Principles of Marketing: Creating Customer Value and Engagement
Marketing: Creating Customer Value and Engagement
Emirates' Customer Value-Driven Marketing
Emirates focuses on being a catalyst for connecting people's dreams, hopes, and aspirations, rather than just providing transportation from Point A to Point B.
This approach highlights customer value-driven marketing, engaging customers, and building a brand community.
1.1 Defining Marketing and its Process
What is Marketing?
Marketing is a process through which companies create value for customers and build strong customer relationships.
The ultimate goal is to capture value from customers in return.
Marketing is pervasive, encountered in traditional forms (e.g., print ads) and new forms (e.g., websites, mobile apps, online videos, social media).
The Marketing Process: Creating and Capturing Customer Value
Five-step process (as shown in Figure 1.1):
Understand the marketplace and customer needs and wants: This foundational step involves deep insight into what customers desire.
Design a customer value-driven marketing strategy: Develop a plan focusing on delivering superior value to specific target customers.
Construct an integrated marketing program that delivers superior value: Implement the strategy through a comprehensive marketing mix.
Engage customers, build profitable relationships, and create customer delight: Interact with customers effectively to foster loyalty and satisfaction.
Capture value from customers in return: This involves generating profits and building customer equity based on the value delivered.
1.2 Understanding the Marketplace and Customer Needs
Key Marketplace Concepts:
Needs: States of felt deprivation.
Examples include physical needs (food, clothing, warmth, safety), social needs (belonging, affection), and individual needs (knowledge, self-expression).
Wants: The specific forms human needs take, shaped by culture and individual personality.
For example, an American needs food but wants a Big Mac, while someone in another culture might want rice.
Demands: Human wants backed by buying power.
People demand products and services that provide the most value and satisfaction for their money.
Example (Staying close to customers): Airbnb's CEO Brian Chesky and co-founder Joe Gebbia regularly stay at host locations to gain real user experience and shape new customer solutions.
Market Offerings: Combinations of products, services, information, or experiences offered to a market to satisfy a need or want.
This includes not only physical products but also services (e.g., airline travel, banking), persons, places, organizations, information, and ideas.
Marketing myopia: A common pitfall where companies focus too narrowly on their specific products rather than on the underlying benefits and experiences consumers seek.
This can lead to losing sight of customer needs and being overtaken by competitors offering better solutions.
Value and Satisfaction; Exchange and Relationships:
Customer expectations: Customers form expectations about the value and satisfaction that market offerings will provide.
Satisfied customers are more likely to repurchase.
Dissatisfied customers are likely to switch to competitors.
Exchange: The act of obtaining a desired object from someone by offering something in return.
Marketing actions aim to create, maintain, and grow desirable exchange relationships.
Market: The set of all actual and potential buyers of a product or service.
Consumers engage in marketing activities when they search for products, interact with companies for information, and make purchases.
Modern Marketing System: Figure 1.2 illustrates the complex interactions between suppliers, the company, competitors, marketing intermediaries, and final consumers, all influenced by major environmental forces.
1.3 Customer Value-Driven Marketing Strategy and Orientations
Marketing Management: The art and science of selecting target markets and building profitable relationships with them.
Key Decisions in Designing a Customer Value-Driven Marketing Strategy:
What customers will we serve? (Target Market): Deciding who to focus efforts on depends on market segmentation and targeting.
How can we best serve these customers? (Value Proposition): Determining how to differentiate and position the market offering.
A brand's value proposition is the specific bundle of benefits or values it promises to deliver to customers to satisfy their needs.
Example: Sonos positions its Sonos One with Amazon Alexa as "The smart speaker for music lovers," combining Alexa's advantages with high-quality Sonos sound.
Marketing Management Orientations (Philosophies that guide marketing strategy):
Production Concept: Consumers will favor products that are available and highly affordable.
Management focuses on improving production and distribution efficiency.
Product Concept: Consumers will favor products that offer the most quality, performance, and innovative features.
Management focuses on making continuous product improvements.
Selling Concept: Consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort.
Typically used for unsought goods (e.g., insurance, blood donations).
Focuses on creating sales transactions rather than building long-term customer relationships (Figure 1.3 contrasts Selling and Marketing Concepts).
Marketing Concept: Achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.
Customer-centered philosophy: