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Understanding the marketplace
and customer needs
Customer needs, wants and demands
Principles of Marketing Management
Customer Relationships
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Understanding the marketplace
and customer needs
Market offerings are some
Exchange is the act of
combination of products,
services, information, or
experiences offered to a market
to satisfy a need or want.
obtaining a desired
object from someone by
offering something in
return.
Marketing myopia is focusing
only on existing wants and losing
sight of underlying consumer
needs.
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Customer value and satisfaction expectations
Customers
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low
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Designing a customerdriven marketing strategy
All customers are not the same
Marketing management is the art
and science of choosing target
market segments and building
profitable relationships with them.
What customers will we serve?
How can we best serve these
customers?
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Value Proposition
Value proposition is the set of benefits
or values a company promises to deliver
to customers to satisfy their needs. In this
declarative statement, you’ll convince
your target audience why they should buy
your product instead of your competitors’.
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Branding
The marketing process
A name, term, sign, symbol or
design or a combination of
these, that identifies the
products or services of one
seller or group of sellers and
differentiates them from those of
competitors
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A simple model of the marketing process
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Building customer relationships
(Continued)
Building customer relationships
Customer relationship management (CRM)
Relationship building blocks: customer value and
satisfaction
The overall process of
building and maintaining
profitable customer
relationships by delivering
superior customer value
and satisfaction.
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Building customer relationships
(Continued)
Building customer relationships
(Continued)
The changing nature of customer
relationships
The changing nature of customer relationships
Customer-managed relationships:
Marketing relationships in which
customers, empowered by today’s
new digital technologies, interact with
companies and with each other to
shape their relationships with brands.
• Relating with more carefully selected customers
using selective relationship management to target
fewer, more profitable customers.
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, websites, online
communities and social networks.
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The changing marketing landscape
(Continued)
The changing marketing landscape
Uncertain economic environment
• Rapid globalisation
• Sustainable marketing
• Not-for-profit marketing
• New consumer frugality
• Marketers focus on value for the
customer
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The changing marketing landscape
(Continued)
Capturing value from customers
Creating customer loyalty and retention
Digital age
• People are connected continuously to
people and information worldwide.
• Marketers have great new tools to
communicate with customers.
• Internet + mobile communication
devices create environments for
online marketing.
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Customer lifetime value is the
value of the entire stream of
purchases that the customer
would make over a lifetime of
patronage.
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Capturing value from customers
(Continued)
Capturing value from customers
(Continued)
Customer equity is the total
combined customer lifetime
values of all of the
company’s customers.
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Capturing value from customers cont/
Capturing value from customers
(Continued)
Building customer equity
Potential Profitability
Building customer equity
• Right relationships with the right
customers involve treating
customers as assets that need to
be managed and maximised.
• Different types of customers
require different relationship
management strategies.
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Butterflies
True Friends
Good fit between
company’s offerings and
customer’s needs: high
profit potential
Good fit between
company’s offerings and
customer’s needs: highest
profit potential
Strangers
Barnacles
Little fit between
company’s offerings and
customer’s needs: lowest
profit potential
Limited fit between
company’s offerings and
customer’s needs: low
profit potential
Projected Loyalty
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Capturing value from customers cont/
So, what is marketing?
Pulling it all together
Potential Profitability
Different groups of customers require different
relationship management strategies
Butterflies
???
True Friends
: the firm wants to make continuous
relationship investments to delight
these good customers and turn
them into ‘true believers’, loyal
customers who will tell others
about their good experiences
Strangers
???
Barnacles
: if they cannot be made profitable,
they should be fired. An example is
smaller bank customers who bank
regularly but do not generate
enough returns to cover the costs
of maintaining their accounts
Projected Loyalty
An expanded model of the
marketing process
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• Consumers
• Building customer
relationships
• Capturing value from
customers
• The changing marketing
landscape
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