Chapter 1: managing profitable customer relationships Flashcards
Marketing is
social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
Simple model of the marketing process:
- UNDERSTAND marketplace, customer and their wants/needs
- Design a customer-driven MARKETING STRATEGY
- construct a marketing program that delivers SUPERIOR VALUE
- Build profitable RELATIONSHIPS and CUSTOMER DELIGHT(high level of satisfaction beyond needs)
- CAPTURE VALUE from customers to create PROFIT and CUSTOMER EQUITY (total combined lifetime value of a company’s customers.)
Market segmentation
divides the market into segments of customers
Target marketing
select the segment to cultivate
Marketing management
demand management
demarketing
Demand management is
finding and increasing demand, also changing or reducing demand, such as in demarketing.
Demarketing is
temporarily or permanently reducing the number of customers or shifting their demand.
Marketing management philosophies
- Production concept
- Product concept
- Selling concept
- Marketing concept
- societal marketing concept
according to Production concept:
consumers will favor products that are available and highly affordable. Therefore, management should focus on improving production and distribution efficiency.
according to Product concept:
consumers will favor products that offer the most quality, performance, and innovative features.
according to selling concept
consumers will not buy enough of the firm’s products unless it undertakes a largescale selling and promotion effort.
according to marketing concept
achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
according to societal concept
questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare
The selling concept
Starting point:
Focus:
Means:
Ends:
Starting point: Factory
Focus: Existing products
Means: Selling and promoting
Ends: Profit through sales volume
The marketing concept
Starting point:
Focus:
Means:
Ends:
Starting point: Market
Focus: Customer needs
Means: Integrated marketing
Ends: Profits through customer satisfaction
The societal marketing concept is a triangle between:
Society- human welfare
Company- profits
Consumers- want satisfaction
Partner relationship marketing:
Partners inside the firm:
1. all employees are customer focused
2. Teams coordinate efforts towards customers
Partners outside the firm:
1. supply chain management
2. strategic alliances
Why Customer loyalty retention:
customer lifetime value(customer equity):
entire stream of purchases that the customer would make over a lifetime of patronage
Share of customer:
portion or percentage of a customer’s total purchasing in a particular product category that a specific company captures.
True friends
Good fit between company’s offerings and customer’s needs; highest profit potential and long term customer
Customer relationship Groups:
- Butterfly
- True friends
- Strangers
- Barnacles
Butterfly
Good fit between company’s offerings and customer’s needs; high profit potential but short term customer
strangers
Little fit between company’s offerings and customer’s needs; lowest profit potential.
short term and low profitability
Barnacles
Limited fit between company’s offerings and customer’s needs; low profit potential.
long term customer but low profitability
New marketing landscape:
> Rapid globalization
Not-for-profit marketing
Ethics and social responsibility
New world of marketing relationships
