Creating and capturing customer value
Understanding the marketplace and customer needs and wants
● Marketing is about satisfying customer needs(State of deprivation -physical ,social and
individual aspects) and wants (shaped by culture and individual personality) and
demands is the Human wants that are backed by buying power.
● Marketing offerings- goods, services and experiences- Combination of goods,services,
information or experiences offered to a market to satisfy a need or want. Physical
objects lies not so much in owning them as in the benefits they provide. Ie food is made
to be eaten not looked at.
● Marketing Myopia- the mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by these products
● Customer value and satisfaction- expectation about the value and satisfaction that
various market offerings will deliver, and buy accordingly. Satisfied consumers buy again
and tell others about their good experiences.
● Exchange ( the act of obtaining a desired object from someone by offering something in
return) , transactions( a trade between two parties that involve at least two things of
value agreed upon conditions and a time and place of agreement. ) and relationships(
Building and maintaining desirable exchange relationship with target audiences involving
a product,service,idea or other object . the company wants to retain customers and grow
the business.
● Markets - the set of all actual and potential buyers of a product or service . these buyers
share a particular need or want that can be satisfied through exchange relationships.
Design a customer- driven marketing strategy
● Marketing management- the art and science of choosing target markets and
building profitable relationship with them. They aim to attract, engage ,keep and
grow target by creating, delivering and communicating superior customers value
● Selecting customers to serve- management first decides who the organisations
will serve. This is done by examining various segments into which the market
naturally falls, based on the appropriate factors that can be used to analyse a
market.
, ● Demarketing- Marketing in which the task is to temporarily or permanently
reduce demand but only to reduce or shift it to another time or even to another
product. Thus marketing management seeks to affect the level, timing and nature
of demand in a way that helps the organization achieve its objectives.
● Choosing a value proposition- How the firm serves the targeted customers-
how it will differentiate and position itself in the marketplace. A marketing
organisation’s value proposition is the set of benefits or value it promises to
deliver to consumers to satisfy their needs.
Construct an integrated marketing program that delivers superior value
● The marketer develops an integrated marketing program that will actually deliver
the intended value to target customers. The marketing program builds customer
relationships by transforming the marketing strategy into action
Building profitable relationships and create customer delight.
Process(how the customer satisfaction will be delivered and recorded ) in case of “high
contract” services customers are often involved in the process of creativity and enjoying
experiences. Increasingly so is technology
Physical Evidence( managing the customer expectations and service quality.) (services are
mostly intangible) .The meaning of other tools and techniques used in measure of satisfaction is
important
People( staff interacting with customers. How that experience might be described
Target customer intended positioning
Placement (where it will make the offer available to target customers
Promotion( persuade the target market into buying) -advertising , personal selling ,direct
marketing
Product( need which will satisfy market offerings) - variety, quality,design ,features
Price (value to the product /service)- discounts, settlement and credit terms, list price
Marketing Management Orientations
● Production concept -the idea that consumers will favour products that are available and
highly affordable, therefore organisations focuses on improving production and
distribution efficiency.
● Product concept- the idea that consumers will favour products that offer the most quality,
performance and features, therefore organisations devotes its energy to making
continuous product improvements.
● Selling concept- the idea that consumers will not buy enough of the firm’s products
unless the firm undertakes a large-scale selling and promotion effort. ( DISCOUNTS)
● Marketing concept- the idea that achieving organisational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than
competitors do.
● Societal marketing concept -the idea that marketing decisions should consider
consumers’ wants, the company’s requirements, consumers’ long-run interests and
society’s long-run interests.
Customer Relationship Management
,Customer relationship management is the process of managing detailed information about
individual customers and managing customer touch points in order to maximise customer
loyalty.
● Customer Perceived Value: the customers evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to those offered by competitors.
● Customer Satisfaction: the extent to which a product’s perceived performance
matches or exceeds a buyer’s expectations.
Higher levels of satisfaction lead to greater loyalty which in turn results in better company
performance.
Capturing value from customers
By building superior customers value, the firm creates highly satisfied customers who remain
loyal and buy more. This means greater long run returns for the marketing organisations.
Creating customer loyalty and retention- satisfied customers remain loyal and talk favourably
to others about the company and its products.Customer lifetime value- the amount by which
revenues from a customer over time exceed the company’s costs of attracting,selling and
servicing that customer.
Growing share of customers- the portion of the customer’s purchasing that a company gets in
its product categories. To increase share of customers,firms can offer greater variety to current
customers. Or they can train employees to cross-sell in order to market more products and
services to existing customers.
Customer equity- the total combined customer lifetime values of all of the company’s
customers. It’s a measure of the future value of the company’s customer base and measure of a
company’s performance than current sales or market share.
Building the right relationship with the right customers- viewing customers as assets that
need to be managed and maximised. The company can classify customers according to their
potential profitability and manage its relationship groups, according to their profitability and
projected loyalty.
, Core- what is the buyer really buying/ when designing products, marketers must first
define the core, problem-solving benefits or service that consumers seek. Ie Samsung
Galaxy S7 Smartphone are buying more than a mobile phone,email device or camera
Actual product- they need to develop product and service features,design, a quality
level, a brand name and packaging ie Samsung Galaxy S7 edge is an actual product.
Its name,parts,styling,features,packaging and other attributes have all been combined
carefully to deliver the core customer value of staying connected.
Augmented product- product planners must build an augmented product around the
core benefit and actual product by offering additional consumer service and benefits.
The Galaxy S7 Edge offers more than just a communications device. It provides
consumers with a complete solution to mobile connectivity problems. Thus dealers
might give buyers a warranty on parts and working manship.
Product line decision
A group of products that are closely related because they function is a similar manner, are sold
to the same customer groups,are marketed through the same types of outlets or fall when given
price ranges.
● Product line length-the number of items in the product line .The line is too short if the
manager can increase profits by adding items; the line is too long is the manager can
increase profits by dropping items
● Product line filling-involves adding more items within the present range of the line.
There are several reasons for product line filling: reaching for extra profits, satisfying
dealers. Line filling is overdone i fit results in cannibalisation and customer confusion
● Product line stretching occurs when a company lengthens its product line beyond its
current range. The company can stretch its line downward,upward or both ways.
Companies located at the upper end of the market can stretch their lines downward.
Downward - A company may stretch downward to plug a market hole that otherwise would
attract a new competitors or to respond to a competitor's attack on the upper end.
Upward- Companies stretch upward in order to add prestige to their current products. Or they
may be attracted by a faster growth rate or higher margins at the higher end.
Understanding the marketplace and customer needs and wants
● Marketing is about satisfying customer needs(State of deprivation -physical ,social and
individual aspects) and wants (shaped by culture and individual personality) and
demands is the Human wants that are backed by buying power.
● Marketing offerings- goods, services and experiences- Combination of goods,services,
information or experiences offered to a market to satisfy a need or want. Physical
objects lies not so much in owning them as in the benefits they provide. Ie food is made
to be eaten not looked at.
● Marketing Myopia- the mistake of paying more attention to the specific products a
company offers than to the benefits and experiences produced by these products
● Customer value and satisfaction- expectation about the value and satisfaction that
various market offerings will deliver, and buy accordingly. Satisfied consumers buy again
and tell others about their good experiences.
● Exchange ( the act of obtaining a desired object from someone by offering something in
return) , transactions( a trade between two parties that involve at least two things of
value agreed upon conditions and a time and place of agreement. ) and relationships(
Building and maintaining desirable exchange relationship with target audiences involving
a product,service,idea or other object . the company wants to retain customers and grow
the business.
● Markets - the set of all actual and potential buyers of a product or service . these buyers
share a particular need or want that can be satisfied through exchange relationships.
Design a customer- driven marketing strategy
● Marketing management- the art and science of choosing target markets and
building profitable relationship with them. They aim to attract, engage ,keep and
grow target by creating, delivering and communicating superior customers value
● Selecting customers to serve- management first decides who the organisations
will serve. This is done by examining various segments into which the market
naturally falls, based on the appropriate factors that can be used to analyse a
market.
, ● Demarketing- Marketing in which the task is to temporarily or permanently
reduce demand but only to reduce or shift it to another time or even to another
product. Thus marketing management seeks to affect the level, timing and nature
of demand in a way that helps the organization achieve its objectives.
● Choosing a value proposition- How the firm serves the targeted customers-
how it will differentiate and position itself in the marketplace. A marketing
organisation’s value proposition is the set of benefits or value it promises to
deliver to consumers to satisfy their needs.
Construct an integrated marketing program that delivers superior value
● The marketer develops an integrated marketing program that will actually deliver
the intended value to target customers. The marketing program builds customer
relationships by transforming the marketing strategy into action
Building profitable relationships and create customer delight.
Process(how the customer satisfaction will be delivered and recorded ) in case of “high
contract” services customers are often involved in the process of creativity and enjoying
experiences. Increasingly so is technology
Physical Evidence( managing the customer expectations and service quality.) (services are
mostly intangible) .The meaning of other tools and techniques used in measure of satisfaction is
important
People( staff interacting with customers. How that experience might be described
Target customer intended positioning
Placement (where it will make the offer available to target customers
Promotion( persuade the target market into buying) -advertising , personal selling ,direct
marketing
Product( need which will satisfy market offerings) - variety, quality,design ,features
Price (value to the product /service)- discounts, settlement and credit terms, list price
Marketing Management Orientations
● Production concept -the idea that consumers will favour products that are available and
highly affordable, therefore organisations focuses on improving production and
distribution efficiency.
● Product concept- the idea that consumers will favour products that offer the most quality,
performance and features, therefore organisations devotes its energy to making
continuous product improvements.
● Selling concept- the idea that consumers will not buy enough of the firm’s products
unless the firm undertakes a large-scale selling and promotion effort. ( DISCOUNTS)
● Marketing concept- the idea that achieving organisational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than
competitors do.
● Societal marketing concept -the idea that marketing decisions should consider
consumers’ wants, the company’s requirements, consumers’ long-run interests and
society’s long-run interests.
Customer Relationship Management
,Customer relationship management is the process of managing detailed information about
individual customers and managing customer touch points in order to maximise customer
loyalty.
● Customer Perceived Value: the customers evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to those offered by competitors.
● Customer Satisfaction: the extent to which a product’s perceived performance
matches or exceeds a buyer’s expectations.
Higher levels of satisfaction lead to greater loyalty which in turn results in better company
performance.
Capturing value from customers
By building superior customers value, the firm creates highly satisfied customers who remain
loyal and buy more. This means greater long run returns for the marketing organisations.
Creating customer loyalty and retention- satisfied customers remain loyal and talk favourably
to others about the company and its products.Customer lifetime value- the amount by which
revenues from a customer over time exceed the company’s costs of attracting,selling and
servicing that customer.
Growing share of customers- the portion of the customer’s purchasing that a company gets in
its product categories. To increase share of customers,firms can offer greater variety to current
customers. Or they can train employees to cross-sell in order to market more products and
services to existing customers.
Customer equity- the total combined customer lifetime values of all of the company’s
customers. It’s a measure of the future value of the company’s customer base and measure of a
company’s performance than current sales or market share.
Building the right relationship with the right customers- viewing customers as assets that
need to be managed and maximised. The company can classify customers according to their
potential profitability and manage its relationship groups, according to their profitability and
projected loyalty.
, Core- what is the buyer really buying/ when designing products, marketers must first
define the core, problem-solving benefits or service that consumers seek. Ie Samsung
Galaxy S7 Smartphone are buying more than a mobile phone,email device or camera
Actual product- they need to develop product and service features,design, a quality
level, a brand name and packaging ie Samsung Galaxy S7 edge is an actual product.
Its name,parts,styling,features,packaging and other attributes have all been combined
carefully to deliver the core customer value of staying connected.
Augmented product- product planners must build an augmented product around the
core benefit and actual product by offering additional consumer service and benefits.
The Galaxy S7 Edge offers more than just a communications device. It provides
consumers with a complete solution to mobile connectivity problems. Thus dealers
might give buyers a warranty on parts and working manship.
Product line decision
A group of products that are closely related because they function is a similar manner, are sold
to the same customer groups,are marketed through the same types of outlets or fall when given
price ranges.
● Product line length-the number of items in the product line .The line is too short if the
manager can increase profits by adding items; the line is too long is the manager can
increase profits by dropping items
● Product line filling-involves adding more items within the present range of the line.
There are several reasons for product line filling: reaching for extra profits, satisfying
dealers. Line filling is overdone i fit results in cannibalisation and customer confusion
● Product line stretching occurs when a company lengthens its product line beyond its
current range. The company can stretch its line downward,upward or both ways.
Companies located at the upper end of the market can stretch their lines downward.
Downward - A company may stretch downward to plug a market hole that otherwise would
attract a new competitors or to respond to a competitor's attack on the upper end.
Upward- Companies stretch upward in order to add prestige to their current products. Or they
may be attracted by a faster growth rate or higher margins at the higher end.
