M1 Part 2b: Marketing Framework

Question 1

What is Stage 3 of the Marketing Framework

Answer 1

Preparing an Integrated Plan and Program to deliver intended and superior value to target customers

Question 2

What is the Marketing Mix’s Role in Stage 3 of the framework?

Answer 2

Integrating all aspects of the marketing mix as part of a plan to communicate and deliver the intended value to chosen customers.

Question 3

What is Stage 4 of the Marketing Framework?

Answer 3

Building Customer Relationships

Question 4

What is Building Customer Relationships/Customer Relationship Management

Answer 4

Customer Relationship Management: building and maintaining profitable customer relationships by delivering superior value and satisfaction

Question 5

What is customer perceived value and customer satisfaction?

Answer 5

• Customer Perceived Value: difference between total customer value (benefit from using your product) and total customer cost (paying for your product) compared to competitors
• Customer Satisfaction: Extent to which a product’s perceived performance matches buyer expectations

Question 6

What are the various customer relationship levels and tools?

Answer 6

• Basic Relationship: One-time customer-retailer transaction, customer buys to satisfy his needs, customer buys product but also has other options from competitors
• Full Relationship: Customer is loyal to the brand, returns for service and product quality, product is important due to its benefits and advantages over others
• Frequency Marketing Program: entitled to any customer, encourages customers to avail of a product or service repeatedly
• Club Marketing Program: entitled to customers enlisted in a special group or club giving them special benefits or perks as they are members of that group

Question 7

What does the Changing Nature of Customer Relationships tell us about?

Answer 7

Relating with more carefully selected customers: requires selective relationship management to target fewer, more profitable customers

Relating for the long term: uses customer relationship management to retain current customers and build profitable, long term relationships

Relating directly: uses direct marketing tools to make direct connections with customers

Question 8

What is Stage 5 of the Marketing Framework?

Answer 8

Capturing Value from Customers

Question 9

What is Customer Lifetime Value?

Answer 9

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

Question 10

What is Share of Customer?

Answer 10

Portion of the customer’s purchasing/customer investment that a company gets in its product categories/products offered

Aka the investment of a customer in a company’s products

Question 11

What is Customer Equity?

Answer 11

It is the total combined customer lifetime values of all of the company’s customers

Question 12

How do we build customer equity?

Answer 12

Treat customers as assets that needs to be managed and maximized

Different customer = different relationship management strategy

Build the right relationship with the right customers

Question 13

What are the classifications of Captured Value from Customers?

Answer 13

Short-Term customers: Butterflies - good fit between company offerings and customer needs; High profitability

Strangers - little fit between company offerings and customer needs; Low profitability

Long-Term customers: True Friends - good fit between company offerings and customer needs; High profitability

Barnacles - limited fit between company offerings and customer needs; Low profitability