Marketing: Creating Customer Value and Engagement

BUS 131 Marketing Principles - Chapter 01: Creating Customer Value and Engagement

1.1 Defining Marketing and the Marketing Process(Joe says hi)

  • Marketing Definition: Engaging customers and managing profitable customer relationships.

  • Marketing Goals: Attract new customers (superior value); Keep and grow current customers (satisfaction).

  • Forms of Marketing:

    • Traditional: Sale-focused, product abundance, mass advertising.

    • Contemporary: Customer needs-focused, digital platforms, direct/personal/interactive reach.

  • The Marketing Process: Involves creating and capturing customer value.

1.2 Understanding the Marketplace and Customer Needs

  • Five Core Customer and Marketplace Concepts:

    1. Needs, Wants, and Demands:

      • Needs: States of felt deprivation.

      • Wants: Needs shaped by culture/personality.

      • Demands: Wants backed by buying power.

    2. Market Offerings: Products, services, information, or experiences satisfying needs/wants.

      • Marketing Myopia: Over-focus on specific products rather than underlying benefits.

    3. Value and Satisfaction: Customers form expectations; satisfaction leads to repurchase.

    4. Exchanges and Relationships: Marketing builds relationships by delivering superior customer value.

    5. Markets: All actual and potential buyers.

1.3 Customer Value-Driven Marketing Strategy and Orientations

  • Marketing Management: Choosing target markets and building profitable relationships.

  • Key Elements of Strategy:

    • Selecting Customers: Market Segmentation & Target Marketing.

    • Choosing a Value Proposition: Differentiating and positioning the company.

  • Marketing Management Orientations:

    • Production Concept: Focus on efficiency.

    • Product Concept: Focus on continuous product improvements.

    • Selling Concept: Inside-out view; existing products, heavy selling (Profits through sales volume).

    • Marketing Concept: Outside-in view; understanding/satisfying customer needs (Profits through customer satisfaction).

    • Societal Marketing Concept: Considers company profits, consumer wants, and society's long-run interests.

  • Integrated Marketing Plan and Program: Marketing mix tools (Four P's):

    • Product, Price, Place, Promotion.

1.4 Customer Relationship Management: Creating and Capturing Value

  • Customer Relationship Management (CRM): Delivering superior customer value and satisfaction.

    • Customer-Perceived Value: Customer's evaluation relative to competitors.

    • Customer Satisfaction: Perceived performance matches expectations.

  • Customer Lifetime Value: Value of a customer's entire stream of purchases.

  • Building Customer Equity: Total combined customer lifetime values of all customers.

  • Customer Relationship Groups:

    • Strangers: Low profitability, short-term.

    • Butterflies: High profitability, short-term.

    • Barnacles: Low profitability, long-term.

    • True Friends: High profitability, long-term.

1.5 Changing Marketing Landscape

  • Major Trends and Forces:

    • Digital Age: Online, mobile, and social media marketing; Big Data, AI.

    • Rapid Globalization: Local and global views.

    • Sustainable Marketing: Corporate ethics and social responsibility.