Chapter 1 Marketing: Creating and Capturing Customer Value - ppt download
CUSTOMER VALUE AND SATISFACTION. Building Blocks of CompetitiveAdvantage Efficiency-input:output Quality-excellence Customer intimacy Superior value by means of building strong relationships with. Relationship building blocks: Customer value and satisfaction The key to building lasting customer relationships is to create superior customer value and. Keywords: Customer Value, Satisfaction, Customer Advocacy, Higher Education. 1. an incredibly practical guide for building customer loyalty.
Wants are the form human needs take as they are shaped by culture and individual personality. An American needs food but wants a Big Mac, french fries, and a soft drink. A person in Papua, New Guinea, needs food but wants taro, rice, yams, and pork. When backed by buying power, wants become demands. Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction. They conduct consumer research and analyze mountains of customer data.
These sellers suffer from marketing myopia. They forget that a product is only a tool to solve a consumer problem. A manufacturer of quarter-inch drill bits may think that the customer needs a drill bit. But what the customer really needs is a quarter-inch hole. The customer will have the same need but will want the new product. Smart marketers look beyond the attributes of the products and services they sell.
Chapter 1 Marketing: Creating and Capturing Customer Value
By orchestrating several services and products, they create brand experiences for consumers. All rights reserved 7 Customers Marketers Value and satisfaction Set the right level of expectations Not too high or low Note to Instructor: Discussion Question Ask students what online retailers deliver exceptional value and satisfaction.
How can they better identify customer needs? Students might be familiar with survey research or focus groups as techniques for gathering information or they might be asked for their zip code when they purchase in certain retailers Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. If they set expectations too high, buyers will be disappointed. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships.
All rights reserved 8 Exchange is the act of obtaining a desired object from someone by offering something in return -Marketing actions try to create, maintain, grow exchange relationships. Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object.
Beyond simply attracting new customers and creating transactions, the goal is to retain customers and grow their business with the company. The marketer tries to bring about a response to some market offering. Marketing consists of actions taken to create, maintain, and grow desirable exchange relationships with target audiences involving a product, service, idea, or other object. Companies want to build strong relationships by consistently delivering superior customer value.
All rights reserved 9 As shown in Figure 1. These buyers share a particular need or want that can be satisfied through exchange relationships. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities.
Consumers market when they search for products, interact with companies to obtain information, and make their purchases. Marketing involves serving a market of final consumers in the face of competitors. The company and competitors research the market and interact with consumers to understand their needs. Then they create and send their market offerings and messages to consumers, either directly or through marketing intermediaries.
Each party in the system adds value for the next level. The arrows represent relationships that must be developed and managed. All rights reserved 10 2-Designing a Customer-Driven Marketing Strategy Marketing 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? Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after Now that the company fully understands its consumers and the marketplace, it must decide which customers it will serve and how it will bring them value.
To design a winning marketing strategy, the marketing manager must answer two important questions: Have the student evaluate one of the following value propositions in terms of how well the company delivers on the proposition. Value propositions differentiate one brand from another. All rights reserved 12 Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal concept Marketing management wants to design strategies that will build profitable relationships with target consumers.
Marketing:Creating and Capturing Customer Value - ppt video online download
But what philosophy should guide these marketing strategies? What weight should be given to the interests of customers, the organization, and society? Very often, these interests conflict. There are five alternative concepts under which organizations design and carry out their marketing strategies: All rights reserved 13 Marketing Management Orientations a Production concept: Consumers will favor products that are available and highly affordable b Product concept: Consumers favor products that offer the most quality, performance, and features Focus is on continuous product improvements The production concept holds that consumers will favor products that are available and highly affordable.
Therefore, management should focus on improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers. The production concept is still a useful philosophy in some situations. However, although useful in some situations, the production concept can lead to marketing myopia.
Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective—satisfying customer needs and building customer relationships. All rights reserved 14 Marketing Management Orientations c Selling concept: Knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do The selling concept is typically practiced with unsought goods—those that buyers do not normally think of buying, such as insurance or blood donations.
Such aggressive selling, however, carries high risks.
It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. The aim often is to sell what the company makes rather than making what the market wants.
It assumes that customers who are coaxed into buying the product will like it. These are usually poor assumptions. All rights reserved 15 Marketing Management Orientations e Societal marketing: Make good marketing decisions by considering: What do these companies do that ties to the societal marketing concept?
Students might be familiar with many different companies that practice societal marketing through their Corporate Social Responsibility CSR initiatives. Students might be familiar with local retailers who are also involved in societal marketing.
They will note that these companies donate, contribute, or offer services to charities and not-for-profit organizations. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.
Even more broadly, many leading business and marketing thinkers are now preaching the concept of shared value, which recognizes that societal needs, not just economic needs, define markets. All rights reserved 16 Designing a Customer-Driven Marketing Strategy Note to Instructor This slide shows companies should balance three considerations in setting their marketing strategies.
Now, the company develops marketing plans and programs—a marketing mix—that will actually deliver the intended customer value.Chapter 1 - Video #4 - Creating Customer Relationships and Value Through Marketing - Lesson Objectiv
Discussion Question Ask students how the societal concept influences their buying decisions including brand selection and where they make purchases. It includes product, price, promotion, and place. Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers. The marketing program builds customer relationships by transforming the marketing strategy into action. The major marketing mix tools are classified into four broad groups, called the four Ps of marketing: To deliver on its value proposition, the firm must first create a need-satisfying market offering product.
It must then decide how much it will charge for the offering price and how it will make the offering available to target consumers place. Customer Value and Satisfaction Attracting and retaining customers can be a difficult task. Customers often face a bewildering array of products and services from which to choose. To attract and keep customers, a company must constantly seek ways to deliver superior customer value and satisfaction.
Figure 1 summarizes the effects of price on buyer judgments of value. Perceived value ultimately determines willingness to buy. Perceived value in turn is determined by a combination of the perceived benefits, or quality received, and the monetary sacrifice made; higher benefits enhance value; higher monetary sacrifice detracts from it.
These offsetting effects reflect the trade-off of the give and get components inherent in consumer perceptions of value. Relationships among price, perceived value and willingness to buy To survive in a competitive environment, an organization must provide target customers more value than is provided by its competitors.
Customer value is the difference between all the benefits derived from a total product and all the costs of acquiring those benefits.
For instance, owning a car can provide a number of benefits, depending on the person and the type of car, including flexible transportation, image, status, pleasure, comfort, and even companionship. However, securing these benefits requires paying for the car, gasoline, insurance, maintenance, and parking fees, as well risking injury from an accident, adding to environmental pollution, and dealing with traffic jams and other frustrations.
The difference between the total benefits and the total costs constitutes customer value. Customer Satisfaction Highly satisfied customers produce several benefits for the company.
Satisfied customers are less price sensitive. They talk favorably to others about the company and its products and remain loyal for a longer period. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted.