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CHAPTER 1 Creating customer value and engagement (The Changing Economic…
CHAPTER 1
Creating customer value and engagement
Marketing
attract new customers-promising superior value+deliver satisfaction
critical to success
Peter Drucker 'the aim of marketing is to make selling unnecessary'
build strong customer relationships
Marketing Process
1)understand customers
2)marketing strategy
3) marketing programme
4)build a profitable relationship
STEP 1 :Understanding the Marketplace
1) NEEDS,WANTS,DEMANDS
needs- states of felt deprivation-physical,social,individual
wants-form 'needs' take shaped by culture/individual personality
demands-human wants that are backed by buying power
2) MARKET OFFERINGS
consumers needs and wants are fulfilled by market offerings
products and services+persons,places,organisations,information and ideas
marketing myopia-paying more attention to a product than to consumer needs
exp- company thinking customer wants a drill bit-but customer wants the hole-will be in trouble if a cheaper alternative comes along
3)VALUE AND SATISFACTION
satisfied customers buy again
marketers must set the right level of expectation cant be too low/high
4)EXCHANGES AND RELATIONSHIPS
satisfy needs and wants by obtaining something than offering something in return
marketing-actions taken to create/maintain/grow desirable relationships
5)MARKETS
marketing-managing markets to bring profitable relationships
STEP 2: Customer Value Driven Marketing Strategy
what is our target market?
what is our value proposition?
WHO?
divide market into segments
cant serve everyone
customer and demand management
VALUE PROPOSITION
differentiate
greatest advantage in target market
MARKET MANAGEMENT ORIENTATIONS
production concept
consumers will favor products that are available +affordable-organisation focus on improving production+distribution
product concept
consumers will favor products that offer the most quality-organisation should focus on continuous improvements
selling concept
consumers wont buy a lot of products unless it undertakes a large scale selling +promotion effort
marketing concept
achieving organisational goals depends on knowing the needs+wants of target markets +delivering desired satisfaction
societal concept
company's marketing decisions should consider consumers wants ,company's requirements,consumer's long-run interests,and society's long-run interests
STEP 3:PREPARING INTEGRATED MARKETING PLAN
to deliver intended value to targeted customers
marketing mix tools-product,price,place,promotion
must blend marketing mix into a plan
STEP 4:BUILD PROFITABLE CUSTOMER RELATIONSHIPS
superior customer value and satisfaction
customer value
difference between benefits and costs relative to other offers
customers often don't judge values objectively-they act on perceived value
customer satisfaction
product's perceived performance relative to the buyer's expectations
higher levels of satisfaction lead to higher levels of loyalty
customer relationship levels and tools
basic relationships
don't deal with customers personally
full partnerships
work closely with partners in other departments+outside the company
electronically +cross-functional teams
frequency marketing programmes
reward customers who buy frequently
club marketing programmes
offer members special rewards and promote a communtity
customer engagement marketing
fostering direct and continuous customer engagement
easier/stronger with the internet
consumers are more empowered than ever before
companies must focus on marketing by attraction
creating market offerings/messages that engage customers
consumer generated marketing
consumers play a bigger role in their brand experiences-through blogs/social media/forums/reviews etc
invited/uninvited
STEP 5:CAPTURING VALUE FROM CUSTOMERS
customer loyalty
a slight drop in quality can cause a big drop in loyalty
loyal customers spend more
losing customers is expensive
share of customer
the share the company gets of the customers purchasing
to increase: greater variety,broaden merchandise,recommend based on previous purchases,good customer relationship management
customer equity
measure of the future value of the company's customer base
better measure of company's performance than sales
increases when the loyalty of the firm's profitable customers increases
Building the right relationships
treating customers as assets that need to managed and maximized
classify customers based on profitability
strangers
butterflies
true friends
true believers
barnacles
The Changing Marketing Landscape
Digital Technology
changed how we communicate,share info,access entertainment, shop
marketers have new tools to connect with consumers - websites,apps social media etc
ability to extend customer engagement with the brand
The Changing Economic Environment
sensible consumption on the rise
vintage shopping
environmentally friendly
marketers focusing on the value for money aspect+durability
not for profit marketing
government agencies marketing
thinking global not just local
Sustainable Marketing
corporate ethics and social responsibility
a way to do well by doing good
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