CH 1 - Creating Customer Value and Engagement
What is customer engagement marketing? What has given a huge boost to it?
-makes the brand a MEANINGFUL part of consumers' conversations and lives. -greater consumer empowerment means companies must practice marketing by ATTRACTION -marketers must find ways to enter customers' conversations with engaging and relevant brand messages -INTERNET and SOCIAL MEDIA have given a huge boost to customer-engagement marketing
What are the two goals of marketing?
1. attract new customers by promising superior value 2. keep and grow current customers by delivering satisfaction
what are the 5 main influences that are changing today's current marketing landscape?
1. digital age 2. changing economic environment 3. growth of nonprofit marketing 4. rapid globalization 5. sustainable marketing
What are the 5 core customer and marketplace concepts?
1. needs, wants, and demands 2. market offering 3. value and satisfaction (must set the right level of expectations, and meet those expectations to keep customers happy) 4. exchanges and relationships 5. markets
What is a market?
All actual and potential buyers of a product. There is a sellers and consumers market. Customer-managed relationships are important as customers are empowered by digital technologies. This has made marketing a two-way affair.
What are the customer relationship levels?
Basic relationships - low margin customers Full partnerships - high-margin customers
What are the definitions of digital/ social media marketing and mobile marketing?
Digital and social media marketing refers to using digital marketing tools such as Web sites, social media, mobile apps and ads, online video, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices. Social media provides exciting opportunities to extend customer engagement and get people talking about a brand. Mobile marketing is the fastest-growing digital marketing platform. Marketers use mobile channels to stimulate immediate buying, make shopping easier, enrich the brand experience, or all of these. For example, Starbucks customers can use their mobile devices for everything from finding the nearest Starbucks and learning about new products to placing and paying for orders. Although online, social media, and mobile marketing offer huge potential, most marketers are still learning how to use them effectively. The key is to blend the new digital approaches with traditional marketing to create a smoothly integrated marketing strategy and mix.
There are 4 customer relationship groups that relate to potential profitability and projected loyalty. What are they?
Each of the four customer relationship groups requires a different relationship management strategy. The company will not gain anything by investing time and resources in developing relationships with strangers (short-term loyalty, low profitability) For butterflies, the company should create satisfying and profitable transactions, capturing as much of their business as possible in the short time during which they buy from the company. Efforts to convert butterflies into loyal customers are rarely successful (low loyalty, high profitability) True friends are loyal and have the potential to generate good profit for the company. The firm should make continuous relationship investments to delight these customers and nurture, retain, and grow them (high loyalty, high profitability). Barnacles are highly loyal but not very profitable. There is a limited fit between their needs and the company's offerings. The company may be able to improve the profitability of barnacles by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be fired (high loyalty, lo profitability).
How have rapid globalization and sustainable marketing influenced today's current marketing environment?
Managers around the world are taking both local and global views of the company's: Industry Competitors Opportunities Corporate ethics and social responsibility have become important for every business.
What is marketing?
Marketing is engaging customers and managing profitable customer relationships.
What is marketing myopia?
Marketing myopia refers to sellers paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. They forget that a product is only a tool to solve a consumer problem. These sellers will have trouble if a new product comes along that serves the customer's needs better or less expensively. The customer will have the same need but will want the new product.
What are the 5 steps of the marketing process?
Part 1: Create value FOR CUSTOMERS and build customer relationships. 1. understand the marketplace and customer needs, wants, and demands 2. design a customer VALUE-DRIVEN marketing strategy 3. Construct an integrated marketing program that delivers superior value 4. Engage customers, build profitable relationships, and create customer delight Part 2: Capture value FROM CUSTOMERS in return 5. Capture value from customers to create profits and customer equity
What are the three considerations underlying the societal marketing concept? (draw the triangle)
Society (human welfare) Company (profits) Consumers (want satisfaction) These should all be in balance.
How did the great recession affect today's current marketing environment?
The Great Recession (2008-2009) undermined consumer confidence. Post-recession era Consumers have become more frugal. New consumer spending values emphasize simpler living. Marketers are focusing on value, practicality and durability in their product offerings.
CONSTRUCT AN INTEGRATED MARKETING PROGRAM What is the marketing mix (Four P's), and what do each of the P's stand for?
The marketing mix is the set of marketing tools, the four P's the firm uses to IMPLEMENT the marketing strategy. The four Ps of marketing are product, price, place and promotion.
What is partner relationship management?
Working closely with partners both inside and outside the company to jointly bring more value to customers -partners inside the firm - cross-functional teams -partners outside the firm - suppliers. channel partners *In addition to customer relationship management, marketers must also be good at partner relationship management.
What is the 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 competitors do.
What is consumer-generated marketing?
brand exchanges created by consumers (they play an increasing role in shaping their own brand experiences and those of other consumers) -can be uninvited and invited consumer-to-consumer exchanges, or consumers invited by companies to play a role in new product/service ideas, or active role in shaping ads)
DESIGNING A CUSTOMER VALUE-DRIVEN MARKETING STRATEGY: what is marketing management?
choosing target markets and building profitable relationships
What is market segmentation?
dividing the market into segments of customers
What are customer relationship building tools?
frequency marketing programs loyalty rewards programs club marketing programs
How can share of customer be increased?
good customer relationship management, offer greater variety to current customers, and create programs to cross-sell and up-sell to existing customers
What is the production concept?
holds that consumers will favor products that are available and highly affordable
What is the product concept?
holds that consumers will favor products that offer the most quality, performance, and features
What is the societal marketing concept?
holds 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
The firm must blend each marketing mix tool into a comprehensive _______ marketing program that communicates and delivers the intended value to chosen customers.
integrated
What are needs, wants, and demands?
needs: states of felt deprivation (physical, social, individual needs) wants: form taken by human needs when shaped by culture and individual personality demands: human wants that are backed by buying power
What are the 5 marketing management orientations (concepts)?
production concept, product concept, selling concept,marketing concept, and societal marketing concept
What are market offerings?
products, services, information, or experiences offered to satisfy a need or want
What is the selling concept?
refers to the idea that consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort
What is target marketing?
refers to which segments to go after
What are the main elements of the modern marketing system? (Draw a picture)
suppliers --> company and competitors --> --> marketing intermediaries --> final consumers
Designing a winning marketing strategy involves determining the ______ ________, and creating a ______ ________.
target market; value proposition
What is an exchange?
the act of obtaining a desired object by offering something in return
What is customer-perceived value?
the customer's evaluation of a marketing offer relative to those of competing offers (Customers DO NOT judge values and costs accurately or objectively. They act on PERCEIVED value. For some, this might mean sensible products at affordable prices.
What is customer satisfaction?
the extent to which a product's perceived performance matches a buyer's expectations. Higher levels of customer satisfaction lead to greater customer loyalty, which in return results in better company performance. Outstanding marketing companies aim to delight customers by promising only what they can deliver and then delivering more than they promise. For example, JetBlue creates first-rate, customer-satisfying experiences. Its slogan—JetBlue: YOU ABOVE ALL—tells customers that they are at the very heart of JetBlue's strategy and culture.
ENGAGE CUSTOMERS, BUILD PROFITABLE RELATIONSHIPS, and PROVIDE CUSTOMER DELIGHT What is customer relationship management?
the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. it deals with all aspects of acquiring, keeping, and growing customers.
What is share of the customer?
the portion of the customer's purchasing that a company gets in their product categories Beyond simply retaining good customers to capture customer lifetime value, good customer relationship management can help marketers increase their share of customer.
What is a value proposition?
the set of benefits or values it promises to deliver to consumers to satisfy their needs (helps differentiate and position the company in the marketplace) For example, Vine gives you "the best way to see and share life in motion" through "short, beautiful, looping videos in a simple and fun way for your friends and family to see" and Facebook helps you "connect and share with the people in your life."
What is customer equity?
the total combined customer lifetime values of all of the company's current and future customers -measures the future value of the company's customer base -increases when the loyalty of the firm's profitable customers increases -better measure of a firm's performance than current sales or market share
What is customer lifetime value?
the value of the entire stream of purchases a customer makes over a lifetime of patronage *customer defections can be costly (can lose that customer's lifetime value and may cause other customers to defect)
What are the main differences between traditional and contemporary forms of marketing?
traditional: making a sale, abundance of products in the nearby shopping centers, tv, magazine, and direct-mail ads contemporary: satisfying customer needs, imaginative web sites and mobile phone apps, blogs, online videos, and social media, reach customers directly, personally, and interactively
