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Marketing

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a process by which companies create value for customers and build strong customer relationships to capture value from customers in return *values = benefits

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value proposition

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set of benefits or values that you can deliver to customers to satisfy their needs

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characteristics of value proposition

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-short and to the point -differentiates what you offer from your competitor -focused on needs or wants that the customer has, not the features of the product -written from the customer's point of view -references a need -should touch on 3Cs: company, customer, competitor

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mission statement

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declaration of your company's goals -audience internal (vs. external)

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value proposition vs. mission statement: value proposition

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a statement of what your product or service can do and offer its target market-- audience is external

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value proposition vs. mission statement: mission statement

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a declaration of your company or business' goal and what it wants to achieve-- audience is (largely) internal

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marketing process: steps 1-4

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creating value for customers

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marketing process: step 5

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capturing value from customers

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The Marketing Process

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1) understand the marketing place and customer needs/wants 2) design a customer-driven marketing strategy 3) construct an integrated marketing program that delivers superior value 4) build profitable relationships and create customer delight 5) capture value from customers to create profits and customer equity

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understand the marketplace and customer needs/wants: needs

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states of felt deprivation eg) physical- food, clothing, warmth & safety eg) social- belonging and affection eg) individual- knowledge and self expression

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understand the marketplace and customer needs/wants: wants

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the form human needs take as they are shaped by culture and personality (what you desire to satisfy need)

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understand the marketplace and customer needs/wants: demands

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human wants that are backed up by buying power

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understand the marketplace and customer needs/wants: market

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the set of all actual and potential buyers of a product eg) people don't need detergent; they need to clean their clothes

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design a customer-driven marketing strategy: marketing management

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choosing target markets and building profitable relationships

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design a customer-driven marketing strategy: manager's aim

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find, attract, keep, and grow target customers by creating, delivering, and communicating superior value

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design a customer-driven marketing strategy: selection customers to serve

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1) market segmentation 2) target marketing

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market segmentation

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dividing market into segments of customers

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target marketing

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selecting which segments to go after

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construct an integrated marketing program that delivers superior value: marketing mix

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a set of marketing tools the firm uses to implement plan

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construct an integrated marketing program that delivers superior value: 4 Ps

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price promotion product placement

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construct an integrated marketing program that delivers superior value: integrated marketing program

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communicates and delivers value

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build profitable relationships and create customer delight: customer relationship management

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the process of building and maintaing customer relationships by delivering superior customer value and satisfaction *most important step

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build profitable relationships and create customer delight: relationship building blocks

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1) customer value 2) customer satisfaction

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build profitable relationships and create customer delight: customer value and satisfaction

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customer value satisfaction = customer loyalty -satisfied customers buy again and tell others about good experiences -dissatisfied customers switch to competitors *changing face of marketing

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customer-perceived value

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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

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customer satisfaction

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perceived performance = buyer's expectations (eg. Jet Blue- "you above all")

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customer relationship levels and tools

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1) basic relationship (eg. Nike) 2) full partnership (eg. Nike & Sports Authority/Dick's/Foot Locker)

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frequency marketing programs

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loyalty rewards (eg. airlines, MyPanera)

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club marketing programs

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offer members special benefits and create member communities (eg. Apple)

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build profitable relationships and create customer delight: customer-managed relationship

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marketing relationships in which customers, empowered by today's new digital technologies, interact with companies and with each other to shape their relationships with brands eg) online social networks (FB, Twitter)

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build profitable relationships and create customer delight: consumer generated marketing

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brand exchanges created by consumers themselves-- both invited or uninvited-- by which consumers are playing an increasing role in shaping their own brand experiences eg) inviting customers to share ideas

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build profitable relationships and create customer delight: exchange

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the act of obtaining a desired object from someone by offering something in return

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capture value from customers to create profits and customer equity

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creating customer loyalty and retention (chart)

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capture value from customers to create profits and customer equity: customer lifetime value

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the value of the entire stream of purchases a customer makes over a lifetime of patronage

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capture value from customers to create profits and customer equity: outcomes of capturing value

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customer loyalty & retention customer equity market share share of customer

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customer lifetime value points

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1) prediction of the net profit 2) contribution margin 3) retention rate 4) discount rate

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retention

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loyalty programs, good customer service, high-quality products

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acquisition

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advertise for new customers, offer them promotional deals, cut prices

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share of customer

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the portion of the customer's purchasing that a company gets in its product categories

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capture value from customers to create profits and customer equity: customer equity

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lifetime value of entire customer base (total combined CLVs of all of the company's customers) -future value of the company's customer base

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building customer equity

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building the right relationships with the right customers *different types of customers require different relationship management strategies (CHART on study guides)

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Marketing Management Orientations

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1) production concept 2) product concept 3) selling concept 4) marketing concept 5) societal concept

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production concept

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consumers favor products that are cheap and easily available -can lead to marketing myopia -run risk of focusing too narrowly on their own operations

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marketing myopia

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the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products -customer needs are more important than customer wants

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product concept

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consumers favor products that offer the most quality, performance, and features **make it better -focus is on continuous product improvements -can lead to marketing myopia

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selling concept

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consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort **make them buy it/push product on them

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selling concept: II

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-focus on creating sales transactions rather than building long term relationships -outside-in perspective -Market->customer needs->selling & promoting->profits through sales volume

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the marketing concept

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a philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do **if you understand and meet their needs and wants, they will buy it

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the marketing concept: II

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customer-centered outside-in perspective -market -> customer needs -> integrated marketing -> profits through customer satisfaction

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societal/sustainable marketing

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-consider consumers' and society's long-term interests as well as short-term ones -based on the belief that this ill be in the company's long term interest - company (profits) + consumers (want satisfaction) + society (human welfare) - shared value: societal + economic needs

MKTG3010 Test#1 Chapter 1: The Marketing Process – Flashcards

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