Chap 1 MARKETING: CREATING & CAPTURING CUSTOMER VALUE

Marketing
the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

Managing profitable customer relationships .

Twofold goal of marketing
attract new customers by promising superior value
grow current customers by delivering satisfaction
Nowadays, marketing is not only telling and selling. But, it needs to satisfy customer needs.
aim of marketing
know the needs and wants of a consumer and to create a product that compromises those.
Marketing Process
1. Understand the marketplace and the customer wants and needs
2. Design a customer-driven marketing strategy
3. Construct a marketing program that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer quality
5 core customer and marketplace concepts
NEEDS WANTS DEMANDS
MARKET OFFERINGS
VALUE AND SATISFACTION
EXCHANGE AND RELATIONSHIPS
MARKETING
NEEDS
self deprivation (food, clothes, security, shelter)
WANTS
The form human needs take as shaped by culture and individual personality.
DEMANDS
Human wants that are backed by buying power.
MARKET OFFERINGS
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
VALUE AND SATISFACTION
Key building blocks for developing and managing customer relationships.
EXCHANAGE AND RELATIONSHIPS
Exchange : The act of obtaining a desired object from someone by offering something in return.
MARKETS
The set of all actual and potential buyers of a product or service.
Marketing strategy
Marketing management is the art and science of choosing target markets and building profitable relationship with them.
marketing manager’s aim
find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value.
To win a marketing strategy, the marketer must answer two important questions:
1. What customers will we serve (what’s our target market)?

2. How can we serve these customers best (what’s our value proposition)?

Value proposition
the set of benefits or values a company promise to deliver to consumers to satisfy their needs.
5 concepts of marketing strategies
Production

Product

Selling

Marketing

Societal Marketing

Production concept
consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency.
Product concept
consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements.
Selling concept
consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.
Marketing concept
The marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
Societal marketing concept
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.
Customer relationship management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
key to building lasting customer relationships
create superior customer value and satisfaction.
Customer-perceived value
The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
Customer satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations.
Consumer-generated marketing
Marketing messages, ads, and other brand exchanges created by consumers themselves-both invited and uninvited.
Partner relationship management
Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.
Creating customer loyalty and retention
Customer lifetime value – The value of the entire stream of purchases that the customer would make over a lifetime of patronage.
Growing share of customer
Share of customer – The portion of the customer’s purchasing that a company gets in its product categories.
Building customer equity
The total combined customer lifetime values of all the company’s customers.
Customer Relationship Groups (Short term customers)
Butterflies: good fit between company’s offering & customer needs

Strangers: good fit between company’s offering & customer needs

Customer Relationship Groups (Long term customers)
True friends: good fit between company’s offering & customer needs; highest profit potential

Barnacles: good fit between company’s offering & customer needs

the changing marketing landscape: Trends and forces
4 Major developments:
1. The Digital Age (Internet)
2. Rapid globalization
3. The call for more ethics and social responsibility
4. The growth of not-for-profit marketing