customer relationship management and marketing

7/30/2019 Customer relationship management and marketing

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Chapter One

Marketing: Creating and Capturing

Customer Value


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Creating and Capturing CustomerValue

What Is Marketing?

Understand the Marketplace and Customer Needs

Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program

Building Customer Relationships

Capturing Value from Customers

The Changing Marketing Landscape

Topic Outline


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What Is Marketing?

Marketing is a process by which

companies create value for customers and

build strong customer relationships to

capture value from customers in return


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What Is Marketing?

Marketing is a process by which

companies create value for customers and

build strong customer relationships to

capture value from customers in return


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Understanding the Marketplaceand Customer Needs

Customer needs, wants, and demands

Market offerings Value and satisfaction

Exchanges and relationships

Markets

Core Concepts


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Understanding the Marketplaceand Customer Needs

Customer Needs, Wants, and Demands


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Given their wants and resources, people demand products or

services with benefits that add up to the most value and

satisfaction

The best marketing companies go to great lengths to learn andunderstand their customers' needs, wants and demands

Understanding the Marketplaceand Customer NeedsCustomer Needs, Wants, and Demands


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Needs and wants are fulfilled through MARKET OFFERINGS

Case in Point: The Dawn News advertisement

Strengthening the pillar of good governance upon which rests the

future of an enlightened state....

The offering here is reliable news which has a comprehensive

relationship with good governance and and enlightened state

Understanding the Marketplace

and Customer Needs


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Needs and wants are fulfilled through MARKET OFFERINGS

Case in Point: The Dawn News advertisement

Strengthening the pillar of good governance upon which rests the

future of an enlightened state....

The offering here is reliable news which has a comprehensive

relationship with good governance and and enlightened state


and Customer Needs


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and Customer NeedsMarket offerings are some combination of products,services, information, or experiences offered to a market tosatisfy a need or want. Eg. Banking, air-travel, hotel stays,

tourism, etc.

Marketing myopia is focusing only on existing wants andlosing sight of underlying consumer needs.

Eg. Lack of Innovation: Tape recorders Music systemsWalkman CDman iPod Live streaming music on theinternet.


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Customers form expectations about value and satisfaction that

various market offerings will deliver and buy accordinglyExpectation creation about value and satisfaction by marketers

must be judiciously decided

Satisfied customers buy again and again and spread a positive

word of mouth

Dissatisfied customers switch to competitors and disparage the

product to others


and Customer Needs

Customer Value and SatisfactionExpectations


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and Customer Needs

Customer Value and SatisfactionExpectations

Too low expectations

satisfy those who

consume but not attractnew consumers

Too high expectations

Customers / Consumers

might be disappointed


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Exchange is the act of obtaining a desired object from someone byoffering something in return

A marketer tries to bring about a response to some market offering. The

response may be more than buying or trading products and services

Political candidate Votes

Religious group Memberships

Musical troupe audience

Social action group acceptance (Jan Lokpal, Narmada

Bachao Andolan)


and Customer Needs

Marketing occurs when people decide to satisfy

needs and wants through exchange relationships


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and Customer Needs

Markets are the set of actual and potential buyers of a

product

SUPPLIERS

Competitors

Company

Marketing

IntermediariesCONSUMERS

Major Environmental Forces

(Demographic, economic, technological,

Politico-legal, socio-cultural)


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Assignments

1. Visit website of Maruti Udyog Ltd. And answer the following

questions:

A. What needs, wants and/or demands is Maruti attempting to fill

B. Describe their marketing offers

C. Describe the relationship that they have with their customers

D. What are their markets

2. Visit India website of eBay and answer the following questions

A. How is eBay providing value to its customers

B. Describe the relationships they have with their customers

C. What are their markets


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Designing a Customer-Driven

Marketing Strategy

Marketing management is the art and

science of choosing target markets andbuilding profitable relationships with them

What customers will we serve?

How can we best serve these customers?


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Designing a Customer-DrivenMarketing Strategy

Market segmentation refers to dividing the

markets into segments of customers

Target marketing refers to which segments to

go after

Selecting Customers to Serve


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Demarketing is marketing to reduce demand temporarily or

permanently; the aim is not to destroy demand but to reduce

or shift it

(Amusement Parks, Goa in the Rains)

Selecting Customers to Serve


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Choosing a Value Proposition

The value proposition is the set of benefits or values a

company promises to deliver to customers to satisfy their

needs

BMW promises the ultimate driving machine

Indica V2 promises more car per car

Such value propositions differentiate one brand from the

other


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Class Assignment

In groups of 4 develop a marketing plan for a

company producing and marketing organic

food.Who is your target market

How will you enable customers to get the

best value

Develop value proposition of your offering

for this target market


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Marketing Management Orientations


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Marketing Strategy

Production concept is the idea that consumers will favor products that are

available or highly affordable

One of the oldest orientations that guides sellers

Useful in highly competitive and price sensitive markets (PC Markets of

Lenovo in China)

This concept can lead to marketing myopia

Companies adopting this orientation run a major risk of focussing too

narrowly on their own operations and losing sight of satisfying

customer needs and building customer relationships



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Marketing Strategy

Product concept is the idea that consumers will favor products

that offer the most quality, performance, and features.

Organization should therefore devote its energy to makingcontinuous product improvements.

Here again, focus on the product may lead to marketing myopia

Even improved products might not sell if unless they are designed,

packaged and priced attractively.



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Selling concept is the idea that consumers will not buy enough of

the firms products unless it undertakes a large scale selling and

promotion effortSuch orientation is for products which are not sought popularly.

(Insurance)

Here prospects have to be tracked down and products sold on

benefits

The flaw is that this orientation focusses on sales transactions than

on building long-term, profitable customer relationships



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Marketing concept is the idea that achieving organizational goals

depends on knowing the needs and wants of the target markets and

delivering the desired satisfactions better than competitors do

Instead of a product-centered make & sell philosophy, the marketing

concept is a customer-centered sense and respond philosophy

The marketing concept starts with a well defined market, focusses on

customer needs and integrates all marketing activities that affect

customers

In turn, it yields profits by creating lasting relationships with the right

customers based on customer value and satisfaction


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Societal marketing concept is the idea that a company should make

good marketing decisions by considering consumers wants, the

companys requirements, consumers long-term interests, and societys

long-run interests

Society (Human Welfare)

Consumers

(Satisfaction)

Company (Profits)

Societal

Marketing

Concept


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The Marketing Mix is the set of tools (four Ps) the firm uses to

implement its marketing strategy. It includes product, price,

promotion, and place.

To deliver on its value proposition, the firm must first create aneed satisfying market oferring (Product)

It must then decide how much it will charge for the offering (Price)

and how it will make the offering available to target customers

(Place)Finally, it must must communicate with target customers about

the offering and persuade them of its merits (Promotion)

Preparing an Integrated Marketing

Plan and Program


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Preparing an Integrated Marketing

Plan and ProgramIntegrated Marketing Communication (IMC)program is a

comprehensive plan that communicates and delivers the

intended value to chosen customers.

Communication channels include: Advertising, Personal selling,Public Relations (PR), Direct Marketing & Sales promotions


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CRM is the most important concept of modern marketing

The overall process of building and maintaining profitable customer

relationships by delivering superior customer value and

satisfaction

It deals with all aspects of acquiring, keeping & growing customers

Relationship building blocks: CUSTOMER VALUE & SATISFACTION

Customer Relationship Management (CRM)


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Relationship Building Blocks: Customer Value and

SatisfactionThe key to building lasting customer relationships is to create superior

customer value and satisfaction

Customer value: This is the customer's evaluation of the difference between

all the benefits and all the costs of a market offering relative too those ofcompeting offers.

Customers, often, do not judge values and costs accurately or objectively

Customers act on Customer Perceived Value


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Relationship Building Blocks: Customer Value and

Satisfaction


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Customer Relationship Levels and Tools


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Relating with more carefully selected customers uses selectiverelationship management to target fewer, more profitable

customers Relating more deeply and interactively by incorporating more

interactive two way relationships through blogs, Websites,online communities and social networks

The Changing Nature of CustomerRelationships


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Partner relationship management involves working closely with

partners in other company departments and outside the

company to jointly bring greater value to customers



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Partners inside the company is every function area interacting

with customers

Electronically

Cross-functional teams

Partners outside the company is how marketers connect with

their suppliers, channel partners, and competitors by

developing partnerships

Partner Relationship Management


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Supply chain is a channel that stretches from raw materials to

components to final products to final buyers

Supply management

Strategic partners

Strategic alliances

Partner Relationship Management


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Customer lifetime value is the value of the entire stream of

purchases that the customer would make over a lifetime ofpatronage

Creating Customer Loyalty and Retention


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Share of customer is the portion of the customers purchasing that

a company gets in its product categories

Growing Share of Customer


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Capturing Value from

CustomersCustomer equity is the total combined customer lifetime

values of all of the companys customers


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Building the right relationships with the right customersinvolves treating customers as assets that need to be managed

and maximized Different types of customers require different relationship

management strategies

Build the right relationship with the right customers

Building Customer Equity


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The Changing Marketing

Landscape

Major Developments

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