Crafting Customer-Centric Marketing Strategies

Lecture 2 Marketing: Creating and Capturing Customer Value

Recap Marketing is a process by which companies create value and build strong relationships in order to capture value from customer in return. Marketing Process Step 1: Understanding the marketplace and customer needs and wants Step 2: Design a customer Driven Marketing Strategy Step 3: Construct an integrated superior value Step 4: Build profitable relationships and create customer delight Step 5: Capture value from customers to create profits and customer equity marketing program that delivers

Step 1: Understanding the marketplace and customer needs and wants Need, want and Demand Need: State of felt deprivation Want: The form human needs take as shaped by culture and personality Demands: Human wants that are backed by buying power Market Offering Combination of products, services, information or experiences that satisfy a need or want Offer may include services, activities, people, places, information or ideas Value & Satisfaction Customers form expectations regarding value Marketers must deliver value to consumers A satisfied customer will buy again and tell others about their good experience Market Set of actual and potential buyers of a product

Step 2: Design a customer Driven Marketing Strategy 1.What customers will we serve? Marketers select customers that can be served profitably Value Proposition 2.How can we serve these customers best? Includes the set of benefits or values a company promises to deliver to consumers to satisfy their needs

Step 2: Design a customer Driven Marketing Strategy Philosophies for designing Marketing Strategy Production concept Product concept Selling concept Marketing concept Societal concept

Step 2: Design a Customer Driven Marketing Strategy Production concept: Consumers favor product that are easily available and affordable Production and operations efficiency Example: Lenovo Customer satisfaction may be overlooked

Step 2: Design a customer Driven Marketing Strategy Product Concept Consumer will favor products that offer the most in quality , performance and innovative features. Marketing Myopia Kodak , Nokia

Step 2: Design a Customer Driven Marketing Strategy Selling Concept Emphasizes large scale selling and promotion effort Example: Insurance companies Overlooks relationship building Sell what you make rather than what market wants

Step 2: Design a Customer Driven Marketing Strategy Marketing Concept Holds that organizational goals depends on knowing the needs & wants of target markets & Deliver them the desired satisfaction better than competitors. Example: Diet Coke May overlook society

Step 2: Design a Customer Driven Marketing Strategy Societal Concept Marketing strategy should deliver value to customers in a way that maintains or improves both consumer and society wellbeing. Example: Johnson and Johnson s

Step 3: Construct an integrated marketing program that delivers superior value Integrated Marketing is an approach to creating a unified and seamless experience for consumers to interact with the brand/enterprise Marketing Mix Tools Product Price Place Promotion

Step 4: Build profitable relationships and create customer delight CRM: The Overall process of building and maintaining profitable relationships by delivering superior customer value and satisfaction. Customer Value Customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competiting offers Irrationality of customer Customer Satisfaction The extent to which a product s perceived performance matches a buyer expectation High satisfaction leads to high loyalty

Step 4: Build profitable relationships and create customer delight

Step 4: Build profitable relationships and create customer delight Partner Relationship Management Inside partners a holistic approach to marketing Outside partners distributors, retailers

Step 5: Capture value from customers to create profits and customer equity Customer Loyalty and Retention Creating delight Capitalizing on stream of purchases Share of Customer: A company s share in customer s purchasing in their product category Example: Amazon Customer Equity: It is the total combined Customer lifetime values of all of the company s customers. Better measure of profitability than current sales