CH.1 Creating Customer Value and Engagement

The Changing Marketing Landscape

-Not-for-profit marketing growth -Rapid globalization -Sustainable marketing

Marketing Process

1. Understand the marketplace and customer needs and wants 2. Design a customer-driven marketing strategy 3. Construct an integrated marketing program that delivers superior value 4. Build profitable relationships and create customer delight 5. Capture value from customers to create profits and customer equity

To design a winning marketing strategy, the marketing manager must answer two important questions:

1. What customers will we serve? (What's our target market)? -Market segmentation refers to dividing the markets into segments of customers. -Target marketing refers to which segments to go after 2. How can we best serve these customers?(What's our value proposition)? •The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs.

Customer-Engagement Marketing

Fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community.

The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy.

It includes 1-product 2- price 3-promotion 4- place.

Each group requires a different relationship management strategy:

Strangers show low potential profitability and little projected loyalty. Butterflies are potentially profitable but not loyal. True friends are both profitable and loyal. Barnacles are highly loyal but not very profitable.

1. Product •Involved with creating products that address customers' needs and wants •Involves creating/modifying brand names and packaging 2. Price •Associated with establishing pricing objectives, policies, and determining product prices 3. Place •Ensuring availability of products in desired quantities to as many customers as possible • 4.Promotion •Related to Activities that inform individuals or groups about the organization and its products

The 4ps

Societal marketing:

The company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests.

Customer- perceived value

The customer's evaluation of the difference between all the benefits and all the costs of a product

Customer satisfaction

The extent to which a product's perceived performance matches a buyer's expectations

CRM (Customer Relationship Management)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Customer costs

anything a buyer must give up to obtain the benefits of the product

Customer benefits

anything a buyer receives in an exchange

Demands are human wants that are backed by buying power

are human wants that are backed by buying power.

Needs

are states of felt deprivation.

Wants

are the form human needs take as they are shaped by culture and individual personality.

Customer value=

customer benefits - customer costs

Companies should manage _______________________ carefully.

customer equity

•Preparing an integrated marketing plan involves involves

developing and maintaining a product that will satisfy customers needs, making the product available at the right place and at a price acceptable to customers, and communicating information that helps customers determine if the product will satisfy their needs.

Marketing occurs when people decide to satisfy their needs and wants through-------------

exchange relationships

Figure 1.3 contrasts the selling concept and the marketing concept. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest—getting short-term sales with little concern about who buys or why.

in contrast, the marketing concept takes an outside-in perspective. As Herb Kelleher, the colorful founder of Southwest Airlines, once put it, "We don't have a marketing department; we have a customer department." The marketing concept starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers. In turn, it yields profits by creating relationships with the right customers based on customer value and satisfaction.

Digital and social media marketing

involves using digital marketing tools such as web sites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices.

Partner relationship management

involves working closely with partners inside the company (in other company departments) and outside the company (suppliers, retailers...) to jointly bring greater value to customers.

Marketing

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

Exchange

is the act of obtaining a desired object from someone by offering something in return.

Share of Customer

is the portion of the customer's purchasing that a company gets in its product categories

Customer equity

is the total combined customer lifetime values of all of the company's customers.

Customer lifetime value

is the value of the entire stream of purchases that the customer would make over a lifetime of investment

A _______________ is set of actual and potential buyers of a product.

market

Market offerings:

some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

Marketers are reexamining their relationships with social values and responsibilities and with the very Earth that sustains us. As the worldwide consumerism and environmentalism movements mature, today's marketers are being called on to develop

sustainable marketing practices

Marketing myopia:

the mistake of paying more attention to the specific products a company offers than to the experiences produced by these products.

Building the right relationships with the right customers

to capture value

Consumers engage in marketing when they:

•search for products •interact with companies to obtain information •make purchases