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35 Cards in this Set
- Front
- Back
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Marketing
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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 PROCESS: 1. Understanding marketplace and customer needs and wants 2. Design customer driven marketing strategy 3. construct a marketing program that delivers superior value 4. build profitable relationship and create customer delight 5. Capture value and create profits and customer quality. 1-4 create value for customers and company reaps the rewards in the 5th step. |
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Needs
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States of felt deprivation (hunger)
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Wants
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the form human needs take as shaped by culture and individual personality (Big Mac)
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Demands
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human wants backed by buying power (having money to buy Big Mac)
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Marketing offer
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Combination of products, services, information or experiencews offered to a market to satisfy a need or a want
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Exchange
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the act of obtaining a desired object from someone by offering something in return
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Market
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the set of actual and potential buyers of a service
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Marketing
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Managin markets to bring about profitable customer relationships
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Marketing management
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The art and science of choosing target markets and building profitable relatinships with them.
Simply put, marketing management is customer management and demand management. |
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Marketing management
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1) Who will it serve?
A) segmentation B) target marketing 2) How will it serve? VALUE PROPOSITION |
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Value proposition
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the set of benefits or values it promises to deliver to consumers to satisfy their needs
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Demarketing
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marketing to reduce demand temporarily or permanently; the objective is to reduce demand or shift it (not destroy it)
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5 concepts for carrying out marketing strategies
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1. Production concept
2. Product concept 3. selling concept 4. Marketing concept 5. Societal Marketing Concept |
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1. Production concept
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consumers will favor products that are available and highly affordable.
It is usefull when demand exceeds supply, when the cost of production is too high and improved productivity is needed to bring it down. It can lead to marketing myopia: focusing too narrowly on their operations and loosing sight of real objective |
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2. Product concept
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consumers will favor products that offer the most in quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements. Also can lead to marketing myopia (eg. thinking of trains instead of transportation)
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3. selling concept
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consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort. Typical with unsought goods such as blood donations, practices when firm has overcapacity and wants to sell what they make. Focuses on creating sales transactions instead of creating long-term customer relationships.
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4. marketing concept
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marketing management philosophy that holds that achieving organizational goals depends o knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors. Customer centered. Requires research and testing of products and improvements.
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5. Societal Marketing concept
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a principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers' wants, company's requirements, consumers' long-run interest and society's long run interest. Company profits, consumer wants and society's interest. Eg. J&J Tylenol recall
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4P's:
Product Price Promotion Place |
The firm needs to create a need-satisfying marketing offer (PRODUCT) and decide how much it will charge for the offer (PRICE) and how it will make the offer available to target consumers (PLACE) and how it will make the offer available to target consumers (PLACE) and finally, it must communicate with target customers about the offer and persuade them of its merits (PROMOTION).
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Customer Relationship management
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the overall processof building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. satified consumers are more likely to be loyal customers
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Customer value
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Customer perceived value: the difference between total customer value and total customer cost (although ups might be faster and cheaper than fedex, fedex in customer's mind is fast service and prestige.. and hence has more market share)
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Customer satisfaction
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the extent to which a product's preceived performance matches a buyer's expectations.
customer satisfaction can be increased by lowering price or increasing services. Smart companies don't attempt to maximize consumer satisfaction but delight consumers by promising only what they can deliver and delivering MORE. |
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Customer relationship levels
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1. Basic relationship: companies with low-marging customers seek to develop basic relationships (eg. P&G with Tide cusomers)
2. Full partnership: in markets with high pargins, sellers want to creat full partnership with their key customers (eg: P&G with high retailers) |
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Selective relationship management
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using customer profitability analysis to weed out losing customers and target winning ones for pampering.
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Connect more deeply
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customers are choosing to maintain a long relationship with customers, since the cost of attracting new customers is rising
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Connect more directly
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by phone, catalogues, kiosks, internet.
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partner relationship management
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working closely with partners in other company departments and outside the company to jointly bring greater value to consumers.
INSIDE: companies are linked with the same cause of customer service. SAles and marketing are no longer the only department focused on customers. OUTSIDE: supply chain describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers. SUPPLY CHAIN MANAGEMENT. STRATEGIC ALLIENCES: eg: Microsoft and Intel |
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Capturing Value from Customers
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Must create consumer delight as well as satisfaction
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Customer lifetime value
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the value of the entire stream of purchases that the customer would make over a lifetime patronage
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Share of customers
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the portion of the customer's purchasing that a company gets in its product categories.
(good customer relationship management helps increase it). Offering greater variety to current customers and training empoloyees to cross-sell and up-sell in order to market more products and services to existing customers also increases it. |
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Customer equity
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the total combined customer lifetime values of all the company's customers. Better measure of a firm's performance than current sales or market share
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Ultimate aim of customer relationship management
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increase customer equity
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CUSTOMER RELATIONSHIP GROUPS:
Different types of customers require different relationship management strategies |
PROJECTED LOYALTY:
(a) Short-term customers: i. High profitability: BUTTERFLIES: good fit between company's offerings and custoer's need; high profit potential. ii. Low profitability: STRANGERS: Little fit between company's offerings and customer's needs; lowest profit potential. (b) Long-term customers: i. High profitability: TRUE FRIENDS: good fit between company's offerings and customer's needs; highest profit potential ii. Low profitability: BARNACLES: limited fit between company's offerings and customer's needs; low profit potential. |
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NonProfit Marketing
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Exists!! Even though Marketing was traditionally used for for-profit organizations, it si being now used for nonprofit as well.
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SUMMERY
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Look at figure 1.6 in page 28
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