Relationship Marketing: Customer Value and Satisfaction - Marketing Blog
Relationship Building Blocks: Customer Value and Satisfaction. Customer- perceived value. The difference between total customer value and total customer cost. Relationship building blocks: Customer value and satisfaction The key to building lasting customer relationships is to create superior customer value and. Designing a Customer-Driven Marketing Strategy. • Preparing an Customer Value and Satisfaction. Customers Relationship building blocks;. • Customer.
This five-step process forms the marketing frame work for the rest of the chapter and the remainder of the text. Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.
Marketers Set the right level of expectations Not too high or low 12 Exchanges and Relationships the act of obtaining a desired object from someone by offering something in return Relationship Marketing actions try to create, maintain, grow exchange relationships.
Walmart cannot fulfill its promise of low prices unless its suppliers provide low costs. Ford cannot deliver a high-quality car-ownership experience unless its dealers provide outstanding service. Arrows represent relationships that must be developed and managed to create customers value and profitable customer relationships. Markets are the set of actual and potential buyers of a product.
Relationship Marketing: Customer Value and Satisfaction
Ch7 15 Selecting Customers to Serve Market segmentation refers to dividing the markets into segments of customers. Target marketing refers to which segments to go after.
The Production Concept The production concept holds that consumers will favor products that are available and highly affordable. The Product Concept The product concept holds that consumers will favor products that offer the most quality, performance, and features.
Focus is on continuous product improvements. The aim is to sell what the company makes rather than making what the customer wants.
The marketing concept takes an outside-in view that focuses on satisfying customer needs as a path to profits. It includes product, price, promotion, and place. The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.
Price Product Promotion Place 20 Building Customer Relationships Customer Relationship Management CRM In this broader sense, customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Many companies offer frequency marketing programs that reward customers who buy frequently or in large amounts. Companies want to build strong relationships by consistently delivering superior customer value. All rights reserved 9 As shown in Figure 1. These buyers share a particular need or want that can be satisfied through exchange relationships.
Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities. Consumers market when they search for products, interact with companies to obtain information, and make their purchases. Marketing involves serving a market of final consumers in the face of competitors.
Marketing:Creating and Capturing Customer Value
The company and competitors research the market and interact with consumers to understand their needs. Then they create and send their market offerings and messages to consumers, either directly or through marketing intermediaries.
Each party in the system adds value for the next level. The arrows represent relationships that must be developed and managed. All rights reserved 10 2-Designing a Customer-Driven Marketing Strategy Marketing management is the art and science of choosing target markets and building profitable relationships with them What customers will we serve?
How can we best serve these customers? Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after Now that the company fully understands its consumers and the marketplace, it must decide which customers it will serve and how it will bring them value.
To design a winning marketing strategy, the marketing manager must answer two important questions: Have the student evaluate one of the following value propositions in terms of how well the company delivers on the proposition.
Value propositions differentiate one brand from another. All rights reserved 12 Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal concept Marketing management wants to design strategies that will build profitable relationships with target consumers. But what philosophy should guide these marketing strategies? What weight should be given to the interests of customers, the organization, and society?
Very often, these interests conflict. There are five alternative concepts under which organizations design and carry out their marketing strategies: All rights reserved 13 Marketing Management Orientations a Production concept: Consumers will favor products that are available and highly affordable b Product concept: Consumers favor products that offer the most quality, performance, and features Focus is on continuous product improvements The production concept holds that consumers will favor products that are available and highly affordable.
Therefore, management should focus on improving production and distribution efficiency. This concept is one of the oldest orientations that guides sellers. The production concept is still a useful philosophy in some situations. However, although useful in some situations, the production concept can lead to marketing myopia.
Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective—satisfying customer needs and building customer relationships.
All rights reserved 14 Marketing Management Orientations c Selling concept: Knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do The selling concept is typically practiced with unsought goods—those that buyers do not normally think of buying, such as insurance or blood donations.
Such aggressive selling, however, carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships. The aim often is to sell what the company makes rather than making what the market wants. It assumes that customers who are coaxed into buying the product will like it.
These are usually poor assumptions. All rights reserved 15 Marketing Management Orientations e Societal marketing: Make good marketing decisions by considering: What do these companies do that ties to the societal marketing concept? Students might be familiar with many different companies that practice societal marketing through their Corporate Social Responsibility CSR initiatives.
Students might be familiar with local retailers who are also involved in societal marketing. They will note that these companies donate, contribute, or offer services to charities and not-for-profit organizations.
- Chapter 1 Marketing: Creating and Capturing Customer Value
- “Marketing” Creating Customer Value and Satisfaction
It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.
Even more broadly, many leading business and marketing thinkers are now preaching the concept of shared value, which recognizes that societal needs, not just economic needs, define markets. All rights reserved 16 Designing a Customer-Driven Marketing Strategy Note to Instructor This slide shows companies should balance three considerations in setting their marketing strategies. Now, the company develops marketing plans and programs—a marketing mix—that will actually deliver the intended customer value.
Discussion Question Ask students how the societal concept influences their buying decisions including brand selection and where they make purchases. It includes product, price, promotion, and place. Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers. The marketing program builds customer relationships by transforming the marketing strategy into action.
The major marketing mix tools are classified into four broad groups, called the four Ps of marketing: To deliver on its value proposition, the firm must first create a need-satisfying market offering product. It must then decide how much it will charge for the offering price and how it will make the offering available to target consumers place.
Marketing:Creating and Capturing Customer Value - ppt video online download
Finally, it must communicate with target customers about the offering and persuade them of its merits promotion. The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.
All rights reserved 18 4-Building Customer Relationships Customer Relationship Management CRM The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction The first three steps in the marketing process—understanding the marketplace and customer needs, designing a customer-driven marketing strategy, and constructing a marketing program—all lead up to the fourth and most important step: Customer Relationship Management Customer relationship management is perhaps the most important concept of modern marketing.
Some marketers define it narrowly as a customer data management activity a practice called CRM. By this definition, it involves managing detailed information about individual customers and carefully managing customer touchpoints to maximize customer loyalty. Most marketers, however, give the concept of customer relationship management a broader meaning.
In this broader sense, customer relationship management is 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, and growing customers. All rights reserved 19 Relationship Building Blocks: Satisfied customers are more likely to be loyal customers and give the company a larger share of their business. Attracting and retaining customers can be a difficult task.
Customers often face a bewildering array of products and services from which to choose. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. Outstanding marketing companies go out of their way to keep important customers satisfied. Most studies show that higher levels of customer satisfaction lead to greater customer loyalty, which in turn results in better company performance.
Smart companies aim to delight customers by promising only what they can deliver and then delivering more than they promise. For companies interested in delighting customers, exceptional value and service become part of the overall company culture. Although a customer-centered firm seeks to deliver high customer satisfaction relative to competitors, it does not attempt to maximize customer satisfaction. A company can always increase customer satisfaction by lowering its price or increasing its services.
But this may result in lower profits. Thus, the purpose of marketing is to generate customer value profitably. This requires a very delicate balance: All rights reserved 20 Building Customer Relationships Customer Relationship Levels and Tools Basic Relationships Full Partnerships Note to Instructor Companies can build customer relationships at many levels, depending on the nature of the target market.