For Marketing Management

Creating and Capturing Customer Value

Partnering to Build Customer Relationships
Analyzing the Marketing Environment
Managing Marketing Information
Consumer Markets and Consumer Buyer Behavior
Business Markets and Business Buyer Behavior
Customer-driven Marketing Strategy
Products, Services, and Brands
New Product Development and Product Lifecycle Strategies
Pricing
Marketing Channels
Communicating Customer Value
Sustainable Marketing
Marketing Plan

Creating and Capturing Customer Value

1. Understand the Marketplace and Customer Needs

When it comes to marketing, the very first step of the marketing process is to understand the marketplace where they
operate and invest some good time to understand the customer needs.
Companies cannot create value and build a profitable business until and unless they understand what the customers
are looking for (needs)

To do so companies usually examine the following 5 areas, let’s understand in detail.

 What are their Customer Needs, Wants, and Demands?
 How these Needs and Wants of Customers are fulfilled through Marketing Offerings?
 Value and Satisfaction
 Exchange and Relationships
 The Markets

Customer Needs, Wants and Demands

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Needs. The most basic concept underlying marketing is that of human needs. Human needs are essential or very
much required. It includes basic physical needs for Food, Clothing, Shelter, and safety.
Marketers did not create these needs; they are a basic part of the human makeup.

Wants. Want is something that we wish to have which is not available with us. It is the form of Human Needs, which
are shaped by the surrounding culture and individual personality. Eg: An individual in one country Needs foods but
want a Burger. An individual in another country Needs food too but want Noodles.

Demands. Demands are an extension of “want”, with a clear objective of filling the gap that wants have left with. When
backed by an individual buying power, wants to become demands. Eg: I desire to have a villa, even though I have a
house. This is desire is backed in my buying power.

Marketing Offerings
Once done with the market and consumer understanding, Companies focus on what products, services, information,
or experiences they are offering to a market, to satisfy a need or want.
These market offerings also include services activities or benefits offered for sale that are intangible and do not result
in the ownership of anything. Eg. Theme park or amusement park experience.
Your company’s offering will affect a customer’s decision on whether to purchase from you or from a competitor. It is
very important to look beyond the attribute of the product and offer the complete package, create a brand experience
for consumers which drives them towards your offering over your competitor.

Customer Value and Satisfaction

Customers usually deal with various products and services which satisfy their needs and wants. Which product or
brand to select? Customer forms expectations about the value and satisfaction that various market offerings will deliver
and buy accordingly.
Marketers must be careful to set the right level of expectations. Neither too low nor high, It should be balanced.

Exchange Relationships
Customer relationship management is perhaps the most important concept of marketing. Marketing consists of actions
taken to create, maintain, and grow a desirable exchange relationship with target audiences involving a product,
service, idea, or the other object. Marketers try to bring about a response to some market offerings. It may be more
than simply buying products or services.

The Markets
The concepts of exchange and relationships lead to the concept of the market. A market is the set of actual and
potential buyers of a product or service. Marketing means managing markets to bring about profitable customer
relationships. Consumers, when they go through the purchase phase interact with companies online site, and mobile
apps, which empowered consumers and made marketing a two-way affair.

2. Design a Customer Value-Driven Marketing Strategy

Once fully researched consumers and the marketplace, the next step is to design a winning marketing strategy.

Select Whom to Serve

It is practically not possible to serve all the customers in every way. Hence the company must first decide whom it will
serve.
This is done by dividing the market into segments of customers and selecting which group of customers it will serve.
This process is called Market Segmentation and selecting a specific group out of those segments is called target
marketing.
This can help businesses make informed decisions not only on advertising, marketing, and pricing but also in new
product development.

Choose a Value Proposition

It is essential to decide how a company will serve its targeted customers? How it’ll differentiate and position itself in the
marketplace. A brand’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy
their needs. A companies value proposition must differentiate one brand from another. They answer the customer’s
question, why should your consumer buy your brand over the competitor?

Decide Marketing Philosophy

Companies want to design strategies that will engage in targeted customers and build profitable relationships with
them. There are five alternative concepts under which organizations design and carry out their marketing strategies.
Companies select one of the philosophies (given below)that will engage target consumers and build a profitable and
long-lasting relationship.
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3. Prepare an Integrated Marketing Plan and Program
When companies finalize it’s a marketing strategy that outlines which customers it will serve and how it will serve. The
next step to create an integrated marketing plan. Using an integrated marketing plan companies execute their
marketing strategy with a firm marketing mix.
Let’s understand The Marketing Mix in detail

The Marketing Mix

The four Ps of marketing is the key factors that are involved in the marketing of a good or service. They are the
product, price, place, and promotion of a good or service.

These are the key elements that must be united to effectively foster and promote a brand’s unique value, and help it
stand out from the competition.

To deliver the value proposition, the company first focus on creating a product that satisfies customer need (product).
Then it should target on how much it will charge for that particular product (price). Pricing can be decided using one
the pricing strategy (Cost-plus, competitive or Value-based pricing). Then the company should focus on the availability
of the product, that how a product will be available to the targeted customer (place). Finally, it’s time to promote your
product (promotion). Promotion includes elements like advertising, public relations, social media marketing, email
marketing, search engine marketing, video marketing, and more.
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4. Manage Customer Relationships
The most important step of the modern-marketing is to engage your targeted customer and build a profitable
relationship. Let’s find out what are the points to be considered when it comes to customer engagement in this modern
era.

Customer Value and Satisfaction

Companies can only build lasting customer relationships by creating superior customer value and satisfaction by their
market offering. If customers are satisfied, it likely that they will be loyal to the brand/company offering.
Customers buy from the company that offers the highest customer-perceived-values (while making a purchase, a
customer values a product’s benefit higher than its function).

Customer satisfaction depends on the product’s perceived performance relative to customer expectations. if the
market offering falls short of the customer’s expectations, the customer is dissatisfied. If it matches the expectations,
the customer is satisfied, if exceeds expectations, the customer is highly satisfied or delighted.

A satisfied or delighted customer shows loyalty to the brand/company.

If a company targets to delight its customers, its market offering must create a high level of values and satisfaction to
the customers.

Customer Relationship levels

Companies build customer relations at many levels based on the target market and also based on their market
offerings.
For example, a company with a low-margin product may only build basic customer relationships, on the other hand,
consider an FMCG (Fast-moving consumer goods) firm trying to build a relationship with its customer, Big Bazar (an
Indian retail chain of hypermarkets). In this case, the FMCG company representative will closely work with Big Bazar to
sell its product at Big Bazar stores. They often use marketing tools (CRMs) to develop stronger bonds with customers.

Customer Engagement
Customer engagement is all about encouraging your targeted customers to interact and share the experiences you
created for them.
Companies use a mix of the online and offline channel to create customer engagement here are some(but not limited
to)
 Use of social media platform to engage with customers, sharing creating content, engaging polls, and also
promptly replying to customer queries over the social media platform.
 Dedicated customer supports for the brand.
 Organize events when new product launches or a customer-engagement summit.
 Asking customer opening on a new product launch or featuring customers reviews/ post-purchase experience
in their commercial is also a trend now.

5. Capturing Value from Customers

The final step of the marketing process is to capturing value from customers, which is in the form of sales, market
share, and profits.
By creating superior customer values, the companies create satisfied customers. A satisfied customer stays loyal and
buys more in the future. That creates and long term profitable business for companies.

Creating Customer Loyalty & Retention

Nowadays, almost every company has a loyalty program. Satisfied customers remain loyal and talk favorably to others
about the company and its products. It is observed that loyal customers spend more and stay around longer. It is also
financially cheaper to keep an old customer than acquire a new one.

Here are some points which can help to achieve customer loyalty and retentions
 Give customers a reason to be loyal.
 Design a creative and engaging loyalty program. Add levels to your program to motivate your customers which
drives them towards making a purchase decision. Add some fun part in your loyalty program. It should not be
boring and difficult.
 Provide great customer service.
 Post-Purchase (after-sales) experience.

Growing Share of Customer

Good customer relationship management can help marketers increase their share of customers — the share they get
of the customer’s purchasing in their product categories. Ex: airlines want a greater ‘share of travel’. To increase the
share
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Building customer equity
When it comes to the marketing process, it is not only about acquiring customers but also keeping the growing them.
The value of a company comes from the value of the customer. Companies want to not only get profitable customers
but also creating a profitable relationship with customers for a lifetime to earn a greater share of their purchases.
Hence, the ultimate aim of customer relationship management is to produce high customer equity. Customer equity is
the total combined customer lifetime values of all the company’s current and potential customers. As such, it’s a
measure of the future value of the company’s customer base. The more loyal the firm’s profitable customers, the
higher its customer equity.

Building the Right Relationships with the Right Customers

It is also important for companies to understand which customer should the company acquires & retain? This is
because not all the customers are good investments.

Companies should manage their relationships according to their potential profitability.

Analyzing the Marketing Environment

The marketing environment includes the actors and forces outside marketing that affect marketing management’s
ability to build and maintain successful relationships with customers.

Marketing environment is divided into:

1) Microenvironment: consists of the actors close to the company that affect its ability to serve its customers, the
company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

2) Macro environment

A- Microenvironment:
a) The company:
Top management: set company's mission, objectives and broad strategies
Finance
R&D
Purchasing
Operations
Accounting

Hint: Marketing managers must work with other departments, as other departments work affect the work of
marketing in the company.

b) Suppliers:
Provide the resources to produce goods and services.
Treated as partners to provide customer value.
Supply shortages or delays, labor strikes and other events can cost sales in short run and customer
satisfaction on the long run.
 Rising supply costs may force increases that can harm the company's sales volume

c) Marketing intermediaries: Help the company to promote, sell and distribute its products to final buyers.
They include:
i. Resellers: are distribution channel firms that help the company find customers or make sales to them.
ii. Physical distribution firms: help the company to stock and move goods from their points of origins to their
destinations.
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iii. Distribution and agents: are organizations based in the market that generally have a contractual relationship
with the principal company to buy their products
iv. Marketing services agencies.
v. Financial intermediates.

d) Competitors: firms must gain strategic advantage by providing greater value and satisfaction than it competitors
do. No single competitive marketing strategy is the best for all companies. Bigger firms can use strategies that small
firms cannot use.

e) Public: is any group that has an actual or potential interest in or impact on an organization's ability to achieve its
objectsTypes:
- Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics

f) Customers

Macro environment:
1) Demographic Environment:
Demography:
is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other
statistics.
Demographic environment is important because it involves people, and people make up markets.
Demographic trends include age, family structure, geographic population shifts, educational characteristics,
and population diversity.
Generation X includes people born between 1965 and 1976
– High parental divorce rates
– Cautious economic outlook
– Less materialistic
– Family comes first–
Lag behind on retirement savings

-Millennials (gen Y or echo boomers)include those born between 1977 and2000:

– Comfortable with technology
– Includes
• Tweens (ages 8–12)
• Teens (13–19)
• Young adults (20’s)

Generational marketing is important in segmenting people by lifestyle instead of age.-More people are:
Divorcing or separatingChoosing not to marry
Choosing to marry laterMarrying without intending to have childrenIncreased number of working women
Stay-at-home dadsMoving from rural to metropolitan areas
Changes in where peoplework.
Home office
Divorcing or separating-Increasing Diversity:
Marketers are now facing increasingly diverse markets both at home and abroad as their operations become more
international in scope

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