Kotler's Marketing Management: Connecting with Customers
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The document discusses the importance of connecting with customers for effective marketing. It outlines that (1) good marketing starts with strong customer relationships built on trust and loyalty over time, (2) understanding how consumers think and feel is key to offering value tailored to each customer segment, and (3) success in business markets requires understanding organizational needs, resources, policies, and purchasing procedures. The conclusion emphasizes that good marketing is based on thoroughly understanding target customers and satisfying their needs better than competitors.
Kotler's Marketing Management: Connecting with Customers
- 1. MARKETING MANAGEMENT CONNECTING WITH CUSTOMERS Nadia Tantuco Ateneo Graduate School of Business October 3, 2014 ph.linkedin.com/in/nadiatantuco
- 2. OUTLINE: Why do we need to connect with customers? 1) Good marketing starts with strong customer relationships Creating Long-term Loyalty Relationships (chapter 5) 2) To understand how consumers think, feel, and act; and offer clear value to each and every target consumer Analyzing Consumer Markets (chapter 6) 3) Sellers need to understand business organizations, in order to create and capture value Analyzing Business Markets (chapter 7)
- 3. OUTLINE: Why do we need to connect with customers? 1) Good marketing starts with strong customer relationships Creating Long-term Loyalty Relationships (chapter 5) 2) To understand how consumers think, feel, and act; and offer clear value to each and every target consumer Analyzing Consumer Markets (chapter 6) 3) Sellers need to understand business organizations, in order to create and capture value Analyzing Business Markets (chapter 7)
- 4. Creating loyal customers is at the heart of every business. • Marketers must build: Customer Value Satisfaction Loyalty
- 5. Customer Value Customers are more than ever better informed and educated. • They have tools to verify companies’ product claims. • They can seek for better alternatives. • They are value maximizers.
- 6. Customer Value Managers must analyze their strengths and weaknesses versus competition. • Customer Value Analysis steps: 1. Identify attributes and benefits that customers value 2. Rate in terms of priority or importance 3. Compare with competitors’ attributes and benefits 4. Examine customer values in specific segments 5. Monitor customer values over time
- 7. Customer Value Delivering a high customer value means creating a compelling value proposition. • A value proposition… – Consists of all the benefits the company promises to deliver – Is more than the core positioning of the offering – A promise about the experience customers can expect
- 8. Customer Satisfaction A product offer must meet customer expectations to generate satisfaction. • A customer-centered firm seeks to create high customer satisfaction. (But this is not the ultimate goal.) • The company must balance delivering high customer satisfaction and delivering acceptable levels to other stakeholders, given its total resources.
- 9. Customer Satisfaction Satisfaction also depends on product or service quality. • Higher levels of quality can better support higher prices and lower costs. • Quality is clearly the key to value creation and customer satisfaction.
- 10. Customer Loyalty Marketing is the art of attracting and keeping profitable customers. • Customer-Product Profitability Analysis:
- 11. Customer Loyalty Companies must use information wisely and interact with their customers. • To cultivate strong customer relationships, companies must… 1. Manage customer relationships 2. Attract and retain customers 3. Build Loyalty
- 12. Cultivating Customer Relationships 1: The goal of customer relationship management (CRM) is to maximize loyalty. • CRM is a process that… – Manages detailed information about individuals – Distinguishes customer “touch points” – Enables companies to provide real-time customer service
- 13. Cultivating Customer Relationships 1: Companies can create stronger bonds with customers by personalizing relationships. • CRM can be practiced through… Personalized Marketing – creating brand relevance for each individual Customer Empowerment – consumers as brand evangelists/ambassadors Recommendations from consumers
- 14. Cultivating Customer Relationships 2: Attracting and retaining customers require companies to manage various consumer levels. • The different levels in a Marketing Funnel:
- 15. Cultivating Customer Relationships 2: Winning companies improve their value through excellent management of their customer base. • Strategies in managing the customer base: 1. Reducing customer defection 2. Increasing company-customer engagement 3. Creating new offerings and opportunities for existing customers 4. Managing low-profit customers 5. Focusing on high-profit customers
- 16. Cultivating Customer Relationships 3: Creating a strong, tight connection to customers is the key to long-term success. • Building loyalty though… Understanding customer point of view Developing loyalty programs Creating customer databases
- 17. Cultivating Customer Relationships 3: Database marketing helps companies in knowing more about their target market. • However, assumptions gathered from these databases may not always hold true. • Companies must proceed thoughtfully in how they would use the information provided.
- 18. Customers are value maximizers. • They form expectations of value and act on it. • They will buy from the company that they perceive has the highest customer-delivered value. • Companies must cultivate strong customer relationships to capture consumers and build loyalty.
- 19. OUTLINE: Why do we need to connect with customers? 1) Good marketing starts with strong customer relationships Creating Long-term Loyalty Relationships (chapter 5) 2) To understand how consumers think, feel, and act; and offer clear value to each and every target consumer Analyzing Consumer Markets (chapter 6) 3) Sellers need to understand business organizations, in order to create and capture value Analyzing Business Markets (chapter 7)
- 20. The aim of marketing is to meet & satisfy target’s needs and wants (better than competition). • Marketers must understand: What influences consumer behavior Key psychological processes The buying decision process
- 21. Influences of consumer behavior 1: Culture is the fundamental determinant of a person’s wants and behavior. • Values differ per country • Subcultures exist • Social classes
- 22. Influences of consumer behavior 2: Social factors also affect our buying behavior. • Reference groups • Family • Social roles/status
- 23. Influences of consumer behavior 3: Personal factors have a direct impact on consumer behavior. • Age • Occupation • Personality • Lifestyle and values
- 24. It’s important to understand how marketing stimulus affects consumers’ purchase decision. • Model of consumer behavior:
- 25. Key Psychological Process 1: Motivation is when a need becomes aroused to a level of intensity that drives us to act. • 3 theories of human motivation: 1. Freud’s 2. Maslow’s 3. Herzberg’s
- 26. Key Psychological Process 2: Perception is the process of how we interpret information to create a meaningful picture of the world. • Different perceptions of things result from: Selective… 1. Attention 2. Distortion 3. Retention
- 27. Key Psychological Process 3: Learning induces changes in our behavior arising from experience. • Learning is produced through the interplay of drives, stimuli, cues, responses, and reinforcement. • Marketers can thus build product demand by associating it with strong drives, using motivational cues, and providing positive reinforcement.
- 28. Key Psychological Process 4: Emotions are involved when consumer response is not all rational but invokes different feelings. • Emotional marketing campaigns help build stronger connections with consumers. • People can relate more to the brand instead of just associating it as a product.
- 29. Key Psychological Process 5: Memory helps us create brand associations. • Brand associations consists of all brand-related thoughts, feelings, images, experiences, and so on that become linked to the brand. • Marketing can be a way of making sure that consumers have positive brand experience and knowledge.
- 30. Smart companies know that they must understand customers’ buying decision process. • The 5-stage model of the Consumer Buying Process:
- 31. Stage 1: Problem recognition Circumstances that trigger a particular need should be identified. • The process starts when the buyer recognizes a problem or a need. • Gathering information to identify these triggers are needed to develop key marketing strategies.
- 32. Stage 2: Information search Companies must strategize to get its brand into consumers’ awareness and choice sets. • Consumers often search for limited amounts of information. • Effective information often comes from personal or experiential sources, if not public sources that are independent authorities.
- 33. Stage 3: Evaluation of alternatives Current models of evaluation see consumers forming judgments based on a conscious and rational basis. • Some basic concepts to better understand the consumer evaluation process: 1. Satisfy a need 2. Looking for certain benefits 3. Product as a bundle of attributes
- 34. Stage 4: Purchase Decision A consumer may form an intention buy the most preferred brand in a choice set. • 5 Sub-decisions: 1. Brand 2. Dealer 3. Quantity 4. Timing 5. Payment method
- 35. Stage 5: Post-purchase Decision The Marketer’s job does not end with the purchase. • After purchase, marketers must monitor post-purchase… Satisfaction Actions Uses and disposal
- 36. Consumers are constructive decision makers. • Their decisions are influenced by contextual influences. • They often exhibit low involvement in their decisions. • Thus, marketers must be well informed about consumer behavior and their buying decision process.
- 37. OUTLINE: Why do we need to connect with customers? 1) Good marketing starts with strong customer relationships Creating Long-term Loyalty Relationships (chapter 5) 2) To understand how consumers think, feel, and act; and offer clear value to each and every target consumer Analyzing Consumer Markets (chapter 6) 3) Sellers need to understand business organizations, in order to create and capture value Analyzing Business Markets (chapter 7)
- 38. Some of the world’s most valued brands belong to business markets. • Business organizations not only sell; they also buy vast quantities of… – raw materials – supplies – manufacturing components – plant and equipment – business services
- 39. Business markets differ from consumer markets. • Business markets have… Fewer and larger buys Closer customer relationship More geographically centered businesses
- 40. Cultivating the right relationships with businesses is important for any holistic marketing program. • Business marketers must form strong bonds with their customers. • Some customers, however, may prefer a transactional relationship.
- 41. SUMMARY: Why do we need to connect with customers? 1) Well-conceived holistic marketing orientation starts with strong customer relationships. Creating Long-term Loyalty Relationships (chapter 5) 2) To have a thorough understanding of how consumers think, feel, and act; and offer clear value to each and every target consumer. Analyzing Consumer Markets (chapter 6) 3) To create and capture value, sellers need to understand business organizations’ needs, resources, policies, and buying procedures. Analyzing Business Markets (chapter 7)
- 42. CONCLUSION: Why do we need to connect with customers? • Good marketing starts with… Understanding the target consumer and Knowing how to satisfy their needs and wants.
- 43. MARKETING MANAGEMENT CONNECTING WITH CUSTOMERS Nadia Tantuco Ateneo Graduate School of Business October 3, 2014 ph.linkedin.com/in/nadiatantuco