Chp1- Marketing: engaging customer and managing profitable customer relationship.
Goal for marketing: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by
delivering satisfaction.
What is Marketing is a process by which companies create value for customers and build strong customer relationships
to capture value from customers in return.
Marketing process ?
1. Understanding the Marketplace and Customer Needs and want.
2. Design a Customer value driven Marketing Strategy
3. Construct an Integrated Marketing program that deliver superior value.
4. Building profitable Relationships and create customer delight
5. Capturing Value from Customers to create profits and customer equity
Five core customer and marketplace concepts:
1. Customer Needs, Wants, and Demands
2. Market Offerings: Products, Services and Experiences
3. Customer Value and Satisfaction
4. Exchanges and relationship
5. Market
1- Understanding the Marketplace and Customer Needs and want.
(i) Needs : States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
• Want: Form that needs take as they are shaped by culture and individual personality
• Demands : Wants backed by buying power .
Example: Needs transportation . want car . demands buy car that I want.
(ii) Market offerings are some combination of products, services, information, or experiences offered to a market to
satisfy its needs or wants.
Marketing myopia: the mistake of paying more attention to the specific products a company offers than to the benefit
and experiences produced these products.
(iii) Customer Value & Satisfaction Satisfied customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the product to others.
(iv) Exchange is the act of obtaining a desired object from someone by offering something in return.
(v) A market is the set of actual and potential buyers of a product or service.
Marketing management: art and science of choosing target market and building profitable relationship with them.
2- Designing a Customer Value-Driven Marketing Strategy
(i) Marketing management is the art and science of choosing target markets and building profitable relationships with
them.
.Market segmentation refers to dividing the markets into segments of customers )ii(
To design a winning marketing strategy the marketing manager must answer two important question:
What customers will we serve ( what’s our target market)
How can we serve these customers best ( what’s our value proposition)
The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs.
For example- BMW promises “ the ultimate driving machine’’
Five alternative concepts ( Marketing management orientation) :
[Link] concept: is the idea that consumers will favor products that are available and highly affordable and that the
organization should therefore focus on improving production and distribution efficiency. Example: (Lenovo computers
in China market: low price and high production efficiency). Works best when demand exceeds supply. However, this
concept can lead to marketing .
2. Product concept is the idea that consumers will favor products that offer the most quality, performance, and features.
An organization should therefore devote its energy to making continuous product improvements. works
best when demand = supply . Focusing on product quality & improvement , also lead to marketing myopia .
3. Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale
selling and promotion effort. (inside out). works when supply exceeds demand; however, carries high risks. Example :
insurance or blood donation
4. 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. ( outside ) . Under this concept,
customer focus and value are the path to sales & profits. The job is not to find the right customers for your product but to
find the right product for your customers.
5-The societal marketing concept is the idea that a company’s marketing decisions should consider consumers’ wants,
the company’s requirements, consumers’ long-term interests, and society’s long-term interests.
Three consideration underlying the societal marketing concept?
1. society ( Human welfare)
2. consumers (want satisfaction )
3. company ( profits )
3- Preparing an Integrated Marketing Plan and Program
(i) 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.
1. Product: the firm must first create a need satisfying market offering.
2. Price: it must decide how much it will charge for the offering .
3. Place : make the offering available to target consumers
4. Promotion: must communicate with target customer about the offering and persuade them
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 ( most important concept). The difference between
total customer perceived benefits and customer cost
(i) Customer- perceived value : The customers evaluation of the difference between all the benefits and all the costs of a
marketing offers relative to those of competing offers. The extent to which perceived performance matches a buyer’s
expectations
(ii)Customer satisfaction: The extent to which a product’s perceived performance matches a buyer’s expectations .
if they set expectation too low they satisfy those who buy but fail to attract enough buyers.
If they raise expectation too high buyers will be disappointed.
Value=benefit –( cost , time , effort )
Satisfaction = expectation performance
Expectation = performance ( satisfy)
performance اقلExpectation ( dissatisfy)
performance اكبرExpectation ( delight )
Customer Relationship Levels and Tools:
• Basic Relationships : low-margin per customer instant sized customer base … Unilever does not telephone, all
of its Dove customers
• Full Partnerships : Few costumers and high margins, … Unilever costumers teams works closely with
Carefour, Geant, Watani.
• Frequency marketing programs : high value and satisfaction , marketers can use specific marketing tools to
develop stronger bonds with customers that customers who buy frequently or in large amounts. … Airlines
offers frequent- flyer programs.
• Other companies sponsor club marketing programs: that offer members special benefits and create member
communities. Apple encourages customers to form local Apple user groups.
Customer – engagement marketing: making the brand a meaningful part of consumers’ conversations and lives by
fostering direct and continuous customers involvement in shaping brand conversation, experiences and community. For
example – twitter, facebook, Instagram etc..
By intrusion: they must practice marketing by attraction – creating market offerings and messages that involve
consumers ( example : Online social networks, or creating communities of their own).
Internet and social media: given a huge boost to customer engagement marketing.
Customer generated marketing: brand exchanges created by consumers themselves - both invited and uninvited by
which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers.
Partners relationship management : working closely with partners in others company departments and outside the
company to jointly bring greater value costumers.
1. Partners Inside the Company: Company departments, employee .
2. Marketing Partners Outside the Company : suppliers , marketing intermediaries.
Supply chain: longer channel, stretching from raw materials to components to final products that are carried to final
buyers.
Supply chain management : strengthening their connections with their partners all along the supply chain.
Customers lifetime value – the value of entire stream of purchase that the customers would make over lifetime of
patronage.
Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. .” Car
”.companies want to increase “share of garage,” and airlines want greater “share of travel
Customer equity is the total combined customer lifetime values of all of the company’s customers.
Different type of customers required different relationship management strategies.
Butterflies : good fit between company’s offering and customer need. High profit potential.
Suggestion: enjoy while they last. Example: stock market investors.
Strangers: little fit between company’s offering and customer need . Lowest profit potential.
Suggestion : Trying to become more profitable. Example: barging hunters
True Friends: strong fit between company’s offering and customer need. Highest profit potential.
Suggestion: who come back regularly and tell others about good experience with company. Example: VIP customer
Barnacles : Limited fit between company’s offering and customer need. Low profit potential.
Suggestion: fine (raising their fees reducing service ) . Example: Basic account bank .
- The Changing Marketing Landscape
1-The Digital Age –Digital and social media marketing involves using digital marketing tools such as web sites,
social media, mobile ads and apps, online videos, e-mail, and blogs that engage consumers anywhere, at any time, via
their digital devices. Social media - Mobile marketing
2- Not for profit Marketing growth- , such as colleges, hospitals, museums, zoos, symphony orchestras,
foundations, and even churches. The nation’s not-for-profits face stiff competition for support and
membership. For example- buy one glass and another for needy person
3- Global Competition- marketers are also taking a fresh look at the ways in which they relate with the broader
world around them
4- Sustainable Marketing - worldwide consumerism and environmentalism movements mature