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Marketing

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The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. short version: managing profitable customer relationships

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What is the goal of marketing?

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to create value for customers & to capture value from customers in return. - to attract new customers by promising superior value & - to keep & grow current customers by delivering satisfaction

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Steps in the marketing process (MP)

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1. understanding marketplace & customer needs & wants 2. designing a customer-driven marketing strategy (goal: getting, keeping, & growing target customers) 3. creating an integrated marketing program which delivers superior value 4. building profitable customer relationships & creating customer delight 5. capturing value from customers for the to create profit & customer equity

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How do you create an integrated marketing program?

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Develop a product, service, idea or experience that fulfills the needs & present the marketing offer in a way that provides superior customer value & satisfaction at a profit versus what competitors are offering

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Why is it important to build strong customer relationships?

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- In order for a firm to be successful today they need to understand & satisfy customer needs in well-defined target markets - Digital, mobile, &social media developments have revolutionized how consumers shop & interact, calling for new marketing strategies and tactics - it's more important than ever to build strong customer relationships based on real and enduring customer value

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How does modern marketing differ from old approaches?

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The old version was "telling & selling," while th modern marketing is about satisfying customer needs. New approaches do more than just blast out messages to the masses. They reach you directly, personally, & interactively. Today's marketers want to become a part of your life and enrich your experiences with their brands—to help you live their brands.

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Customer needs wants & demands

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Needs: state of felt deprivation Wants: the form of needs as shaped by culture & the individual (objects that satisfy needs) Demands: Wants backed by buying power

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5 core marketplace concepts

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1. Needs, wants, & demands 2. Market offerings 3. Customer value & satisfaction 4. Exchanges & relationships 5. Markets

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Market offerings

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Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

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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

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Exchange

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

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Market

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The set of all actual and potential buyers of a product or service.

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Marketing Management

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The art and science of choosing target markets and building profitable relationships with them.

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What are the key elements of a customer-driven marketing strategy?

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1. Identify target market (who company's clients R) 2. Market segmentation 3. Target marketing 4. Identify how to differentiate & position company in marketplace

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Market segmentation

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Dividing the market into segments of customers

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Target marketing

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Selecting which segments a company will cultivate

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Value proposition

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A set of benefits that a company promises to consumers to satisfy their needs.

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Marketing Mix (4 P's)

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a set of marketing tools that work together to satisfy customer needs & build customer relationships 1. Product: a need-satisfying market offering 2. Price: charge for the offering 3. Place: means by which the offering is made available to consumers 4. Promotion: communication w/customers about offering & persuasion of its merits

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What are the 5 marketing management orientations?

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1. Production concept 2. Product concept 3. Selling concept 4. Marketing concept 5. Social marketing concept

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Production concept

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- Consumers will favour available/affordable products - organization should focus on improving production/distribution efficiency - Still useful when demand exceeds supply Short version: Improving production efficiency to drive down costs.

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Product concept

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- Consumers favour products with the best: Quality, Performance & Features - Companies focus on continuous product improvements - Can lead to marketing myopia

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Selling concept

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Consumers will not buy a company's products unless it undertakes a large-scale selling & promotion effort.

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Marketing concept

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the philosophy that achieving organizational goals depends on determining the needs & wants of target markets & delivering the desired satisfaction more efficiently & effectively than other competitors.

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Societal marketing concept

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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. Generating customer satisfaction & long-run societal well-being through sustainable marketing strategies are key to both achieving the company's goals & fulfilling its responsibilities.

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Customer-driven marketing

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understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future.

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Sustainable marketing

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Socially & environmentally responsible marketing that meets consumers' & business' present needs while preserving or enhancing the ability of future generations to meet their needs.

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Shared value

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focuses on creating economic value in a way that also creates value for society.

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Integrated marketing plan/program

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- Communicates & delivers the intended value to target customers - Consists of firm's marketing mix (4 P's): the set of marketing tools the firm uses to implement its marketing strategy; Product, price, place, and promotion

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Customer Relationship Management (CRM)

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The process of building & maintaining profitable customer relationships by delivering superior customer value & satisfaction.

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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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The extent to which a product's perceived performance matches a buyer's expectations.

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Customer engagement marketing

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aims to make a brand meaningful to consumers by directly & continuously engaging & involving them in shaping brand conversations, experiences, & community.

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Consumer-generated marketing

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Brand exchanges created by consumers themselves by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.

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Partner Relationship Management

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Working closely with others inside and outside the company to jointly bring more value to customers.

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The goal of CRM & customer engagement is

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Ultimate goal: to produce high customer equity.

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Customer lifetime value (CLV)

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

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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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How do you grow share of customers?

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1. offer greater variety to current customers 2. create cross-sell or up-sell programs

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Customer equity

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the total combined customer lifetime values of all the company's customers.

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4 Customer groups (types)

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1. butterflies 2. strangers 3. true friends 4. barnacles

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Butterflies

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- Good fit between company's offerings & customer's needs; high profit potential, not loyal - create satisfying & profitable transactions with them, capturing as much of their business as possible in the short time. Then, cease investing in them until the next time around.

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Strangers

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- Little fit between company's offerings and customer's needs; lowest profit potential - The relationship management strategy for these customers is simple: Don't invest anything in them

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True friends

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- Both profitable and loyal. - strong fit between their needs & company's offerings - make continual relationship investments to delight, nurture, retain, & grow them so they come back regularly & tell others about their good experiences with the company

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Barnacles

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- highly loyal but not very profitable - limited fit between their needs & company's offerings. - perhaps the most problematic customers. The company might be able to improve their profitability by selling them more, raising their fees, or reducing service to them. However, if they cannot be made profitable, they should be "fired."

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How can you capture value from customers?

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- Companies want to not only acquire profitable customers but also build relationships that will keep them & grow "share of customer." - Diff. types of customers require diff. CRM strategies. - The marketer's aim is to build the right relationships w/the right customers. - In return for creating value for targeted customers, the company captures value from customers in the form of profits & customer equity.

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What are the major trends & forces that are changing the marketing landscape?

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1. The digital age 2. The changing economic environment 3. The growth of not-for-profit marketing 4. Rapid globalization 5. The call for more ethics & social responsibility

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Digital and social media marketing

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Digital & social media marketing: the use of marketing tools such as websites, social media, mobile apps & ads, online video, email, & blogs, in order to engage consumers anywhere & at any time via their digital devices.

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Social media marketing

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providing links to company's FB, Twitter, IG etc. & provides exciting opportunities to extend customer engagement & get people talking about a brand . The goal is social sharing: getting people to talk with others & pass along their positive brand experiences.

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Mobile marketing:

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stimulates immediate buying, makes shopping easier, & enriches the brand experience through browsing product information through apps or the mobile Web, making in-store price comparisons, reading online product reviews, finding & redeeming coupons, etc.

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Not-for-profit marketing

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can help attract membership, funds, & support for non-profits such as universities, hospitals, museums, zoos, symphony orchestras, & churches. Even gov't agencies.

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What is global marketing?

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- Rapid globalization has produced global competition. Modern companies are not only trying to sell more of their locally produced goods internationally, they're also buying more supplies & components abroad. - Thus, managers in countries around the world are increasingly taking a global, not just local, view of the company's industry, competitors, & opportunities.

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Sustainable marketing

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- Ethical & societal responsibilities are becoming increasingly important to marketers, who are being called upon to take greater responsibility for social - Caring capitalism: firms set themselves apart by being civic minded &responsible. They build social responsibility & action into their company value & mission statements.

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The major new developments in marketing can be summed up in which single concept?

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Creating & capturing customer value.

COMM223 – Ch 1: Marketing – Creating & Capturing Customer Value – Flashcards

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