Managing profitable customer relationships ppt @ bec doms bagalkot mba marketing

1. Managing Profitable Customer
Relationships

2. Learning Goals
1. Define marketing and the marketing process.
2. Explain the importance of understanding customers and
identify the five core marketplace concepts
3. Identify the elements of a customer-driven marketing strategy
and discuss the marketing management orientations.
4. Discuss customer relationship management and creating
value for and capturing value from customers
5. Describe the major trends and forces changing the marketing
landscape
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3. Case Study
NASCAR – What is its secret?
 Creating Value
• Create compelling blend of Capturing Value
live racing events, media • Fans spends nearly $700 a
coverage and Web sites. year on NASCAR
• Go out of its way to show merchandise
the customer a good time. • Second highest regular
• Create wholesome family- season sport on TV
oriented environment • NASCAR attracts over 250
big-name sponsors
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4. What is Marketing?
 Marketing Defined:
“Marketing is a social and managerial process by
which individuals and groups obtain what they
need and want through creating and exchanging
value with others”
 Marketing is about managing profitable
customer relationships
 Attracting new customers
 Retaining and growing current customers
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Goal 1: Define marketing and the marketing process.

5. The Marketing Process
A Five-Step Process
1. Understand the marketplace and customer needs and
wants
2. Design a customer-driven marketing strategy
3. Construct a marketing program that delivers
superior value
4. Build profitable relationships and create customer
delight
5. Capture value from customers to create profits and
customer quality
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Goal 1: Define marketing and the marketing process.

6. Understanding the Marketplace
• Needs, wants, and demands  Need
• Core Concepts
Marketing offers: including  State of felt deprivation
products, services and  Example: Need food
experiences  Wants
• Value and satisfaction  The form of needs as shaped
• Exchange, transactions and by culture and the individual
relationships  Example: Want a Big Mac
• Markets  Demands
 Wants which are backed by
buying power
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Goal 2: Identify the five core marketplace concepts.

7. Understanding the Marketplace
• Needs, wants, and demands  Marketing offer
• Core Concepts
Marketing offers: including  Combination of products,
products, services and services, information or
experiences experiences that satisfy a
• Value and satisfaction need or want
 Offer may include services,
• Exchange, transactions and activities, people, places,
relationships information or ideas
• Markets
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Goal 2: Identify the five core marketplace concepts.

8. Understanding the Marketplace
• Needs, wants, and demands  Value
• Core Concepts
Marketing offers: including  Customers form
products, services and expectations regarding value
experiences  Marketers must deliver
• Value and satisfaction value to consumers
• Exchange, transactions and  Satisfaction
relationships  A satisfied customer will
• Markets buy again and tell others
about their good experience
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Goal 2: Identify the five core marketplace concepts.

9. Understanding the Marketplace
• Needs, wants, and demands  Exchange
• Core Concepts
Marketing offers: including  The act of obtaining a
products, services and desired object from
experiences someone by offering
• Value and satisfaction something in return
 One exchange is not the
• Exchange, transactions and goal, relationships with
relationships several exchanges are the
• Markets goal
 Relationships are built
through delivering value
and satisfaction
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Goal 2: Identify the five core marketplace concepts.

10. Understanding the Marketplace
• Needs, wants, and demands  Market
• Core Concepts
Marketing offers: including  Set of actual and potential
products, services and buyers of a product
experiences  Marketers seek buyers that
• Value and satisfaction are profitable
• Exchange, transactions and
relationships
• Markets
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Goal 2: Identify the five core marketplace concepts.

11. Marketing Management
 Marketing management is the art and science
of choosing target markets and building
profitable relationships with them.
 This definition must include answers to two
questions:
 What customers will we serve?
 How can we serve these customers best?
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Goal 3: Identify elements of a customer-driven strategy.

12. Selecting Customers and Creating
Value
 Customer Management
 What customers will we serve?
 Marketers select customers that can be served profitably
 Value Proposition
 How can we serve these customers best?
 Includes the set of benefits or values a company promises
to deliver to consumers to satisfy their needs
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Goal 3: Identify elements of a customer-driven strategy.

13. Marketing Management
Marketing Orientations
• Production concept • Selling concept
• Product concept • Marketing concept
• Societal marketing concept
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Goal 3: Identify elements of a customer-driven strategy.

14. The Marketing Plan
 Transforms the marketing strategy into action
 Includes the marketing mix and the 4P’s of
marketing
 Product
 Price
 Place
 Promotion
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Goal 3: Identify elements of a customer-driven strategy.

15. Building Customer Relationships
 CRM – Customer relationship management
 The overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction. It deals with all aspects of
acquiring, keeping and growing customers.
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Goal 4: Discuss CRM and capturing value.

16. Value and Satisfaction
 Perceived Value
 The customer’s evaluation of the difference
between benefits and costs.
 Customers often do not judge values and costs
accurately or objectively.
 Customer Satisfaction
 Product’s perceived performance relative to
customer’s expectations.
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Goal 4: Discuss CRM and capturing value.

17. Not All Customers
are Equal
 Basic Relationships
 Low-margin customers
 Full Partnerships
 Key customers
 Selective relationship management
 Weeding out unprofitable customers
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Goal 4: Discuss CRM and capturing value.

18. Capturing Value from Customers
 Customer Loyalty  Customer delight
Key Concepts
and Retention leads to emotional
 Share of Customer relationships and
 Customer Equity loyalty
 Customer Lifetime
Value shows true
worth of a customer
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Goal 4: Discuss CRM and capturing value.

19. Capturing Value from Customers
 Customer Loyalty  Share of customer’s
Key Concepts
and Retention purchase in a
 Share of Customer product category.
 Customer Equity  Achieved through
offering greater
variety, cross-sell
and up-sell
strategies.
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Goal 4: Discuss CRM and capturing value.

20. Capturing Value from Customers
 Customer Loyalty • The combined customer
Key Concepts
and Retention
lifetime values of all current
and potential customers.
 Share of Customer • Measures a firm’s
performance, but in a
 Customer Equity manner that looks to the
future.
• Choosing the “best”
customers is key
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Goal 4: Discuss CRM and capturing value.

21. Marketing Landscape
 Digital age  Growth of the Internet
Challenges
 Globalization  Advances in
telecommunications,
 Ethics and social information,
responsibility transportation
 Customer research and
 Not-for-profit tracking
 Product development
marketing  Distribution
 Marketing  New advertising tools
 24/7 marketing through the
relationships Internet
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Goal 5: Discuss trends and forces.

22. Marketing Landscape
 Digital age  Geographical and
Challenges
 Globalization cultural distances have
 Ethics and social shrunk
 Greater market coverage
responsibility  More options for purchasing
 Not-for-profit and manufacturing
 Increased competition from
marketing
foreign competitors
 Marketing
relationships
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Goal 5: Discuss trends and forces.

23. Marketing Landscape
 Digital age  Marketers need to take
Challenges
 Globalization great responsibility for
 Ethics and social the impact of their
responsibility actions
 Caring capitalism is a way
 Not-for-profit to differentiate your
marketing company
 Marketing
relationships
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Goal 5: Discuss trends and forces.

24. Marketing Landscape
 Digital age  Many organizations are
Challenges
 Globalization realizing the
 Ethics and social importance of strategic
responsibility marketing
 Performing arts
 Not-for-profit  Government agencies
marketing  Colleges
 Hospitals
 Marketing
 Churches
relationships
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Goal 5: Discuss trends and forces.

25. Marketing Landscape
 Digital age  Profits through
Challenges
 Globalization managing long-term
 Ethics and social customer equity
 Improve customer
responsibility knowledge
 Not-for-profit  Target profitable customers
 Keep profitable customers
marketing
 Marketing
relationships
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Goal 5: Discuss trends and forces.

26. What is Marketing
 The process of building profitable customer
relationships by creating value for customers
and capturing value in return
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