Managing Profitable Customer Relationships

Definition

a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others

Attracting new customers


Retaining and growing current customers

Marketing Process

  1. Understand marketplace and cutomer needs/wants
  1. Design customer value driven marketing strategies
  1. Construct integrated marketing program that delivers superior value
  1. Build profitable relationships and create customer delights
  1. Capture value from customer to create profit and custoer equity

Core Concepts of Marketing

Needs

basic part of human life
(Not created by marketer)

eg: Need food, cloth, safety

Wants

needs shaped by culture and the individual

eg: Want a Big Mac, fries and soft drinks

Demands

Wants which are backed by buying power

eg: Burger King vs Ramly Burger

Marketing offers

Combination of products, services, infos / experiences that satisfy a need or want

Offer may inc. : services, information or ideas

Value and satisfaction

Marketers must deliver value to consumers

Customers form expectations about the value

dissatisfied, satisfied and delighted customer

Exchange, transaction and relationship

Exchange : act of obtaining a desired object from someone by offering something in return

Transactions : trade of values between two parties

Market

Set of actual and potential buyers of a product

Marketers seek buyers that are profitable

Marketing Management

art and science of choosing target markets and building profitable relationships with them

Production concept

Consumer: favor products that available and highly affordable

Management: focus on improving production/distribution efficiency

eg: mineral water,salt

Product concept

Consumer: will favor products that offer the most quality, performance and innovative features

Marketing strategies: making continuous product improvements

eg: Ex: shampoo, mousetraps, cameras, handphones

Selling concept

Consumer: not buy enough of firm’s product unless undertakes large-scale selling or more promotion effort

Marketing strategies:if the company faces overcapacity, aim to sell what they make rather than the market wants

From factory -> existing product -> selling/promoting -> profits through sales volume

Marketing concept

Company goal: knowing the needs/wants of target markets and delivering the desired satisfaction better than competitor’s do

From market -> customer needs -> integrated marketing -> profits through customer satisfaction

The Societal-Marketing concept

See the conflicts between consumer short run wants and consumer long run welfare

marketing strategies: company profit, consumer wants and society interests.

Stress the honesty, integrity and putting the consumer first before gain the profit

Marketing Mix

Product

goods and services the company offers to the target markets

quality, design, features, brand name

Price

amount of money customers have to pay to obtain the
product

Place

company activities that make the product available to target consumers

Promotion

channels, locations, coverage

activities that communicate the merits of the product and persuade target customers to buy it

Building Customer Relationships

Customer Relationship Management (CRM): overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Managing Customer Relationships and Capturing Customer Value

Customer perceived value

diff between total customer benefits & customer cost

Customer satisfaction

extent to which perceived performance matches a buyer's expectations

Customer-Engagement Marketing
fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community.

Consumer-Generated Marketing
Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences

Partner relationship management working closely with partners in other company departments and outside the company to jointly bring greater value to customers.


Customer lifetime value the value of the entire stream of purchases that the customer would make over a lifetime of patronage

Customer equity total combined customer lifetime values of all of the company’s customers

The Changing Marketing Landscape

Marketing Challenges

digital age

globalization

ethics & social responsibility

not-for-profit-marketing

marketing relationships