Transcript marketing: managing profitable customer relationships

MARKET
Individuals and organizations who are
interested and willing to buy a particular
product to obtain benefits that will satisfy
a specific need or want, and who have
the resources (time, money) to engage
in such a transaction. (Mullins et.al.)
 The set of all actual and potential buyers
(and users-JK) of a particular product or
service. (Kotler & Armstrong)
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MARKETING

An organizational function and a set of
processes for creating, communicating,
and delivering value to customers and
for managing customer relationships in
ways that benefit the organization and
its stake holders. (AMA’s 2004 definition)
MARKETING (AMA’s definitions)
1935: The performance of business activities
that direct the flow of goods and services
from producers to consumers.
1960: No change on the 1935 definition.
1985:The process of planning and executing
the conception, pricing, promotion, and
distribution of ideas, goods, and services to
create exchanges that satisfy individual
and organizational goals.
CUSTOMER VALUE
The customer’s perception of what the
product or service is really worth. (Mullins
et.al.)
 A ratio between what the customer gets
and what they gives. (Kotler)

CUSTOMER RELATIONSHIP MANAGEMENT
(CRM) is the overall process of building
and maintaining profitable customer
relationships by delivering superior
customer value and satisfaction.
 EXCHANGE is the act of obtaining a
desired object from someone by offering
something in return.

CUSTOMER NEED - SATISFACTION PROCESS
CONSUMPTION
ACTUAL VALUE
COMPETITOR'S
SALES VOLUME
SALES FOR
SPECIFIC PRODUCT
BUYING DECISION
PROCESS
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DEMAND
UNSATISFIED
EXPECTED VALUE
BUYING POWER
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CULTURE, SOCIAL, TECHNOLOGY
PERSONALITY
NEED
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Needs - state of felt deprivation for
basic items such as food and clothing
and complex needs such as for
belonging. i.e. I am hungry.
Wants - form that a human need takes
as shaped by culture and individual
personality. i.e. I want a hamburger,
French fries, and a soft drink.
Demands - human wants backed by
buying power. i.e. I have money to buy
this meal.
CUSTOMER SATISFACTION
A person’s feeling of pleasure or
disappointment resulting from comparing a
product’s perceived performance (or
outcome) in relation to his or her
expectations (Kotler & Keller, p.136)
 Measuring Satisfaction: (-----, p.138)
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› Periodic survey
› Customer lost rate
› Mystery shoppers
CUSTOMER VALUE MIGRATION
The process of customers shifting their
purchases away from products generated
by outmoded business designs to new ones
that offer superior value. (Cravens & Piercy)
 The driving forces:
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› Technological changes
› Economical changes
› Cultural changes
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PRODUCTION CONCEPT. The idea that
consumers will favor products that are
available and highly affordable.
PRODUCT CONCEPT. The idea that consumers
will favor products that offer the most in quality,
performance, and features and that the
organization should therefore devote its energy
to making continuous product improvements.
SELLING CONCEPT. The idea that consumers will
not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion
effort.

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MARKETING CONCEPT. The marketing
management philosophy that holds that
achieving organizational goals depends on
knowing the needs and wants of target
markets and delivering the desired satisfactions
better than competitors do.
SOCIETAL MARKETING CONCEPT. A principle of
enlightened marketing that holds that a
company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’ longrun interests, and society’s long-run interests.
Company
(Marketing)
Marketing
Intermedianries
Suplliers
Competitors
End User
Create value for customers and build customer relationships
Understand the
marketplace and
customer needs
and wants
Design a
customer-driven
marketing
strategy
Build profitable
relationships and
create customer
delight
Construct a
marketing program
that delivers
superior value
Capture value from customers in return (create profits and
customer equity)