1.3 Designing a Customer Value-Driven Marketing Strategy and Plan Flashcards
(36 cards)
At what point can marketing management design a customer value-driven marketing strategy?
Once it fully understands consumers and the marketplace, marketing management can design a customer value-driven marketing strategy.
Definition of Marketing Management
Marketing management: The art and science of choosing target markets and building profitable relationships with them.
What is the aim of the marketing manager?
The marketing manager’s aim is to engage, keep, and grow target customers by creating, delivering, and communicating superior customer value.
To design a winning marketing strategy, the marketing manager must answer two important questions.
What are they?
What customers will we serve (what’s our target market)?
How can we serve these customers best (what’s our value proposition)?
The company must first decide whom it will serve.
How does it do this?
It does this by dividing the market into segments of Customers (market segmentation) and selecting which segments it will go after (target marketing)
Some people think of marketing management as finding as many customers as possible and increasing demand.
Why is this line of thinking incorrect?
Marketing managers know that they cannot serve all customers in every way. By trying to serve all customers, they may not serve any customers well.
After deciding which customers they wish to taget, what must a marketing manager decide on?
Ultimately, marketing managers must decide which customers they want to target and decide onthe
Level
Timing
Nature
of customer demand.
How can we simply put the segments of marketing management?
Simply put, marketing management is customer management and demand management.
What must we think of when deciding how to serve targeted customers?
The company must also decide how it will serve targeted customers—how it will differentiate and position itself in the marketplace
What is a brand’s value proposition?
What are some examples?
A brand’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs.
WestJet promises to “Act like an owner” and “Care from the heart.”
By contrast, British Columbia-based Flair Airlines gives you “Canada’s ticket to ultra low airfares.”
Homewood Suites by Hilton wants you to “Make yourself at home.”
What are the intended goals when creating a value proposition?
Such value propositions differentiate one brand from another. They answer the customer’s question:
“Why should I buy your brand rather than a competitor’s?”
Companies must design strong value propositions that give them the greatest advantage in their target markets.
What are 5 different marketing philosophies in which an organization can design and carry out marketing stratigies?
There are five alternative concepts under which organizations design and carry out their marketing strategies:
Production
Product
Selling
Marketing
Societal
concepts.
What is the Production concept?
Production concept: The idea that consumers will favour products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency.
What are the risks of The Production Concept?
The production concept can lead to marketing myopia.
Companies adopting this orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real objective—satisfying customer needs and building customer relationships.
What is the Product Concept?
Product concept: The idea that consumers will favour products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements.
Risks of the Product Concept
Focusing only on the company’s products can also lead to marketing myopia.
For example, some manufacturers believe that if they can “build a better mousetrap, the world will beat a path to their doors.” But they are often rudely shocked. Buyers may be looking for a better solution to a mouse problem but not necessarily for a better mousetrap. The better solution might be a chemical spray, an exterminating service, a house cat, or something else that suits their needs better than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages, and prices it attractively; places it in convenient distribution channels; brings it to the attention of people who need it; and convinces buyers that it is a better product.
What is the selling concept?
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.
When is The Selling Concept typically practiced?
The selling concept is typically practised with unsought goods—those that buyers do not normally think of buying, such as life insurance or blood donations.
These industries must be good at tracking down prospects and selling them on a product’s benefits.
Risks of The selling concept
Such aggressive selling, however, carries high risks. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships.
The aim often is to sell what the company makes rather than to make what the market wants.
It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily on customer conquest—getting short-term sales with little concern about who buys or why.
It assumes that customers who are coaxed into buying the product will like it. Or, if they don’t like it, they will possibly forget their disappointment and buy it again later.
These are usually poor assumptions.
What is The Marketing Concept?
Marketing concept: A philosophy in which achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
Instead of a product-centred make-and-sell philosophy, the marketing concept is a customer-centred sense-and-respond philosophy.
The job is not to find the right customers for your product but to find the right products for your customers.
Selling and Marketing Concepts Contrasted (Figure)
Implementing the marketing concept often means more than simply responding to customers’ stated desires and obvious needs.
What else does it require?
Customer-driven companies research customers deeply to learn about their desires, gather new product ideas, and test product improvements.
Such customer-driven marketing usually works well when a clear need exists and when customers know what they want.
What is Customer-driving marketing?
Customer-driving marketing: Understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future.
What is the Societal marketing concept?
Societal marketing concept: The idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.
The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being.
