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- The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
- Marketing is the activity, set of instructions, and processed for creating communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
- Managing profitable customer relationships.
- Goal=attract & keep/grow customers
What is the Marketing Process?
- Understand the marketplace and customer needs and wants.
- Design a customer-driven marketing strategy.
- Construct an integrated marketing program that delivers superior value.
- Build profitable relationships and create customer delignt.
- *previous steps help in creating value
- Capture value from customers to create profits and customer equity.
What are the five core cutomer and marketplace concepts?
- 1. needs, wants, and demands
- 2. market offerings (products, services, and experiences)
- 3. value and satisfaction
- 4. exchange and relationships
- 5. markets
States of felt deprivation. Includes basick physical need for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. They are the a basic part of the human makeup.
The form human needs take as shaped by culture and individual personality. Wants are shaped by one's society and are described sin terms of objects that satisfy needs.
Human wants that are backed by buying power. Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction.
Define Market Offerings.
Some combination of products, services, information, or experiences offered to a market to sarisfy a need or want. Customer needs and wants are fulfilled through market offerings. They are not limited to physical produts, they also include services.
Activites or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. examples: banking, airline, hotel, tax preparation, and home repair service.
Define Marketing Myopia.
The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products.
How customer choose among the many market offerings?
Customers form expectaions about the value and satisfaction that various maket offerings will deliver and by accordingly. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers oftend switch to competitors and disparage the products to others. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships. Set the right expectations (value+satisfaction=relationships)
The act of obtaining a desired object from someone by offering something in return. Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object.
The set of all actual and potential buyers of a product or service. Buyers share a particular need or want that can be satisfied through exchange relationships.
What are core marketing activites?
consumer research, product development, communication, distribution, pricing, and service
Explain the Modern Marketing System.
Marketing involes serving a market of final customers in the face of competitors. The company and competitors research the market and interact with customers to understand teir needs. Then they create and send their market offerings and messages to comsumers, either directly or through market intermediaries. All the parties in system are affected by major environmental forces. A company success as building profitable relationships depends not only on its own actions but also on how well the entire system serves the needs of final customers. Figure 1.2
What are the two key questions?
- What customers will we serve?
- How will we create value?
Define Marketing Management.
The art and science of choosing target markets (understading them) and building profitable relationships with them (customers stay because of superior value). The marketing manager's aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior customer value.
What customers will we serve?
- First: Market segmentation-dividing the market into segments of customer.
- Then: Target maketing-selecting one or more segments to cultivate.
How will we create value?
Through a brand's value proposition-the set of benefits or values it promises to deliver to customers to satisfy their needs. This is how a company will deffrentiate and position itself in the marketplace.
What are the five alternative concepts (philosophy) under which organizations design and carry out their marketing strategies?
- Societal marketing concepts
Define Product Concept. What is the risk?
- 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.
- Companies adopting this orientaion rum a major risk of focusing too narrowly on thier own operations and losing sight of the real objective-satisfying customer needs and building customer relationships.
Define Product Concept. What is the disadvantage?
- 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.
- Focusing on contant product improvements can lead to more costs, also, organizations forget about all the orther marketing activites.
Define Selling Concept. What is the risk?
- The idea that consumers will not buy enough of the firms products unless it undertakes a large-scale selling and promotion effort.
- It focuses on creating sales transactions rather than on building long-term profitable, customer relationships.
Define Marketing Concept.
The maketing 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. Marketing is "gardening" not "hunting", is cutomer centered (profits come from customer satisfaction)
Define Societal Marketing Concept.
- The idea that a company's maketing decisions should consider consumers' wants, the company's requirements, comsumers' long-run interests, and society's long-run interest.
- Looks into the conflict between immediate needs and long term well-being.
What does the marketing plan deliver?
It delivers intended value to the chosen consumer.
Define Marketing Mix. What are the marketing tools?
- The set of maketing tools the firm uses to implement its marketing strategy.
- four Ps: product, price, place, and promotion
What is Customer Relationship Management?
- It is perhaps the most important concept of modern marketing, it is defined as a customer data management activity (CRM), it involves managing detailed information about individual customers and carefully managing customer "touchpoints" in order to maximize customer loyalty.
- 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.
Define 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.
Define Customer Satisfaction.
- The extent to which a product's perceived performance matches a buyer's expectations.
- -customer satisfaction often leads to consumer loyalty
- -some firms seek to DELIGHT customers by exceedind expectations.
- -key: satisfy profitably
How can companies build relationships?
- At one extreame, a company with many low-margin customers may seed to develop basic relationship-many customers/low margins.
- At the other extreme, in markets with few customers and high margins, sellers want to create full partnerships.
What are the tools companies use to build relationships?
- frequency marketing program-reward customers who buy frequently or in large amounts
- club marketing programs-offer members special benefits and create member communities
- *both help create a stronger bond
What is true mass marketing?
- It is selling in a standardized way to any customer who comes along.
- *fewer companies engage in mass-marketing
Define Customer-management 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.
- Marketing by attraction versus intrusion
- Relating more deeply and interactively via blogs, social networks, email, and video sharing.
Define Consumer-generated marketing.
Brand exchanges created by consumers themselves-both invited and uninvited-by which consmers are playing an increasing role in shaping their own brand experiences and those of other consumers.
Define Partner Relationship Managements.
- Working closely with partners in other company departments and outside the company to jointly bring greater value to customers.
- Marketing partners help create customer value and assits in building customer relationsips.
- Partners inside the firm: all employees customer focused; team coordiante efforts toward customers
- Partners outside the firm: supply chain management; strategic alliances
Define Customer Lifetime value.
The value of the entire stream of purchases that the customer would make over a lifetime of patronage.
Define Share of customer
The portion of the company's purchasing that a company gets in its product categories.
How does the company capture value?
Through currents/future sales, market sahre, and profits
Define Customer Equity.
- The total combined customer lifetime values of all of the company's customers.
- More loyal, the higher the firm's Customer Equity