Principles Of Marketing Chapter 1 PDF

PRINCIPLES OF MARKETING Chapter 1 MARKETING: CREATING CUSTOMER VALUE AND ENGAGEMENT LECTURER: FARAH HIDA BINTI SHARIN Objectives Outline Identify the Discuss Explain the key elements customer...

PRINCIPLES OF MARKETING Chapter 1 MARKETING: CREATING CUSTOMER VALUE AND ENGAGEMENT LECTURER: FARAH HIDA BINTI SHARIN Objectives Outline Identify the Discuss Explain the key elements customer importance of of a customer relationship Describe the understandin value-driven management major trends Define g the marketing and identify and forces marketing marketplace strategy and strategies for that are and outline and discuss the creating changing the the steps in customers marketing value for marketing the marketing and identify management customers landscape in process. the five core orientations and capturing this age of marketplace that guide value from relationships. concepts. marketing customers in strategy. return.  What Is Marketing?  Marketing is engaging customers and managing profitable customer relationships.  Goals of Marketing ◦Attract new customers by promising superior value ◦Keep and grow current customers by delivering satisfaction  Forms of Marketing Traditional Contemporary Making a sale Satisfying customer needs Abundance of products in Imaginative Web sites and mobile the nearby shopping phone apps, blogs, online videos, centers and social media Television, magazine, and Reach customers directly, direct-mail ads personally, and interactively The Marketing Process: Creating and Capturing Customer Value Understanding the Marketplace and Customer Needs Needs, wants, and demands Market Markets Five core offerings customer and marketpla ce concepts: Exchange Value and s and satisfactio relationsh n ips  Customer Needs, Wants, and Demands Needs Wants States of felt deprivation Form taken by human ◦Physical needs—food, clothing, needs when shaped by warmth, and safety culture and individual ◦Social needs—belonging and personality affection Demands ◦Individual needs—knowledge and self-expression Human wants that are backed by buying power  Market Offerings Products, services, information, or experiences ◦Offered to satisfy a need or want Marketing myopia—paying more attention to the specific products than to the benefits and experiences produced  Customer Value and Satisfaction Customers form expectations about the value and satisfaction of market offerings. ◦Satisfied customers buy again ◦Dissatisfied customers switch to competitors Setting the right level of expectations ◦Low expectations may fail to attract buyers ◦High expectations may disappoint buyers  Exchanges and Relationships Exchange is the act of obtaining a desired object by offering something in return. Marketing consists of creating, maintaining, and growing desirable exchange relationships. ◦Strong relationships are built by consistently delivering superior customer value.  Markets All actual and potential buyers of a product Sellers and Consumers market Customer-managed relationships A Modern Marketing System  Designing a Customer Value-Driven Marketing Strategy (1 of 4) Customer value-driven marketing strategy ◦Once a company fully understands its consumers and the marketplace, it must decide which customers it will serve and how it will bring them value.” Marketing management: Choosing target markets and building profitable relationships Designing a winning marketing strategy ◦Target market? ◦Value proposition?  Designing a Customer Value-Driven Marketing Strategy (2 of 4) Selecting customers to serve Market segmentation refers to dividing the markets into segments of customers. Target marketing refers to which segments to go after.  Designing a Customer Value-Driven Marketing Strategy (3 of 4) Choosing a value proposition —the company must decide how it will differentiate and position itself in the marketplace.  Designing a Customer Value-Driven Marketing Strategy (4 of 4) Marketing management orientations ◦Production concept ◦Product concept ◦Selling concept ◦Marketing concept ◦Societal marketing concept The Selling and Marketing Concepts Contrasted Three Considerations Underlying the Societal Marketing Concept  Preparing an Integrated Marketing Plan and Program Major marketing mix tools Four Ps of marketing ◦Product ◦Price ◦Place ◦Promotion Marketing mix tools should be blended into a comprehensive integrated marketing program.  Customer Relationship Management Delivering superior customer value and satisfaction to build and maintain profitable customer relationships ◦Customer-perceived value: Customer’s evaluation of a marketing offer relative to those of competing offers ◦Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s expectations  Customer Relationship Levels and Tools (1 of 2) Levels Tools Basic relationships Frequency marketing programs Low-margin Loyalty rewards programs customers Club marketing programs Full partnerships High-margin customers  Customer Relationship Levels and Tools (2 of 2) Relationship marketing tools: The Honors smartphone app.  Customer-Engagement Marketing Customer-engagement marketing makes the brand a meaningful part of consumers’ conversations and lives. Greater consumer empowerment means that companies must practice marketing by attraction. Marketers must find ways to enter consumers’ conversations with engaging and relevant brand messages.  Consumer-Generated Marketing  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 ◦Consumers invited by companies ◦New product and service ideas ◦Active role in shaping ads  Partner Relationship Management Working closely with partners both inside and outside the company to jointly bring more value to customers ◦ Partners inside the firm—cross-functional teams ◦ Partners outside the firm—suppliers, channel partners  Creating Customer Loyalty and Retention Keeping customers loyal makes good economic sense. Customer lifetime value is the value of the entire stream of purchases a customer makes over a lifetime of patronage. Customer defections can be costly ◦Can lose that customer’s lifetime value ◦May cause other customers to defect  Growing Share of Customer Portion of the customer’s purchasing in their product categories Share of Customer is increased by: ◦Good customer relationship management ◦Offering greater variety to current customers ◦Creating programs to cross-sell and up-sell to existing customers  Building Customer Equity (1 of 2)  Total combined customer lifetime values of all of the company’s customers  Measures the future value of the company’s customer base  Increases when the loyalty of the firm’s profitable customers increases  Better measure of a firm’s performance than current sales or market share  Customer Equity (2 of 2) Cadillac: Managing Customer Equity Customer Relationship Groups The Changing Marketing Landscape Changing Growth of Rapid Sustainabl Digital Economic Not-for- Globalizati e Age Environm Profit on Marketing ent Marketing  The Digital Age: Online, Mobile, and Social Media Marketing (1 of 2) 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 Blending the new digital approaches with traditional marketing creates a smoothly integrated marketing strategy and mix.  Social Media Marketing (2 of 2) 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 engagement. ◦Facebook, Twitter, Snapchat, and smaller more focused sites.  Big Data and Artificial Intelligence (AI) Marketers can now amass mountains of data Brands can use big data to: ◦gain deep customer insights, ◦personalize marketing offers, ◦and improve customer engagements and service.  Growth of Not-for-Profit Marketing Sound marketing can help not-for-profits attract membership, funds, and support.  Rapid Globalization and Sustainable Marketing Managers around the world are taking both local and global views of the company’s: ◦Industry ◦Competitors ◦Opportunities Corporate ethics and social responsibility have become important for every business. An Expanded Model of the Marketing Process