MKTG 396 Midterm note (C.1-7)

Define marketing and describe the five-step model of the marketing process. (textbook, pp. 5–7) Create value for customers and build relationships   Understand the marketplace and customer needs and wants.  Design a customer-driven marketing strategy.  Construct an integrated marketing program that deliver superior value.  Build profitable relationship and create customer delight. Capture value from customer in return  Capture value for customers to create profits and customer equity. 2. Explain the importance of understanding the marketplace and consumer needs, and define the core concepts critical to the understanding of the marketplace. (textbook, pp. 7–10) 5 Core of customer and marketplace concepts  Customer needs (states of felt deprivation), wants (the form human needs take as they are shaped by culture and individual personality) ,and demands (Human wants that are backed by buying power)  Market offering - products, services and experiences (some combination of products, services, information or experiences offered to market to satisfy a need and want.)  Customer value and satisfaction are key building blocks for developing and managing customer relationships.  Exchange ( the act of obtaining a desired object form someone by offering something in return) and Relationship (Involving product, service, idea, or other object)  Markets is the set of actual and potential buyers of a product or service. 3. Identify the two key questions to answer in the design of a marketing strategy, and explain the five marketing management orientations that guide marketing strategy. (textbook, pp. 10–14) Two key questions  What customers will us serve ? (What’s our target market)?  How can we serve these customer? (What’s our value proposition)? Choosing a value proposition and Marketing Management Orientations Five marketing management orientations  The production concept  The product concept  The selling concept  The marketing concept  The societal marketing concept 4. Discuss strategies for building lasting and fruitful relationships with customers and partners. (textbook, pp. 14–23) Customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Customer engagement marketing aims to make a brand a meaningful part of consumer's conversations and lives through direct and continual customer involvement in shaping brand conversations, experiences. And community. The aims of customer relationship management and customer engagement is to produce high customer equity: the total combined customer lifetime values of all the company's customers. The key to building lasting relationships is the creation of superior customer value and satisfaction. MKTG 396 MIDTERM NOTES To build a good customer relationship, a good marketer should be working closely with marketing partner inside (company – different department, internally) and outside (supplier, channel partner and other, externally) the company to jointly bring more value to customer 5. Identify the outcomes of developing and maintaining lasting relationships with customers. (textbook, pp. 23–26)  Creating customer loyalty and retention – the value of the entire stream of purchases a customer makes over a lifetime of patronage.  Growing share of customer – the portion of the customer's purchasing that a company gets in its product categories.  Building customer equity – the total combined customer lifetime values of all the company's customers.  Building the right relationship with the right customer - Classifies customers into 4 relationship groups according to their profitability and projected loyalty.  Strangers show low potential profitability and little projected loyalty which a little fit between the company's offerings and needs.  Butterflies are potentially profitable but not loyal. There is a good fit between the company’s offerings and needs but just only short term!  True friends are both potential and loyal which is a strong fit and the firm wants to make continual relationship investments.  Barnacles are highly loyal but not profitable. There is a limited fit. Barnacles are perhaps the most problematic customers. Different types of customers require different relationship management strategies but the goal is to build the right relationships with the right customers. 6. Describe the major challenges facing marketers. (textbook, pp. 26–32) The major trends and forces that are changing the marketing landscape and challenging marketing strategy - 5 major developments  The digital age - online, mobile and social media marketing; the use of digital marketing tools in order to engage consumers anywhere and at any time via their digital devices.  The changing economic environment - Many consumers are reconsidering their definition of good life.  The growth of not for profit marketing- social marketing campaign  Rapid globalization - countries around the world are increasingly taking global viewing of the company's industry, competitors and forces affect businesses.  Ethics and Social responsibility - relationships with social values and responsibilities and with the Earth that sustain us. It is being call sustainable marketing Reviewing the Concepts LO1 Define Marketing and Outline the Steps in the Marketing Process. Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The marketing process involves five steps. The first four steps create value for customers. First, marketers need to understand the marketplace and customer needs and wants. Next, marketers design a customer-driven marketing strategy with the goal of getting, keeping, and growing target customers. In the third step, marketers construct a marketing program that actually delivers superior value. All of these steps form the basis for the fourth step, building profitable customer relationships and creating customer delight. In the final step, the company reaps the rewards of strong customer relationships by capturing value from customers. LO2 Explain the Importance of Understanding Customers and the Marketplace, and Identify the Five Core Marketplace Concepts. Outstanding marketing companies go to great lengths to learn about and understand their customers’ needs, wants, and demands. This understanding helps them design want-satisfying market offerings and build value-laden customer relationships by which they can capture customer lifetime value and greater share of customer. The result is increased long-term customer equity for the firm. The core marketplace concepts are needs, wants, and demands; market offerings (products, services, and experiences); value and satisfaction; exchange and relationships; and markets. Wants are the form taken by human needs when shaped by culture and individual personality. When backed by buying power, wants become demands. Companies address needs by putting forth a value proposition, a set of benefits that they promise to consumers to satisfy their needs. The value proposition is fulfilled through a market offering, which delivers customer value and satisfaction, resulting in long-term exchange relationships with customers. LO3 Identify the Key Elements of a Customer-Driven Marketing Strategy and Discuss the Marketing Management Orientations that Guide Marketing Strategy. To design a winning marketing strategy, the company must first decide whom it will serve. It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will cultivate (target marketing). Next, the company must decide how it will serve targeted customers (how it will differentiate and position itself in the marketplace). Marketing management can adopt one of five competing market orientations. The production concept holds that management’s task is to improve production efficiency and bring down prices. The product concept holds that consumers favor products that offer the most in quality, performance, and innovative features; thus, little promotional effort is required. The selling concept holds that consumers will not buy enough of an organization’s products unless it undertakes a large-scale selling and promotion effort. The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. The societal marketing concept holds that generating customer satisfaction and long-run societal well-being through sustainable marketing strategies are key to both achieving the company’s goals and fulfilling its responsibilities. LO4 Discuss Customer Relationship Management and Identify Strategies for Creating Value for Customers and Capturing Value From Customers in Return. Broadly defined, customer relationship management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Customer-engagement marketing aims to make a brand a meaningful part of consumers’ conversations and lives through direct and continual customer involvement in shaping brand conversations, experiences, and community. The aim of customer relationship management and customer engagement is to produce high customer equity: the total combined customer lifetime values of all the company’s customers. The key to building lasting relationships is the creation of superior customer value and satisfaction. Companies want to not only acquire profitable customers but also build relationships that will keep them and grow “share of customer.” Different types of customers require different customer relationship management strategies. The marketer’s aim is to build the right relationships with the right customers. In return for creating value for targeted customers, the company captures value from customers in the form of profits and customer equity. In building customer relationships, good marketers realize that they cannot go it alone. They must work closely with marketing partners inside and outside the company. In addition to being good at customer relationship management, they must be good at partner relationship management. LO5 Describe the Major Trends and Forces that are changing the Marketing Landscape in this Age of Relationships