Chapter 1 Creating And Capturing Customer Value

51,784 views
51,273 views

Published on

Published in: Business
7 Comments
34 Likes
Statistics
Notes
No Downloads
Views
Total views
51,784
On SlideShare
0
From Embeds
0
Number of Embeds
527
Actions
Shares
0
Downloads
1,391
Comments
7
Likes
34
Embeds 0
No embeds

No notes for slide

Chapter 1 Creating And Capturing Customer Value

  1. 1. CHAPTER 1 Marketing: Creating and Capturing Customer Value
  2. 2. Chapter Overview <ul><li>Define marketing and the marketing process. </li></ul><ul><li>Explain the importance of understanding customers and identify the five core marketplace concepts. </li></ul><ul><li>Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. </li></ul><ul><li>Discuss customer relationship management and creating value for and capturing value from customers. </li></ul><ul><li>Describe the major trends and forces changing the marketing landscape. </li></ul>
  3. 3. <ul><li>Value Creation for Tide </li></ul><ul><li>History: Tide is an innovative brand, historically positioned on the basis of superior functional performance. </li></ul><ul><li>At Issue: Competitors can copy product benefits quickly, but can not copy feelings toward the brand. </li></ul><ul><li>Challenge : Understand what the brand name means to consumers and how it fits into their lives. </li></ul><ul><li>Goal: “Speak eye-to-eye with consumers.” </li></ul>Case Study – Proctor and Gamble <ul><li>Building Relationships </li></ul><ul><li>Research Process: Explored emotional connections women have with their laundry via consumer immersion. </li></ul><ul><li>Findings: Women are linked emotionally to clothing. Fabrics allow women to express their attitidues, personality, and multiple faces of being female. </li></ul><ul><li>“ Tide Knows Fabrics Best”: Campaign featured in rich visual imagery and meaningful emotional connections. </li></ul><ul><li>Result: 7% sales increase . </li></ul>
  4. 4. What Is Marketing? <ul><li>Simple Definition: Marketing is managing profitable customer relationships. </li></ul><ul><li>Goals: </li></ul><ul><li>Attract new customers by promising superior value. </li></ul><ul><li>Keep and grow current customers by delivering satisfaction. </li></ul>
  5. 5. Marketing Defined <ul><li>A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. </li></ul>OLD View of Marketing: Making a Sale – “Telling & Selling” New View of Marketing: Satisfying customer needs NEW View of Marketing: Satisfying Customer Needs
  6. 6. The Marketing Process <ul><li>A simple model of the marketing process: </li></ul><ul><ul><li>Understand the marketplace and customer needs and wants. </li></ul></ul><ul><ul><li>Design a customer-driven marketing strategy. </li></ul></ul><ul><ul><li>Construct a marketing program that delivers superior value. </li></ul></ul><ul><ul><li>Build profitable relationships and create customer delight. </li></ul></ul><ul><ul><li>Capture value from customers to create profits and customer quality. </li></ul></ul>
  7. 7. Needs, Wants, & Demands <ul><li>Need: State of felt deprivation including physical, social, and individual needs. </li></ul><ul><ul><li>Physical needs: </li></ul></ul><ul><ul><ul><li>Food, clothing, shelter, safety </li></ul></ul></ul><ul><ul><li>Social needs: </li></ul></ul><ul><ul><ul><li>Belonging, affection </li></ul></ul></ul><ul><ul><li>Individual needs: </li></ul></ul><ul><ul><ul><li>Learning, knowledge, self-expression </li></ul></ul></ul>
  8. 8. <ul><li>Wants: Form that a human need takes, as shaped by culture and individual personality. </li></ul><ul><li>Wants + Buying Power = Demand </li></ul>Needs, Wants, & Demands
  9. 9. Need / Want Fulfillment <ul><li>Needs and wants are fulfilled through a Marketing Offer: </li></ul><ul><ul><li>Some combination of products, services, information, or experiences offered to a market to satisfy a need or want. </li></ul></ul>
  10. 10. Need / Want Satisfiers <ul><li>Products: </li></ul><ul><ul><li>Persons </li></ul></ul><ul><ul><li>Places </li></ul></ul><ul><ul><li>Organizations </li></ul></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>Ideas </li></ul></ul><ul><li>Services </li></ul><ul><ul><li>Activity or benefit offered for sale that is essentially intangible and does not result in ownership. </li></ul></ul><ul><li>Brand Experiences: </li></ul><ul><ul><li>“ . . . dazzle their senses, touch their hearts, stimulate their minds.” </li></ul></ul>
  11. 11. Marketing Myopia <ul><li>Marketing myopia occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. </li></ul><ul><li>They focus on the “wants” and lose sight of the “needs.” </li></ul>
  12. 12. Value & Satisfaction <ul><li>Care must be taken when setting expectations: </li></ul><ul><ul><li>If performance is lower than expectations, satisfaction is low. </li></ul></ul><ul><ul><li>If performance is higher than expectations, satisfaction is high. </li></ul></ul>
  13. 13. Exchange vs. Transaction <ul><li>Exchange: </li></ul><ul><ul><li>Act of obtaining a desired object from someone by offering something in return. </li></ul></ul><ul><li>Transaction: </li></ul><ul><ul><li>A trade of values between two parties. </li></ul></ul><ul><ul><li>One party gives X to another party and gets Y in return. Can include cash, credit, or check. </li></ul></ul>
  14. 14. What Is a Market? <ul><li>The set of actual and potential buyers of a product. </li></ul><ul><li>These people share a need or want that can be satisfied through exchange relationships. </li></ul>
  15. 15. Modern Marketing Systems <ul><li>Main elements in a modern marketing system include: </li></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Company (marketer) </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Marketing intermediaries </li></ul></ul><ul><ul><li>Final users </li></ul></ul>
  16. 16. Marketing Management <ul><li>The art and science of choosing target markets and building profitable relationships with them. </li></ul><ul><ul><li>Requires that consumers and the marketplace be fully understood </li></ul></ul><ul><ul><li>What Customers Will We Serve? </li></ul></ul><ul><ul><li>How will we Serve them Best? (Our VALUE Proposition) </li></ul></ul>
  17. 17. Marketing Management <ul><li>Designing a winning marketing strategy requires answers to the following questions: </li></ul><ul><li> 1. What customers will we serve? </li></ul><ul><ul><li>What is our target market? </li></ul></ul><ul><ul><li>2. How can we best serve these customers? </li></ul></ul><ul><ul><li>What is our value proposition? </li></ul></ul>
  18. 18. Segmentation & Target Marketing <ul><li>Market Segmentation: </li></ul><ul><ul><li>Divide the market into segments of customers </li></ul></ul><ul><li>Target Marketing: </li></ul><ul><ul><li>Select the segment to cultivate </li></ul></ul>
  19. 19. Marketing Management <ul><li>Demand Management </li></ul><ul><ul><li>Finding and increasing demand, also changing or reducing demand, as in demarketing. </li></ul></ul><ul><li>Demarketing </li></ul><ul><ul><li>Temporarily or permanently reducing the number of customers or shifting their demand. </li></ul></ul>
  20. 20. Value Proposition <ul><li>The set of benefits or values a company promises to deliver to consumers to satisfy their needs. </li></ul><ul><ul><li>Value propositions dictate how firms will differentiate and position their brands in the marketplace. </li></ul></ul>
  21. 21. Marketing Management Philosophies <ul><li>Production Concept </li></ul><ul><li>Product Concept </li></ul><ul><li>Selling Concept </li></ul><ul><li>Marketing Concept </li></ul><ul><li>Societal Marketing Concept </li></ul>
  22. 22. The Marketing Plan <ul><li>Transforms the marketing strategy into action </li></ul><ul><li>Includes the marketing mix and 4 P’s of marketing: </li></ul><ul><ul><li>Product </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Place (Distribution) </li></ul></ul><ul><ul><li>Promotion </li></ul></ul>
  23. 23. Customer Relationship Management <ul><li>The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. </li></ul><ul><ul><li>Acquiring customers </li></ul></ul><ul><ul><li>Keeping customers </li></ul></ul><ul><ul><li>Growing customers </li></ul></ul>
  24. 24. Customer Perceived Value <ul><li>Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers. </li></ul>
  25. 25. Customer Satisfaction <ul><li>Dependent on the product’s perceived performance relative to a buyer’s expectations. </li></ul><ul><ul><li>Customer satisfaction often leads to consumer loyalty. </li></ul></ul><ul><ul><li>Some firms seek to DELIGHT customers by exceeding expectations. </li></ul></ul>
  26. 26. Customer Relationships <ul><li>Loyalty and retention programs build relationships and may feature: </li></ul><ul><ul><li>Financial Benefits </li></ul></ul><ul><ul><ul><li>EX: Frequency marketing programs </li></ul></ul></ul><ul><ul><li>Social Benefits </li></ul></ul><ul><ul><ul><li>EX: Club marketing programs </li></ul></ul></ul><ul><ul><li>Structural Ties </li></ul></ul><ul><li>Focus is on relating directly to profitable customers, for the long term . </li></ul>
  27. 27. Partner Relationship Marketing <ul><li>Marketing partners help create customer value and assist in building customer relationships. </li></ul><ul><li>Partners inside the firm: </li></ul><ul><ul><li>All employees customer focused </li></ul></ul><ul><ul><li>Teams coordinate efforts toward customers </li></ul></ul><ul><li>Partners outside the firm: </li></ul><ul><ul><li>Supply chain management </li></ul></ul><ul><ul><li>Strategic alliances </li></ul></ul>
  28. 28. Customer Loyalty & Retention <ul><li>Customer Lifetime Value </li></ul><ul><ul><li>The entire stream of purchases that the customer would make over a lifetime of patronage. </li></ul></ul><ul><li>Share of Customer </li></ul><ul><ul><li>The share a company gets of the customers purchasing in their product categories. </li></ul></ul>
  29. 29. Customer Equity <ul><li>The combined discounted customer lifetime values of all the company’s current and potential customers. </li></ul><ul><ul><li>Classify customers by loyalty and potential profitability </li></ul></ul><ul><ul><li>Manage accordingly </li></ul></ul>
  30. 30. New Marketing Landscape <ul><li>The New Digital Age </li></ul><ul><li>Rapid Globalization </li></ul><ul><li>Ethics and Social Responsibility </li></ul><ul><li>Not-for-Profit Marketing </li></ul><ul><li>New World of Marketing Relationships </li></ul>
  31. 31. The New Digital Age <ul><li>Technology impacts the ways firms bring value to their customers. </li></ul><ul><li>Greater connectivity means greater access to information, faster travel and communication. </li></ul><ul><li>The Internet allows anytime, anywhere connections between firms and customers. </li></ul><ul><ul><li>“ Click-and-mortar” companies </li></ul></ul><ul><ul><li>“ Click-only” companies </li></ul></ul><ul><ul><li>Business-to-business e-commerce </li></ul></ul>
  32. 32. You Should Now be Able to: <ul><li>Define marketing and the marketing process. </li></ul><ul><li>Explain the importance of understanding customers and identify the five core marketplace concepts. </li></ul><ul><li>Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. </li></ul><ul><li>Discuss customer relationship management and creating value for and capturing value from customers. </li></ul><ul><li>Describe the major trends and forces changing the marketing landscape. </li></ul>

×