Marketing: Managing Profitable Customer Relationships PDF

Marketing: Managing Profitable Customer Relationships  Learning Objectives After studying this chapter, you should be able to: 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers and the...

Marketing: Managing Profitable Customer Relationships  Learning Objectives After studying this chapter, you should be able to: 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts 3. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy 4. Discuss customer relationship management, and identify strategies for creating value for customers and capturing value from customers in return 5. Describe the major trends and forces that are changing the marketing landscape in this age of relationships What Is Marketing? Social marketing Sport marketing Direct marketing Green marketing Tourism marketing Relationship marketing Niche marketing Internet marketing Viral marketing Guerilla marketing E-mail marketing Industrial marketing What Is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return  Marketing is…. Part of the organizational strategy strategy Realizing the company’s objectives through marketing  Offering the RIGHT PRODUCTS operations  To TARGET segment  For ACCEPTABLE PRICE  Based upon customer VALUE  Which will result with PROFIT  What is Market? https://www.youtube.com/watch?v=obel7Iu1hik The MKT Process The Marketing Process  Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Needs are states of deprivation – Physical—food, clothing, warmth, safety – Social—belonging and affection – Individual—knowledge and self-expression Wants are the form that needs take as they are shaped by culture and individual personality Demands are wants backed by buying power Maslow’s hierarchy of needs  Understanding the Marketplace and Customer Needs Market Offerings—Product, Services, and Experiences Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want Marketing Experience Ex. Angry Birds  Understanding the Marketplace and Customer Needs Market Offerings—Products, Services, and Experiences Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs  Understanding the Marketplace and Customer Needs Customer Value and Satisfaction Expectations – Customers Value and satisfaction – Marketers Set the right level of expectations – Not too high or low  Understanding the Marketplace and Customer Needs Exchanges and Relationships Exchange is the act of obtaining a desired object from someone by offering something in return Marketers want to build and maintain strong relationships by consistently delivering superior customer value  Understanding the Marketplace and Customer Needs Markets are the set of actual and potential buyers of a product Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system affected by major environmental forces – Demographic – Economic Technological – Physical Political– legal Socio- Understanding the Marketplace and Customer Needs Elements of a Marketing System  ВРЕДНОСТ за корисникот Вредноста што ја добиваме од користење на производ и трошокот за негово користење е… Позитивн Вредност за Негативна а корисникот Перцепирани Перцепирани бенефити “жртви” Корист од производот Потрошени пари Корист од услугата Потрошено време Задоволство од Енергија релацијата Психолошки напор Корист од имиџот  Designing a Customer-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? – How can we best serve these customers?  Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it. Designing a Customer-Driven Marketing Strategy Choosing a Value Proposition The value proposition is the set of benefits or values a company 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?” Companies must design strong value propositions that give them the greatest advantage in their target markets.  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal concept  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept – Consumers will favor products that are available and highly affordable. – management focuses on improving production and distribution efficiency  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Product concept Consumers favor products that offer the most quality, performance, and features. The focus is on continuous product improvements  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Selling concept Consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling and promotion effort.  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do  Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Societal concept The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Designing a Customer-Driven Marketing Strategy Marketing Management Orientations -The customer-driven marketing strategy outlines which customers the company will serve (the target market) and how it will serve them (the value proposition). -the company develops marketing plans and programs— a marketing mix—that will actually deliver the intended customer value.  Preparing an Integrated Marketing Plan and Program Marketing Mix The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy Product Price Promotion Place  Preparing an Integrated Marketing Plan and Program Integrated Marketing Program Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers Building Customer Relationships Customer Relationship Management (CRM) The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction  Building Customer Relationships Customer Relationship Management (CRM) Relationship Building Blocks: Customer Value and Satisfaction Customer perceived value is the difference between total customer value and total customer cost Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations  Building Customer Relationships Customer Relationship Management (CRM) Customer Relationship Levels and Tools Basic relationship Full partnerships Frequency marketing programs Club marketing programs  Building Customer Relationships The Changing Nature of Customer Relationships Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers Relating for the long-term to retain current customers and build profitable, long-term relationships Relating directly uses direct marketing tools (telephone, mail-order, kiosks, Internet) to make direct connections with customers  Building Customer Relationships Partner Relationship Management Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers  Building Customer Relationships Partner Relationship Management Partners inside the company is every function area interacting with customers – Electronically – Cross-functional teams Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships  Building Customer Relationships Partner Relationship Management Supply chain is a channel that stretches from raw materials to components to final products to final buyers Supply management Strategic partners Strategic alliances  Capturing Value from Customers Creating Customer Loyalty and Retention Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage  Capturing Value from Customers Growing Share of Customer Share of customer is the portion of the customer’s purchasing that a company gets in its product categories  Capturing Value from Customers Building Customer Equity Customer equity is the total combined customer lifetime values of all of the company’s customers  Capturing Value from Customers Building Customer Equity Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized Different types of customers require different relationship management strategies – Build the right relationship with the right customers Capturing Value from Customers Customer Relationship Groups  What is the key to successful MKT? Loyal customers – Are loyal longer – Buy more (new products & upgrades), more profit – Spread favorable word-of-mouth – Are more brand loyal (less price sensitive) – Offer feedback – Reduce transaction costs Marketing: Creating Customer Value and Engagement Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Building Customer Relationships - Customer Relationship Management - Engaging Customers - Partner Relationship Management 1-43  The New Marketing Landscape Major Developments Digital age Rapid globalization Ethics and social responsibility Not-for-profit marketing  The New Marketing Landscape The New Digital Age Internet creates marketplaces and marketspaces – Information – Entertainment – Communication  The New Marketing Landscape Rapid Globalization The world is smaller Think globally, act locally  The New Marketing Landscape The Call for More Ethics and Social Responsibility Marketers are being called upon to take greater responsibility for the social and environmental impact of their actions in a global economy  The New Marketing Landscape The Growth for Not-for-Profit Marketing Colleges Hospitals Museums Zoos Orchestras Religious groups So, What Is Marketing? Pulling It All Together 1-49  Review Questions 1. Define and outline steps in the marketing process 2. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts 3. Identify the key elements of a customer-driven marketing strategy and discuss marketing management orientations that guide marketing strategy 4. Discuss customer relationship management, and identify strategies for creating value for customers and capturing value from customers in return 5. Describe the major trends and forces that are changing the marketing landscape in this new age of relationships