Marketing: Creating and Capturing Customer Value

marketing
managing profitable customer relationships
creating value for customers
satisfying consumers’ needs
goals of marketing
1. Attract new customers by promising superior value
2. Keep an grow current customers by delivering satisfaction
today’s marketing
Today’s marketers want their brands to become a part of your life – for you to LIVE the brand
marketing mix
set of marketing tools that work together to satisfy customer needs and build customer relationships
tools to implement marketing strategy
4 Ps
marketing process
Understand consumers, create value and build relationships to reap rewards of superior customer values
• First FOR, then FROM
5 steps of the consumer process
1. understand market and consumer wants
2. design consumer driven marketing strategy
3. construct integrated marketing program
4. build profitable relationships and create customer satisfaction
5. capture value from customers to create profits
needs
felt states of deprivation
social (belonging and acceptance), physical and individual (knowledge and self expression)
wants
desires bred by society and culture and individual personality
demands
wants backed by buying power
• People demand products that add up to the most value and satisfaction
marketing offerings
combination of products, services, information and experiences offered in a market to consumers
physical products and services
consumer wants and desires
Corporations go to great lengths to learn about their customers’ wants and desires
marketing myopia
mistake of marketers when they pay more attention to the physical product rather than the benefits and experiences that if offers to customers (which is what the customers really value)
key to marketing
focus on brand experiences rather than the brand itself
setting expectations
• Important for marketers to set the right level of expectations
o Too high – leave people unsatisfied
o Too low – not enough buyers
tangible goals of marketing
o Exchange: obtaining desired object by offering something in return
o Not limited to money – can be support, votes, physical items, acceptance, etc.
markets
set of all actual and potential buyers of a product or service
carried out by sellers as well as buyers – sellers have to cater to the wants and needs of the customers
marketing management
act of choosing target markets and building profitable relationships with them
value proposition
set of values and benefits that a brand promises to deliver to customers
differentiates one brand from another
market segmentation
best cater to the needs of that one particular market segment
concepts to manage the market (5)
1. production concept
2. product concept
3. selling concept
4. marketing concept
5. societal marketing concept
production concept
consumers will favor products that are available and highly affordable –> focus on improving production and distribution efficiency
con: marketing myopia
product concept
customers value quality, performance and innovation –> focus on making continuous product improvements
con: marketing myopia
selling concept
consumers won’t buy enough products unless it is aggressively marketed
con: focus on sale rather than customer relationship
marketing concept
knowing the needs and wants of target markets and delivering desired satisfactions better than competitors do
customer driving marketing
understanding customer needs even better than customers themselves and creating products and services that meet both existing and future needs
societal marketing concept
company’s marketing strategies should deliver value to customers in a way that maintains and improves both consumer and society’s well being
Marketing 3.0
shared value marketing
economic but also social concerns
4 Ps
product
price
place
promotion
customer relationship management
overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
benefits: satisfied customers are loyal customers
customer action
Customers act on the perceived value and benefits that a product could offer them
customer perceived value
customer’s evaluation of the difference between all the benefits and costs of a marketing offer relative to competing offers
customer satisfaction
extent to which a product’s perceived performance matches a buyer’s expectations
importance: customer satisfaction leads to customer loyalty and better company performance
customer relationships
Companies market and promise only what they can deliver and then try to deliver over and beyond what they originally promised to get high levels of customer satisfaction
goals of customer management
achieve the perfect balance that gives the customer satisfaction but generates profits
customer relationship levels
1. full partnerships (corporations working together to bring benefits to consumers)
2. frequency marketing programs (ex. rewards cards)
3. club marketing programs (Apple membership clubs)
rise of digital age
marketing is now all about engagement with consumers
customer engagement marketing
making the brand a meaningful part of consumers’ conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences and community
consequence of customer marketing engagement marketing
Empowers, connects and better informs consumers
customer managed relationships
customers connect with companies and each other to forge their own brand experiences
power of digital and social media
engage customers and boost sales
consumer generated marketing
consumers themselves play a big role in shaping their own brand experience
ex. blogs, video sharing sites, social media
invited and uninvited
ex. consumer made commercials
significance of consumer generated marketing
with the boom in digital technology, consumer generated marketing will become an increasingly important market force
con: expensive and time consuming
partner relationship management
working closely with partners inside and outside of the firm to jointly bring greater value to customers
customer lifetime value
value of the entire stream of purchases a customer makes over a lifetime of patronage
customer delight
builds emotional relationship with the brand
share of customer
portion of the customer’s purchasing that the company gets in its product categories
constant goal to increase this
value of company
value of current and future customers
customer equity
total combined customer lifetime values of all the company’s customers
may be more accurate measure of firm’s performance than current sales or market share
customers
assets that need to managed and maximized
customer relationship groups
1. strangers
2. butterflies
3. true friends
4. barnacles
strangers
customer relationship group
low potential profitability and loyalty
butterflies
customer relationship group
potentially profitable but not loyal
ex. stock market investors
true friends
customer relationship group
loyal and profitable – strong fit between company’s offering and customer needs
true believers: people who come back regularly and tell others about their good experiences with the company
barnacles
customer relationship group
highly loyal but not profitable
ex. small bank customers that don’t generate returns
changing marketing landscape
digital age – people attached to phones and social media and being online
marketers need to engage them online
digital and social media marketing
using digital marketing tools such as web sites, social media, mobile apps and ads, online video, email and blogs that engage customers anywhere, at any time via their digital devices
mobile media marketing
cell phones
economic concerns of consumers
• Marketers have to emphasize the value of their product in their value propositions
• Not necessarily lower the price but emphasize the value-for-money, practicality and durability of their product offerings
not-for-profit marketing
non-profit orgs also use marketing
rapid globalization
international competitors and marketing methods
sustainable marketing
corporate ethics and social responsibility
caring capitalism
companies set themselves apart by maintaining the idea that they are civic minded and responsible