Chapter 1: Marketing: Creating Customer Value and Engagement Flashcards
Marketing
the process by which companies CREATE VALUE for customers and build strong customer relationships in order to CAPTURE VALUE from customers in return
- create, maintain, and grow desirable exchange relationships with target audiences involving a product, service, idea, etc
5 core customer and marketplace concepts
- needs, wants and demands
- market offerings (products, services, and experiences)
- value and satisfaction
- exchanges and relationships
- markets
Needs
states of felt deprivation
- basic physical needs for food clothing, warmth and safety
- social needs for belonging and affection
- individual needs for knowledge and self-expression
Wants
the form human needs take as they are shaped by culture and individual personality
- objects that satisfy needs
Demands
Human wants that are backed by BUYING POWER
Market offerings
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want
Marketing myopia
The mistake of paying more attention to the specific products of a company offers than to the benefits and experiences produced by these products
The marketing process: creating and capturing customer value
- Create value for customers and build customer relationships
- Understand the MARKETPLACE and customer NEEDS and WANTS
- Design a customer value-driven marketing STRATEGY
- Construct an INTEGRATED marketing program that delivers superior value
- Build PROFITABLE relationships and create customer delight
- Capture value from customers to create PROFITS and customer EQUITY
Key building blocks for developing and managing customer relationships
Customer value
Customer satisfaction
- DEPENDS on marketers -> right level of expectations
Exchange
The act of obtaining a desired object from someone by offering sth in return
Market
the set of all actual and potential buyers of a product or service
- share a particular need/ want that can be satisfied through exchange relationships.
Marketing is a two-way affair
- digital technologies, social media, online sites
- empowered consumers
“How can our customers influence us?”
“How can our customers influence each other?”
A Modern Marketing system
Suppliers
(major environmental forces)
-> Company
-> Competitors
to Marketing intermediaries
-> Final Consumers (go back to company and competitors)
- each party adds value
- arrow = relationship that must be developed and managed.
e.g Walmart cheap = suppliers are low cost
Marketing management
The art and science of choosing target markets and building profitable relationships with them
- Customer management and Demand management
Grow target customers
find, engage, keep, and grow target customers by creating, delivering, and communicating superior customer value
2 questions for marketing manager
what customers will we serve (target customers)
how can we serve these customers best (what’s our value proposition)
Selecting customers to serve
- market segmentation
2. target marketing
Choosing a Value Proposition
- differentiate and position itself in the marketplace
- must design strong value propositions that give the greatest advantage
Value proposition
set of benefits or values it promises to deliver to customer to satisfy their needs
5 concepts that organizations design and carry out MARKETING STRATEGIES
- Production concept
- Product concept
- Selling concept
- Marketing concept
- Societal marketing concept
- Production concept
the idea that consumers will favor products that are AVAILABLE and HIGHLY AFFORDABLE
-> organization focus on improving production and distribution efficiency
- Product concept
the idea that consumers will favor products that offer the MOST QUALITY, PERFORMANCE, and FEATURES.
-> organization should devote its energy to making continuous product improvements
- Selling concept
Consumers will not buy enough of the firm’s products unless the firm undertakes a large scale selling and promotion effort
- Marketing concept
A philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors do
- Societal marketing concept
The idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.
Customer relationship management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Customer-perceived value
The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
Customer satisfaction
the extent to which a product’s perceived performance matches a buyer’s expectations
Customer-engagement marketing
Making the brand a meaningful part of consumers’ conversations and lives by fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community
Consumer-generated marketing
Brand exchanges created by consumers themselves- both invited and uninvited - by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.
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 a customer makes over a lifetime of patronage
Share of customer
The portion of the customer’s purchasing that a company gets in its product categories
Customer Equity
The total combined customer lifetime values of all of the company’s customers.
Digital and social media marketing
Using digital marketing tool such as Web sites, social media, mobile apps and ads, online video, e-mail, and blogs that engage consumers anywhere, at any time, via their digital devices
