, political, and social/cultural) Activity 1: Can you find a thing which can not be marketed? Explain your answer with an example. Designing a Customer-Driven Marketing Strategy Is Marketing Art or Science? What do you think? Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve Market Segmentation and Market Targeting Dividing the market into segments of customers and selecting which segments it will go after Marketing management is customer management and demand management Segmentation Designing a Customer-Driven Marketing Strategy Choosing a Value Proposition Positioning Differentiation Value Proposition Value proposition is the full mix of benefits on which a brand is differentiated and positioned. Value proposition answers the question Why should the customer buy our brand rather than a competitor’s? Value proposition of Domino’s Pizza “a good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price.” Designing a Customer-Driven Marketing Strategy Marketing Management Orientations ► What philosophy should guide marketing strategies? ► What weight should be given to the interests of -customers -the organization -society ► There are five alternative concepts to design and carry out marketing strategies. Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Societal Production Product Selling Marketing concept concept concept concept Marketing concept Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Production Concept Production concept is the idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency. Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Production Concept This orientation is useful- In developing countries when consumers are more interested in obtaining the product than they are in specific features In other situations in which the main objective is to expand the market But can lead to marketing myopia  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Product Concept Product concept is the idea that consumers will favor products that offer the highest quality, the best performance, and the most features.  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Product Concept Organization should therefore devote its energy to making continuous product improvements: - improve the quality of its product - add new features that are technically feasible ► Often leads to marketing myopia Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Selling Concept Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. ► Typically practiced with unsought goods, such as life insurance, encyclopedias ► Practiced by firms with overcapacity ► Fails to consider customer satisfaction  The Selling Concept Starting Point Focus Means End PROFITS EXISTING SELLING & THROUGH FACTORY PRODUCT PROMOTION SALES VOLUME Inside-out Concept Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Marketing Concept A philosophy in which achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do. The job is not to find the right customers for your product but the right products for your customers. The firm’s primary focus is consumer needs and wants.  The Marketing Concept Starting Point Focus Means End PROFITS INTEGRATE THROUGH CUSTOMER MARKET D CUSTOMER NEEDS MARKEING SATISFACTIO N Outside-in Concept Differences between Marketing and Selling Marketing Selling ► Starts with consumers ► Starts with manufacturers or marketers ► Customer-driven ► Producer-driven ► Process of identifying customer needs, ► Act of persuading or influencing a translating them into products and customer to buy a product or service services, creating demand, satisfying the customer, and create value ► Short-term focus ► Long-term focus Source : edX Author: Professor Ashis Mishra  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations The Societal Marketing Concept The idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests. https://www.youtube.com/watch?v=tmZi-w95xk8 Designing a Customer-Driven Marketing Strategy Activity 2: Relate marketing management concepts with the following products and provide reasons for your choice.