Chapter 1 Marketing Creating Customer Value and Engagement

Principles of Marketing Chapter 1 Marketing: Creating Customer Value and Engagement Learning Objectives 1-1 Define marketing and outline the steps in the marketing process. 1-2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. 1-3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 1-4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 1-5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Learning Objective 1 Define marketing and outline the steps in the marketing process. What is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. What is Marketing? Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Understanding the Marketplace and Customer Needs Needs are states of felt deprivation. Wants are the form human needs take as they are shaped by culture and individual personality. Demands are human wants that are backed by buying power. Understanding the Marketplace and Customer Needs Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs. Understanding the Marketplace and Customer Needs Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing actions try to create, maintain, and grow desirable exchange relationships. Understanding the Marketplace and Customer Needs A market is set of actual and potential buyers. Consumers market when they: • search for products • interact with companies to obtain information • make purchases Understanding the Marketplace and Customer Needs Learning Objective 3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Designing a Customer Value-Driven Marketing Strategy Marketing management is the art and science of choosing target markets and building profitable relationships with them. • What customers will we serve (target market)? • How can we best serve these customers (value proposition)? Designing a Customer Value-Driven Marketing Strategy A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Designing a Customer Value-Driven Marketing Strategy Production concept Product concept Selling concept Marketing concept Societal Marketing concept Designing a Customer Value-Driven Marketing Strategy Designing a Customer Value-Driven Marketing Strategy Societal marketing: The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Designing a Customer Value-Driven Marketing Strategy The marketing mix is comprised of a set of tools known a the four Ps: • product • price • promotion • place Integrated marketing program—a comprehensive plan that communicates and delivers intended value Learning Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Managing Customer Relationships and Capturing Customer Value Customer relationship management—the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Managing Customer Relationships and Capturing Customer Value Relationship Building Blocks Customerperceived value • The difference between total customer perceived benefits and customer cost Customer satisfaction • The extent to which perceived performance matches a buyer’s expectations Managing Customer Relationships and Capturing Customer Value Customer-Engagement Marketing fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community. Managing Customer Relationships and Capturing Customer Value Consumer-Generated Marketing Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences. Managing Customer Relationships and Capturing Customer Value Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Managing Customer Relationships and Capturing Customer Value Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Managing Customer Relationships and Capturing Customer Value Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. Managing Customer Relationships and Capturing Customer Value Customer equity is the total combined customer lifetime values of all of the company’s customers. Managing Customer Relationships and Capturing Customer Value Learning Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. The Changing Marketing Landscape Digital and social media marketing involves using digital marketing tools such as web sites, social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices. The Changing Marketing Landscape • Not-for-profit marketing growth • Rapid globalization • Sustainable marketing So, What Is Marketing? Pulling It All Together