Marketing is the process by which companies create value for customers and building strong customer relationships to capture value from customers in return. 5 step process of the marketing framework wherein value is created for customers and marketers capture value from customers in return.
- Understanding The Marketplace And Customer Needs And Wants.
- Designing A Customer-Driven Marketing Strategy.
- Constructing an integrated marketing plan that delivers superior value.
- Build Profitable Relationships.
- Capturing Value From Customers.
Step 1: Understanding The Marketplace And Customer Needs And Wants
It is important to understand customer needs, wants and demands to build want- satisfying market offerings and building value-laden customer relationships. This increases long-term customer equity for the firm.
Needs – States of felt deprivation
They include the physical need for necessities like food, clothing, shelter, warmth, safety and individual needs for knowledge and self-expression. These needs cannot be created by the marketers as they are a basic part of human markup.
Wants – The forms of human needs take as shaped by culture and individual personality.
Wants are shaped by one’s society and are described in terms of objects that will satisfy needs.
For example; an American in Dhaka needs food but wants McDonald’s.
Demands – Human wants that are backed by buying power
Given their wants and resources, people demand products with benefits that add up to the most va^ue and satisfaction.
Step 2: Designing A Customer-Driven Marketing Strategy
Focus areas for designing a marketing strategy:
- Selecting customers to serve -defining the target market
- Deciding how to serve customers in the best way – choosing a value proposition
Selecting customers to serve:
The company first decides who it will serve and divides the market into segments of the customer. Then it goes after specific sections of the market or its target market.
They target customers based on their level, timing, and nature of demand.
Choosing a value proposition
They decide how it will serve their customer that is how it will differentiate and position itself in the market. A brand’s value proposition is the set of values and benefits that it promises to deliver its customers.
Companies need to design strong value propositions to give them the greatest advantage in their target markets.
- Production concept: Consumers will favor products that are available and highly affordable. Management should focus on improving production and distribution efficiency.
- Product concept: Consumers will favor products that offer most in quality, performance and innovative features. Focus on making continuous product improvements.
- Selling concept: Consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. It is typically practiced with unsought goods that the company needs to sell and generally results in aggressive selling practices. The company sells what it makes rather than what the market wants.
- Marketing concept: Organizational goals are achieved by knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do.
- Societal concept: Marketing strategy should deliver value to customers in such a way that improves both customers as wells as society’s well being and long-run interests.
Step 3: Constructing an integrated marketing plan that delivers superior value
The company’s marketing strategy outlines which customers the company will serve and how it will create value for these customers. Then the marketer develops integrated marketing plans that will the intended value to target customers.
It consists of the firm’s marketing mix (4Ps), the set of marketing tools the firm uses to implement its marketing strategy.
The marketing program builds customer relationships by transforming the marketing strategy into action.
For this, it needs to blend all of these marketing tools into a comprehensive integrated marketing program that communicates and delivers the expected value to the customers.
Step 4: Build Profitable Relationships
Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Customer relationship management aims to produce high customer equity, the total combined customer lifetime values of all of the company’s customers.
The key to building lasting relationships is the creation of superior customer value and satisfaction.
Companies today not only want to acquire profitable relationships but also to build relationships that will increase their share of the customer portion of the customers purchasing that a company gets in its product categories.
Step 5: Capturing Value From Customers
The ultimate aim of customer relationship management is to produce high Customer equity – total combined lifetime values of all of the company’s current and potential customers.
More loyal to the company’s profitable customers, higher are the customer equity. Customer equity may even be a better way to measure the company’s performance than market share or current sales.
Marketers cannot create customer value and build customer relationships by themselves. They need to work closely with other company departments and with partners outside the firm.
In addition to being good at customer relationship management, they also need to be good at partner relationship management.