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Marketing & Sales SummaryChapter 1 Creating customer value and engagement .
Marketing is the process by which companies engage costumers, build stronger, build
stronger customer relationships, and create customer value in order to capture value from
customers in return. The twofold goal of marketing is to attract new customers by promising
superior value and to keep and grow current customers by delivering satisfaction.
The marketing process:
This presents a simple, five step model of the marketing process for creating and capturing
customer value. In the first four steps, companies work to understand consumers, create
customer value, and build strong customer relationships. In the final step, companies reap
the rewards of creating superior customer value.
As a first step, marketers need to understand customer needs and wants and the
marketplace in which they operate. There are five core customer and marketplace concepts:
1. Customer needs, wants and demands;
Needs: States of felt deprivation, they include basic physical needs for food, clothing,
safety and warmth; social needs for belonging and affection; and individual needs for
knowledge and self-expression.
Wants: The form humans take as they are shaped by culture and individual
personality.
Demands: Human wants that are backed up by buying power
2. Market offerings (products, services and experiences)
Marketofferings
Some combination of products, services, information, or experiences offered to a
market to satisfy a need or a want. §
Marketingmyopia The mistake of paying more
attention to the specific products they offer than 3333£to the benefits and
experiences produced by these products.
3. Value and satisfaction
4. Exchanges and relationships
Exchange is the act of obtaining a desired object from someone by offering
something in return.
, 5. Markets
A market is the set of actual and potential buyers of a product or service.
Each part in the system adds value for
the next level. The arrows represent
relationships that must be developed
and managed.
Once the company fully understands
its consumers and the marketplace, it
must decide which customers it will serve (the target market) and how it will bring them value
(the value proposition).
Marketing management is the art and science of choosing target markets and building
profitable relationships with them. To design a winning marketing strategy, the marketing
manager must answer two important questions: what customers will we serve (what is our
target market) and how can we served these customers best (what is our value proposition).
The company first must decide whom it will serve. Market segmentation and target marketing
need to be used to achieve this.
The company also must decide how it will differentiate and position itself in the marketplace.
A brand’s value proposition is the set of benefits or values it promises to deliver to
consumers to satisfy their needs.
There are 5 alternative concepts under which organizations design and carry out their
marketing strategies:
1. Production concept
The idea that consumers will favour products that
are available and highly affordable; therefore, the
organization should focus on improving
production and distribution efficiency.
2. Product concept
The idea that consumers will favour products that
offer the most quality, performance and features;
therefore, the organization should devote its
energy to making continuous product
improvements.
3. Selling concept
The idea that consumers will not buy enough of
the firm’s products unless the firm undertakes a large-scale selling and promotion
effort. This carries high risk
4. Marketing concept
A philosophy in which achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than
competitions do.
The selling concept takes an inside-out view that focuses
on existing products and heavy selling. The aim is to sell
what the company makes rather than making what the
,customer wants.
The marketing concept takes an outside-in view that focuses on satisfying customer needs
as a path to profits.
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 customer-driven marketing strategy discussed in
the previous section outlines which customers the company will serve (the target market) and
how it will serve them (the value proposition). Now, the company develops marketing plans
and programs – a marketing mix – that will actually deliver the intended customer value.
The major marketing mix tools are classified into four broad groups, called four P’s of
marketing: product, price, place and promotion.
Building customers relations
Doing a good job with the first three steps in the marketing process sets the stage for step
four, building and managing customer relationships
Consumer relationships management
The overall process of building and maintaining profitable customer relationships by
delivering 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.
Customer-managed relationships
Marketing relationships in which customers, empowered by today’s new digital technologies,
interact with companies and with each other to shape their relationships with brands.
Consumer-generated marketing
Brand exchanges created by consumers themselves – both invited and uninvited - by which
consumers are playing an increasing role in shaping their own brand experiences and those
of other consumers.
Partner relationship management
Working closely with partners in other company departments and outside the company to
jointly bring greater value to customers. Marketers can’t create customer value and build
customer. relationships by themselves. They must work closely with other company
departments and partners outside the firm.
Good customer relationship management creates customer satisfaction. In turn, satisfied
customers remain loyal and talk favourably to others about the company and its products.
Keeping customers loyal makes good economic sense. Loyal customers spend more and
stay around longer. Research also shows that it’s five times cheaper to keep an old customer
than acquire a new one.
Customer lifetime value
The value of the entire stream of purchases a customer makes over a lifetime of patronage.
, Share of customers
The portion of the customer’s purchasing that a company gets in its product categories.
Customer equity
The total combined customer lifetime values of all of the company’s customers.
The changing marketing landscape
Marketing doesn’t take place in a vacuum. Now that we’ve discussed the five steps in
the marketing process, let’s examine how the ever-changing marketplace affects
both consumers and the marketers who serve them.
Greatest Changes:
The Changing Economic Environment
The digital Age
Internet:
A vast public web of computer networks that connect users of all types all
around the world to each other and to an amazingly large information
repository.
TheGrowthofNot-for-ProfitMarketing
RapidGlobalization
SustainableMarketing–TheCallforMoreSocialResponsibility
Putting it all together:
Based on everything we’ve discussed in this chapter, we can expand the figure,
which outlined the marketing process (FIG. 1.1), to provide a road map for learning
marketing throughout the remainder of this text.
Chapter 2 Company and marketing strategy
Company-wide strategic planning
guides marketing strategy and planning. Like marketing strategy, the company’s broader
strategy must also be customer focused.
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