Creating and Capturing Customer Value Creating and Capturing Customer Value Define marketing and outline the steps in the marketing process Understanding the Marketplace and Customer Needs Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program Building Customer Relationships Capturing Value from Customers The Changing Marketing LandscapeTopic Outline What Is Marketing?Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers inreturn Understanding the Marketplace and Customer Needs Customer needs, wants, and demands Market offerings Customer Value and satisfaction Exchanges and relationships Markets Core Concepts Understanding the Marketplaceand Customer Needs States of deprivation Physicalfood, clothing, warmth, safety Socialbelonging and affection Individualknowledge and self-expressionNeeds Form that human needs take as they are shaped by culture and individual personalityWants Human wants backed by buying powerDemandsCustomer Needs, Wants, and Demands 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 needsUnderstanding the Marketplaceand Customer Needs Understanding the Marketplaceand Customer NeedsCustomer Value and SatisfactionExpectationsCustomers Value and satisfactionMarketers Set the right level of expectations Not too high or low Exchange is the act of obtaining a desired object from someone by offering something in returnUnderstanding the Marketplaceand Customer Needs Markets are the set of actual and potential buyers of a product or serviceUnderstanding the Marketplaceand Customer Needs Designing a Customer-Driven Marketing StrategyMarketing management is the art and science of choosing target markets and building profitable relationships with them What customers will we serve? How can we best serve these customers? Designing a Customer-Driven Marketing StrategyMarket segmentation refers to dividing the markets into segments of customersTarget marketing refers to which segments to go afterSelecting Customers to Serve Designing a Customer-Driven Marketing StrategyDemarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift itSelecting Customers to Serve Designing a Customer-Driven Marketing Strategy The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needsChoosing a Value Proposition Designing a Customer-Driven Marketing StrategyProduction concept Product concept Selling concept Marketing concept Societal conceptMarketing Management Orientations Designing a Customer-Driven Marketing StrategyProduction concept is the idea that consumers will favor products that are available or highly affordableMarketing Management Orientations Designing a Customer-Driven Marketing StrategyProduct concept is the idea that consumers will favor products that offer the most quality, performance, and features. Organizations should therefore devote its energy to making continuous product improvements.Marketing Management Orientations Designing a Customer-Driven Marketing StrategySelling concept is the idea that consumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effortMarketing Management Orientations Designing a Customer-Driven Marketing StrategyMarketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors doMarketing Management Orientations Designing a Customer-Driven Marketing StrategySocietal marketing concept is the idea that a company should make good marketing decisions by considering consumers wants, the companys requirements, consumers long-term interests, and societys long-run interestsMarketing Management Orientations The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy. It includes product, price, promotion, and place. Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.Preparing an Integrated Marketing Plan and Program Building Customer Relationships The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfactionCustomer Relationship Management (CRM) Building Customer RelationshipsRelationship Building Blocks: Customer Value and SatisfactionCustomer perceived value The difference between total customer value and total customer cost Customer satisfaction The extent to which a products perceived performance matches a buyers expectations Building Customer RelationshipsCustomer Relationship Levels and ToolsBasic RelationshipsFull Partnerships Building Customer Relationships Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networksThe Changing Nature of Customer Relationships Building Customer RelationshipsPartner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers Building Customer Relationships Partners inside the company is every function area interacting with customers Electronically Cross-functional teams Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnershipsPartner Relationship Management Building Customer Relationships Supply chain is a channel that stretches from raw materials to components to final products to final buyers Supply management Strategic partners Strategic alliancesPartner Relationship Management Capturing Value from Customers Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronageCreating Customer Loyalty and Retention Capturing Value from CustomersShare of customer is the portion of the customers purchasing that a company gets in its product categoriesGrowing Share of Customer Capturing Value from CustomersCustomer equity is the total combined customer lifetime values of all of the companys customers Capturing Value from Customers Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized Different types of customers require different relationship management strategies Build the right relationship with the right customersBuilding Customer Equity The New Marketing LandscapeDigital age Rapid globalizationEthics and social responsibility Not-for-profit marketingMajor Developments All rights reserved. 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