Marketing
Definition: the art and science of finding, retaining and growing profitable customers.
Create value for customers and build customer relationships
1. Understand the marketplace and customer wants and needs.
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 in return: capture value from customers to create profits and
customer equity.
4 steps
1. Segmentation
2. Targeting
3. Differentiating
4. Positioning
4 service characteristics
3 types of marketing
,Internal marketing
Internal marketing is marketing aimed at the firm’s employees. Employee satisfaction and customer
satisfaction are correlated. In the hospitality industry employees are part of the product. Marketers
must develop techniques and procedures to ensure that employees are able and willing to deliver
quality service.
Customer needs, wants and demands
- Human need: A state of felt deprivation in a person. There are esteem needs and individual
needs.
- Human want: The form that a human need takes when shaped by culture and individual
personality. Wants are how people communicate their needs.
- Demands: human wants that are backed by buying power.
Customer value and satisfaction
- Customer value is the difference between the benefits that the customer gains from owning
and/or using a product and the costs of obtaining the product.
- Customer expectations are based on past buying experiences, the opinions of friends, and
market information.
- Satisfaction with a product is determined by how well the product meets the customer’s
expectations for that product.
Exchanges and relationships
1. Exchange is the act of obtaining a desired object from someone by offering something in
return.
2. Relationship marketing focuses on building a relationship with a company’s profitable
customers. Most companies are finding that they earn a higher return from resources invested
in getting repeat sales from current customers than from money spent to attract new
customers.
3. Designing customer-driven marketing strategy. Marketing management is the art and science
of choosing target markets and building profitable relationships with them.
a. Selecting customers to serve. The company must select those market segments it
wishes to serve.
b. Choosing a value proposition. The company must also decide how it will serve
targeted customers - how it will differentiate and position itself in the marketplace. A
company’s value proposition is the set of benefits or values it promises to deliver to
consumers to satisfy their needs.
Build customer relationships
Customer relationship management (CRM) involves managing detailed information about individual
customers and carefully managing customer “touch points” in order to maximize customer loyalty.
We try to capture value from our customers in the form of current and future sales, market share, and
profits. By creating superior customer value, the firm creates highly satisfied customers who stay
loyal and buy more.
, - Customer loyalty and retention. The benefits of customer loyalty come from continued
patronage of loyal customers, reduced marketing costs, decreased price sensitivity of loyal
customers, and partnership activities of loyal customers. Loyal customers purchase from the
business they are loyal to more often than non-loyal customers. They also purchase a broader
variety of items. Reduced marketing costs are the result of requiring fewer marketing dollars
to maintain a customer than to create one and the creation of new customers through the
positive word of mouth of loyal customers.
- Growing share of customers. Beyond simply retaining good customers to capture customer
lifetime value (LTV), good CRM can help marketers to increase their share of customers - the
share they get of the customer’s purchasing in their product categories.
- Building customer equity. Customer equity is the discounted LTVs of all the company’s
current and potential customers. One builds customer equity by delivering products that create
high customer satisfaction and have high perceived value.
The service profit chain
1. Internal service quality: superior employee selection and training, a quality work
environment, and strong support for those dealing with customers, which results in..
2. Satisfied and productive service employees: more satisfied, loyal, and hardworking
employees, which results in..
3. Greater service value: more effective and efficient customer value creation and
service-delivery, which results in..
4. Satisfied and loyal customers: satisfied customers who remain loyal, repeat purchase, and
refer other customers, which results in..
5. Healthy service profits and growth: superior service firm performance.
Managing perceived risk
The high risk that people perceive when purchasing hospitality products increases loyalty to
companies that provided them with a consistent product in the past.
Managing capacity and demand
Because services are perishable, managing capacity and demand is a key function of hospitality
marketing. First, services must adjust their operating systems to enable the business to operate at
maximum capacity. Second, they must remember that their goal is to create satisfied customers.
Research has shown that customer complaints increase when service firms operate above 80% of their
capacity.
Definition: the art and science of finding, retaining and growing profitable customers.
Create value for customers and build customer relationships
1. Understand the marketplace and customer wants and needs.
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 in return: capture value from customers to create profits and
customer equity.
4 steps
1. Segmentation
2. Targeting
3. Differentiating
4. Positioning
4 service characteristics
3 types of marketing
,Internal marketing
Internal marketing is marketing aimed at the firm’s employees. Employee satisfaction and customer
satisfaction are correlated. In the hospitality industry employees are part of the product. Marketers
must develop techniques and procedures to ensure that employees are able and willing to deliver
quality service.
Customer needs, wants and demands
- Human need: A state of felt deprivation in a person. There are esteem needs and individual
needs.
- Human want: The form that a human need takes when shaped by culture and individual
personality. Wants are how people communicate their needs.
- Demands: human wants that are backed by buying power.
Customer value and satisfaction
- Customer value is the difference between the benefits that the customer gains from owning
and/or using a product and the costs of obtaining the product.
- Customer expectations are based on past buying experiences, the opinions of friends, and
market information.
- Satisfaction with a product is determined by how well the product meets the customer’s
expectations for that product.
Exchanges and relationships
1. Exchange is the act of obtaining a desired object from someone by offering something in
return.
2. Relationship marketing focuses on building a relationship with a company’s profitable
customers. Most companies are finding that they earn a higher return from resources invested
in getting repeat sales from current customers than from money spent to attract new
customers.
3. Designing customer-driven marketing strategy. Marketing management is the art and science
of choosing target markets and building profitable relationships with them.
a. Selecting customers to serve. The company must select those market segments it
wishes to serve.
b. Choosing a value proposition. The company must also decide how it will serve
targeted customers - how it will differentiate and position itself in the marketplace. A
company’s value proposition is the set of benefits or values it promises to deliver to
consumers to satisfy their needs.
Build customer relationships
Customer relationship management (CRM) involves managing detailed information about individual
customers and carefully managing customer “touch points” in order to maximize customer loyalty.
We try to capture value from our customers in the form of current and future sales, market share, and
profits. By creating superior customer value, the firm creates highly satisfied customers who stay
loyal and buy more.
, - Customer loyalty and retention. The benefits of customer loyalty come from continued
patronage of loyal customers, reduced marketing costs, decreased price sensitivity of loyal
customers, and partnership activities of loyal customers. Loyal customers purchase from the
business they are loyal to more often than non-loyal customers. They also purchase a broader
variety of items. Reduced marketing costs are the result of requiring fewer marketing dollars
to maintain a customer than to create one and the creation of new customers through the
positive word of mouth of loyal customers.
- Growing share of customers. Beyond simply retaining good customers to capture customer
lifetime value (LTV), good CRM can help marketers to increase their share of customers - the
share they get of the customer’s purchasing in their product categories.
- Building customer equity. Customer equity is the discounted LTVs of all the company’s
current and potential customers. One builds customer equity by delivering products that create
high customer satisfaction and have high perceived value.
The service profit chain
1. Internal service quality: superior employee selection and training, a quality work
environment, and strong support for those dealing with customers, which results in..
2. Satisfied and productive service employees: more satisfied, loyal, and hardworking
employees, which results in..
3. Greater service value: more effective and efficient customer value creation and
service-delivery, which results in..
4. Satisfied and loyal customers: satisfied customers who remain loyal, repeat purchase, and
refer other customers, which results in..
5. Healthy service profits and growth: superior service firm performance.
Managing perceived risk
The high risk that people perceive when purchasing hospitality products increases loyalty to
companies that provided them with a consistent product in the past.
Managing capacity and demand
Because services are perishable, managing capacity and demand is a key function of hospitality
marketing. First, services must adjust their operating systems to enable the business to operate at
maximum capacity. Second, they must remember that their goal is to create satisfied customers.
Research has shown that customer complaints increase when service firms operate above 80% of their
capacity.
