Mantra of marketing,mix,customer values

Mantra of Marketing

Marketing’s job is to create, communicate and deliver value to a target market at a profit. Market Management needs to “Create Value,” “Communicate Value,”

and “Deliver Value.” There are three businesses here: Product Management; Brand Management; and

Customer Management. (Kotler at London Business Forum)

Marketing Vs. Selling

SELLING

1 Emphasis is on the product2 Company Manufactures the product first3 Management is sales volume oriented4 Planning is short-run-oriented in terms of today’s products and markets5 Stresses needs of seller6 Views business as a good producing process

MARKETING

1 Emphasis on consumer needs wants2 Company first determines customers needs and wants and then decides out how to deliver a product to satisfy these wants3 Management is profit oriented4 Planning is long-run-oriented in today’s products and terms of new products, tomorrow’s markets and future growth5 Stresses needs and wants of buyers6 Views business as consumer producing process satisfying process

Marketing Vs. SellingSelling7 Emphasis on staying with existing technology and reducing costs

8 Different departments work as in a highly separate water tight compartments

9 Cost determines Price

10 Selling views customer as a last link in business

Marketing7 Emphasis on innovation on every existing technology and reducing every sphere, on providing better costs value to the customer by adopting a superior technology

8 All departments of the business integrated manner, the sole purpose being generation of consumer satisfaction

9. Consumer determine price, price determines cost

10. Marketing views the customer last link in business as the very purpose of the business

Marketing Mix

Marketing Mix is the combination of four elements, called the 4P’s (Product, Price, Promotion and

Place), that every company has the option of adding, subtracting, or modifying in order to create a

desired marketing strategy. (Philip Kotler)

Marketing Mix - A mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called marketing mix. Several concepts and ideas combined together to formulate final strategies helpful in making a brand popular amongst the masses form marketing mix.

Elements of Marketing MixThe elements of marketing mix are often called the four P’s of marketing.• Product- Goods manufactured by organizations for the end-users are called products. (Tangible

Product and Intangible Product -Services)• Price - The money which a buyer pays for a product is called as price of the product. • Place - Place refers to the location where the products are available and can be sold or

purchased.• Promotion - Advertising, Print media, Television, radio , Billboards, hoardings, banners, Taglines ,

Word of mouth.

Lately three more P’s have been added to the marketing mix. They are as follows:• People - The individuals involved in the sale and purchase of products or services come under

people.• Process - Process includes the various mechanisms and procedures which help the product to

finally reach its target market• Physical Evidence - With the help of physical evidence, a marketer tries to communicate the

USP’s and benefits of a product to the end users

Marketing Mix

Product Mix

• Set of all product offered for sale by a company.• It consist of various product line.• Any company’s product mix has four dimension

:1. Width,2. Length,3. Depth,4. Consistency.

Product Mix

• Width : Number of different product lines carries by the company.

• Length : Total number of items in the product mix of the company.

• Depth : Assortment of size, color and models offered in each item of a product line.

• Consistency : It refers to the relationship of various product line either in their end use, production requirement, distribution channel or other way.

Product Mix (P&G)

Creating Customer Value, Satisfaction, and Loyalty

Marketing Management, 13th ed

5

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

5-12

Chapter Questions• What are customer value, satisfaction, and loyalty,

and how can companies deliver them?• What is the lifetime value of customers?• How can companies cultivate strong customer

relationships?• How can companies both attract and retain

customers?• What is database marketing?


5-13

What is Customer Perceived Value?

Customer perceived value is the difference between the prospective customer’s

evaluation of all the benefits and all the costs of an offering and the perceived alternatives.


5-14

Figure 5.2 Determinants of Customer Perceived Value

Image benefit Psychological cost

Personal benefit Energy cost

Services benefit Time cost

Product benefit Monetary cost

Total customer benefit Total customer cost


5-15

Steps in a Customer Value Analysis

• Identify major attributes and benefits that customers value

• Assess the qualitative importance of different attributes and benefits

• Assess the company’s and competitor’s performances on the different customer values against rated importance

• Examine ratings of specific segments• Monitor customer values over time


5-16

What is Loyalty?

Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service

in the future despite situational influences and marketing efforts having the potential to

cause switching behavior.


5-17

Top Brands in Customer Loyalty

• Avis• Google• L.L. Bean• Samsung (mobile phones)• Yahoo!• Canon (office copiers)

• Land’s End• Coors• Hyatt• Marriott• Verizon• KeySpan Energy• Miller Genuine Draft• Amazon


5-18

Measuring Satisfaction

• Periodic surveys• Customer loss rate• Mystery shoppers• Monitor competitive performance


5-19

What is Quality?

Quality is the totality of features andcharacteristics of a product or

service that bear on its ability to satisfy

stated or implied needs.


5-20

Maximizing Customer Lifetime Value

• Customer profitability• Customer equity• Lifetime value


5-21

What is Customer Relationship Management?

CRM is the process of carefully managing detailed information about individual

customers and all customer touch points to maximize customer loyalty.


5-22

Framework for CRM

• Identify prospects and customers• Differentiate customers by needs and value to

company• Interact to improve knowledge• Customize for each customer


5-23

Customer Retention

• Acquisition of customers can cost 5 times more than retaining current customers.

• The average customer loses 10% of its customers each year.

• A 5% reduction to the customer defection rate can increase profits by 25% to 85%.

• The customer profit rate increases over the life of a retained customer.

Customer Life time Value

customer lifetime value (CLV), lifetime customer value (LCV), or user lifetime

value (LTV) is a prediction of the net profit attributed to the entire future relationship with

a customer.

Customer Lifetime Value

Advantages of CLV:• management of customer relationship as an asset• monitoring the impact of management strategies and marketing investments on the

value of customer assets• determination of the optimal level of investments in marketing and sales activities• encourages marketers to focus on the long-term value of customers instead of

investing resources in acquiring "cheap" customers with low total revenue value• implementation of sensitivity analysis in order to determinate getting impact by

spending extra money on each customer.

• optimal allocation of limited resources for on going marketing activities in order to achieve a maximum return

• a good basis for selecting customers and for decision making regarding customer specific communication strategies

• measurement of customer loyalty (proportion of purchase, probability of purchase and repurchase, purchase frequency and sequence etc.

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Mantra of marketing,mix,customer values

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