Important TerminologiesMarketing Management

The art and science of choosing target markets and building profitable relationship with them.

The marketing manager’s aim is to find, keep and grow target customers by creating, delivering and communicating superior customer value.

Important TerminologiesMarketing Management

Marketing management gives answer to two

questions:

(1) What customers will be served (target

market)

(2) How can these customers will be best served

(value proposition)

Important Terminologies

Value Proposition

A company’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs.

Value proposition differentiates one brand from another. They answer the question “Why should I buy your brand rather than a competitor’s?

Companies must design strong value propositions that give them the greatest advantages in their target markets.

Important Terminologies

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

It is the most important concept of modern marketing.

Important TerminologiesCustomer Relationship Management

Earlier it was narrowly defined as a customer data management activity.

Now it has a broader meaning and it deals with all aspects of acquiring, keeping and growing customers.

According to Drucker, building customer relationships, which involve a series of interactions between individuals and a company over time, will produce more sales and profits than will focusing on sales transactions alone.

Important Terminologies

Customer Perceived Value

The difference between total customer value and total customer cost.

Customer Cost

The customer's perceived expenses that would be incurred in acquiring and using a product.

Important Terminologies

Customer Satisfaction

The extent to which a product’s perceived performance matches a buyer’s expectations.

If performance matches expectations, the customer is satisfied and if performance exceeds expectations, the customer is delighted.

Customer Lifetime Value

The value of the entire stream of purchases the a customer would make over a lifetime of patronage.

Important Terminologies

Customer Equity

The total combined customer lifetime values of all of the company’s customers.

The more loyal the firm’s profitable customers, the higher the firm’s customer equity.

Customer equity may be a better measure of a firm’s performance than current sales or market share.

Sales and market share reflect the past, customer equity suggests the future.

Example: Cadillac Vs BMW

The Marketing Process

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

A Simple Model of Marketing Process

Understand the market- Design a customer- Construct an integrated Build profitable relationship Capture value fromplace and customer driven marketing marketing program and create customer customers to create needs and wants strategy that delivers superior delight profits and customers

value equity.

In the first step companies work to understand customers.In the second, third and fourth step companieswork to create customer value and build strong customerrelationships.In the fifth step companies reap the rewards of creatingsuperior customer value. By creating value for customersthey in turn capture value from customers in the form ofsales, profits and long term customer equity.