- What is marketing?
- Satisfying customer needs.
- The aim of marketing is to make selling unnecessary.
- The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return
- The marketing Process
Understanding the Marketplace and Customer Needs:
- Customer needs, wants, and demands
- Human needs are states of felt deprivation
- Physical needs
- Individual needs
- Wants
- The form human needs take as they are shaped by culture and personality
- Demands
- Wants that are backed by buying power
Marketing offerings - Products, Services, and Experiences
Consumer's needs are fulfilled through market offerings -- a combination of products, services, information, or experiences which are offered to satisfy a want or need.
Market offerings also include persons, places, organizations, information and ideas.
Marketing myopia -- people that are so taken by products that they focus only on existing wants and lose sight of underlying customer needs.
A product is only a tool to solve a consumer problem
Customer Value and Satisfaction
Customers form expectations about the value and satisfaction that they are delivered and buy accordingly
Managers must set the right level of expectations. Not too low cause doesn't attract enough buyers, not too high cause buyers will be disappointed.
Exchanges and Relationships
Exchange -- the act of obtaining a desired object from someone by offering something in return.
Beyond attracting new customers, the goal is to retain customers and grow their business
Markets
Market: the set of all actual and potential buyers of a product or service
Designing a Customer-Driven Marketing Strategy
Marketing management: the art and science of choosing target markets and building profitable relationships with them.
Simply put it is customer management and demand management
Selecting customers to Serve
Divide the market into segments and select which segments it goes after.
The company only wants to select customers that it can serve well and profitably.
Choosing a Value Proposition
Value proposition is the set of benefits or values it promise to deliver to consumers to satisfy their needs.
Marketing Management Orientations
5 alternative concepts under which organizations design and carry out their marketing strategies:
Production Concept: the idea that 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: the idea that 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: The idea that 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.
Preparing an Integrated Marketing Plan and Program
The integrated marketing plan consists of the firm's marketing mix, the set of tools the firm uses to implement its marketing strategy.
Building Customer Relationships:
The first three steps (understanding the marketplace, designing a customer-driven strategy, and constructing marketing programs) all lead up to the fourth and most important step: building profitable customer relationships.
Customer Relationships Management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Relationship Building Blocks: 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. (Gap vs. Old Navy jeans)
Customer satisfaction: the extent to which a product's perceived performance matches a buyer's expectations.
The purpose of marketing is to generate customer value profitably. A company can always increase customer satisfaction by lowering its price or increasing services but this may result in lower profits. Don't give away the house!
Customer relationship levels and tools
Basic relationships: don't get to know the customer's individually, but build brand value, sales promotions, etc.
Full partnerships: use with key customers -- work closely with them
Rewards programs -- gas cards, maverik rewards etc.
The Changing Nature of Customer Relationships
Relating with more carefully selected customers
Selective relationship management: targeting fewer, more profitable, customers.
Relating more deeply and interactively
Partly because of the communications environment, relationships are deeper today
The goal is to get deeper consumer involvement and a sense of community around a brand.
These new communications abilities also give consumers greater power and control.
Consumer-generated marketing: marketing messages, ads, and other brand exchanges created by consumers themselves -- both invited and uninvited.
Partner Relationship Management
Partner relationship Management: working closely with partners in other company departments and outside the company to jointly bring greater value to customers
Partners inside the company
"marketing is far too important to be left to only the marketing department"
Firms are linking all departments in the cause of creating customer value.
Marketing partners outside the firm
Supply chain management
Capturing Value from 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.
You don't want to lose a customer cause you lose an entire customer lifetime value.
Growing Share of Customer
Share of customer: The portion of the customer's purchasing that a company gets in its product categories.
To do this a firm can increase the variety of products or set up a program to cross sell.
Building Customer Equity
What is customer equity?
Customer equity: the total combined customer lifetime values of all of the company's customers.
Building the right relationships with the right customers
Not all customers, not even all loyal customers, are good investments
Butterflies: potentially profitable but not loyal. We can enjoy them for a little while and then they're gone.
True friends: both profitable and loyal. Firm wants to make great efforts to nurture, retain, and grow business with them.
Barnacles: highly loyal but not very profitable. Ex: smaller bank customers who bank regularly but don't generate enough returns to cover the costs of maintaining the accounts.
The Changing Marketing Landscape
The Digital Age
Web videoconferencing, advertising, internet, etc.
Online marketing is now the fastest-growing form of marketing.
Rapid Globalization
Americans compete with Koreans, etc.
Companies aren't only selling more internationally but are buying more internationally also.
The Call for More Ethics and Social Responsibility
Set themselves apart by being civic-minded and responsible. Use mission statements, etc.
The Growth of Not-For-Profit Marketing
So What is Marketing? Pulling it all Together
The most important part of the marketing process is building value-laden, profitable relationships with target customers.
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