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ChapterOneMarketing:CreatingandCapturingCustomerValue
ChapterOneMarketing:CreatinCreatingandCapturingCustomerValueWhatIsMarketing?UnderstandtheMarketplaceandCustomerNeedsDesigningaCustomer-DrivenMarketingStrategyPreparinganIntegratedMarketingPlanandProgramBuildingCustomerRelationshipsCapturingValuefromCustomersTheChangingMarketingLandscapeTopicOutlineCreatingandCapturingCustomeWhatIsMarketing?MarketingisaprocessbywhichcompaniescreatevalueforcustomersandbuildstrongcustomerrelationshipstocapturevaluefromcustomersinreturnWhatIsMarketing?MarketingisWhatIsMarketing?TheMarketingProcessWhatIsMarketing?TheMarketinUnderstandingtheMarketplace
andCustomerNeedsCustomerneeds,wants,anddemandsMarketofferingsValueandsatisfactionExchangesandrelationshipsMarketsCoreConceptsUnderstandingtheMarketplaceUnderstandingtheMarketplace
andCustomerNeedsNeedsStatesofdeprivationPhysical—food,clothing,warmth,safetySocial—belongingandaffectionIndividual—knowledgeandself-expressionWantsFormthatneedstakeastheyareshapedbycultureandindividualpersonalityDemandsWantsbackedbybuyingpowerCustomerNeeds,Wants,andDemandsUnderstandingtheMarketplace
UnderstandingtheMarketplace
andCustomerNeedsMarketofferingsaresomecombinationofproducts,services,information,orexperiencesofferedtoamarkettosatisfyaneedorwantMarketingmyopiaisfocusingonlyonexistingwantsandlosingsightofunderlyingconsumerneedsUnderstandingtheMarketplace
UnderstandingtheMarketplace
andCustomerNeedsCustomerValueandSatisfactionExpectationsCustomersValueandsatisfactionMarketersSettherightlevelofexpectationsNottoohighorlowUnderstandingtheMarketplace
ExchangeistheactofobtainingadesiredobjectfromsomeonebyofferingsomethinginreturnUnderstandingtheMarketplace
andCustomerNeedsExchangeistheactofobtainiUnderstandingtheMarketplace
andCustomerNeedsMarketsarethesetofactualandpotentialbuyersofaproductUnderstandingtheMarketplace
DesigningaCustomer-DrivenMarketingStrategyMarketingmanagementistheartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththemWhatcustomerswillweserve?Howcanwebestservethesecustomers?DesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketsegmentationreferstodividingthemarketsintosegmentsofcustomersTargetmarketingreferstowhichsegmentstogoafterSelectingCustomerstoServeDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyDemarketingismarketingtoreducedemandtemporarilyorpermanently;theaimisnottodestroydemandbuttoreduceorshiftitSelectingCustomerstoServeDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyChoosingaValuePropositionThevaluepropositionisthesetofbenefitsorvaluesacompanypromisestodelivertocustomerstosatisfytheirneedsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyProductionconceptProductconceptSellingconceptMarketingconceptSocietalconceptMarketingManagementOrientationsDesigningaCustomer-DrivenMa
DesigningaCustomer-DrivenMarketingStrategyProductionconceptistheideathatconsumerswillfavorproductsthatareavailableorhighlyaffordableMarketingManagementOrientations
DesigningaCustomer-DrivenM
DesigningaCustomer-DrivenMarketingStrategyProductconceptistheideathatconsumerswillfavorproductsthatofferthemostquality,performance,andfeatures.Organizationshouldthereforedevoteitsenergytomakingcontinuousproductimprovements.MarketingManagementOrientations
DesigningaCustomer-DrivenMDesigningaCustomer-DrivenMarketingStrategySellingconceptistheideathatconsumerswillnotbuyenoughofthefirm’sproductsunlessitundertakesalargescalesellingandpromotioneffortMarketingManagementOrientationsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketingManagementOrientationsMarketingconceptistheideathatachievingorganizationalgoalsdependsonknowingtheneedsandwantsofthetargetmarketsanddeliveringthedesiredsatisfactionsbetterthancompetitorsdoDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketingManagementOrientationsSocietalmarketingconceptistheideathatacompanyshouldmakegoodmarketingdecisionsbyconsideringconsumers’wants,thecompany’srequirements,consumers’long-terminterests,andsociety’slong-runinterestsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyDesigningaCustomer-DrivenMaThemarketingmixisthesetoftools(fourPs)thefirmusestoimplementitsmarketingstrategy.Itincludesproduct,price,promotion,andplace.Integratedmarketingprogramisacomprehensiveplanthatcommunicatesanddeliverstheintendedvaluetochosencustomers.PreparinganIntegratedMarketingPlanandProgramThemarketingmixisthesetoBuildingCustomerRelationshipsTheoverallprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfactionCustomerRelationshipManagement(CRM)BuildingCustomerRelationshipBuildingCustomerRelationshipsRelationshipBuildingBlocks:CustomerValueandSatisfactionCustomer-perceivedvalueThedifferencebetweentotalcustomervalueandtotalcustomercostCustomersatisfactionTheextenttowhichaproduct’sperceivedperformancematchesabuyer’sexpectationsBuildingCustomerRelationshipBuildingCustomerRelationshipsCustomerRelationshipLevelsandToolsBasicRelationshipsFullPartnershipsBuildingCustomerRelationshipBuildingCustomerRelationshipsRelatingwithmorecarefullyselectedcustomersusesselectiverelationshipmanagementtotargetfewer,moreprofitablecustomersRelatingmoredeeplyandinteractivelybyincorporatingmoreinteractivetwowayrelationshipsthroughblogs,Websites,onlinecommunitiesandsocialnetworksTheChangingNatureofCustomerRelationshipsBuildingCustomerRelationshipPartnerrelationshipmanagementinvolvesworkingcloselywithpartnersinothercompanydepartmentsandoutsidethecompanytojointlybringgreatervaluetocustomersBuildingCustomerRelationshipsPartnerrelationshipmanagemenBuildingCustomerRelationshipsPartnersinsidethecompanyiseveryfunctionareainteractingwithcustomersElectronicallyCross-functionalteamsPartnersoutsidethecompanyishowmarketersconnectwiththeirsuppliers,channelpartners,andcompetitorsbydevelopingpartnershipsPartnerRelationshipManagementBuildingCustomerRelationshipBuildingCustomerRelationshipsSupplychainisachannelthatstretchesfromrawmaterialstocomponentstofinalproductstofinalbuyersSupplymanagementStrategicpartnersStrategicalliancesPartnerRelationshipManagementBuildingCustomerRelationshipCapturingValuefromCustomersCustomerlifetimevalueisthevalueoftheentirestreamofpurchasesthatthecustomerwould
makeovera
lifetimeof
patronageCreatingCustomerLoyaltyandRetentionCapturingValuefromCustomersCapturingValuefromCustomersShareofcustomeristheportionofthecustomer’spurchasingthatacompanygetsinitsproductcategoriesGrowingShareofCustomerCapturingValuefromCustomers
CapturingValuefromCustomersCustomerequityisthetotalcombinedcustomerlifetimevaluesofallofthecompany’scustomers
CapturingValuefromCustomerCapturingValuefromCustomersBuildingtherightrelationshipswiththerightcustomersinvolvestreatingcustomersasassetsthatneedtobemanagedandmaximizedDifferenttypesofcustomersrequiredifferentrelationshipmanagementstrategiesBuildtherightrelationshipwiththerightcustomersBuildingCustomerEquityCapturingValuefromCustomers
TheChangingMarketingLandscapeDigitalageRapidglobalizationEthicsandsocialresponsibilityNot-for-profitmarketingMajorDevelopments
TheChangingMarketingLandscSo,WhatIsMarketing?
PullingItAllTogetherSo,WhatIsMarketing?
PullinAllrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwise,withoutthepriorwrittenpermissionofthepublisher.PrintedintheUnitedStatesofAmerica.Copyright©2010PearsonEducation,Inc.
PublishingasPrenticeHallAllrightsreserved.Noparto
ChapterOneMarketing:CreatingandCapturingCustomerValue
ChapterOneMarketing:CreatinCreatingandCapturingCustomerValueWhatIsMarketing?UnderstandtheMarketplaceandCustomerNeedsDesigningaCustomer-DrivenMarketingStrategyPreparinganIntegratedMarketingPlanandProgramBuildingCustomerRelationshipsCapturingValuefromCustomersTheChangingMarketingLandscapeTopicOutlineCreatingandCapturingCustomeWhatIsMarketing?MarketingisaprocessbywhichcompaniescreatevalueforcustomersandbuildstrongcustomerrelationshipstocapturevaluefromcustomersinreturnWhatIsMarketing?MarketingisWhatIsMarketing?TheMarketingProcessWhatIsMarketing?TheMarketinUnderstandingtheMarketplace
andCustomerNeedsCustomerneeds,wants,anddemandsMarketofferingsValueandsatisfactionExchangesandrelationshipsMarketsCoreConceptsUnderstandingtheMarketplaceUnderstandingtheMarketplace
andCustomerNeedsNeedsStatesofdeprivationPhysical—food,clothing,warmth,safetySocial—belongingandaffectionIndividual—knowledgeandself-expressionWantsFormthatneedstakeastheyareshapedbycultureandindividualpersonalityDemandsWantsbackedbybuyingpowerCustomerNeeds,Wants,andDemandsUnderstandingtheMarketplace
UnderstandingtheMarketplace
andCustomerNeedsMarketofferingsaresomecombinationofproducts,services,information,orexperiencesofferedtoamarkettosatisfyaneedorwantMarketingmyopiaisfocusingonlyonexistingwantsandlosingsightofunderlyingconsumerneedsUnderstandingtheMarketplace
UnderstandingtheMarketplace
andCustomerNeedsCustomerValueandSatisfactionExpectationsCustomersValueandsatisfactionMarketersSettherightlevelofexpectationsNottoohighorlowUnderstandingtheMarketplace
ExchangeistheactofobtainingadesiredobjectfromsomeonebyofferingsomethinginreturnUnderstandingtheMarketplace
andCustomerNeedsExchangeistheactofobtainiUnderstandingtheMarketplace
andCustomerNeedsMarketsarethesetofactualandpotentialbuyersofaproductUnderstandingtheMarketplace
DesigningaCustomer-DrivenMarketingStrategyMarketingmanagementistheartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththemWhatcustomerswillweserve?Howcanwebestservethesecustomers?DesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketsegmentationreferstodividingthemarketsintosegmentsofcustomersTargetmarketingreferstowhichsegmentstogoafterSelectingCustomerstoServeDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyDemarketingismarketingtoreducedemandtemporarilyorpermanently;theaimisnottodestroydemandbuttoreduceorshiftitSelectingCustomerstoServeDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyChoosingaValuePropositionThevaluepropositionisthesetofbenefitsorvaluesacompanypromisestodelivertocustomerstosatisfytheirneedsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyProductionconceptProductconceptSellingconceptMarketingconceptSocietalconceptMarketingManagementOrientationsDesigningaCustomer-DrivenMa
DesigningaCustomer-DrivenMarketingStrategyProductionconceptistheideathatconsumerswillfavorproductsthatareavailableorhighlyaffordableMarketingManagementOrientations
DesigningaCustomer-DrivenM
DesigningaCustomer-DrivenMarketingStrategyProductconceptistheideathatconsumerswillfavorproductsthatofferthemostquality,performance,andfeatures.Organizationshouldthereforedevoteitsenergytomakingcontinuousproductimprovements.MarketingManagementOrientations
DesigningaCustomer-DrivenMDesigningaCustomer-DrivenMarketingStrategySellingconceptistheideathatconsumerswillnotbuyenoughofthefirm’sproductsunlessitundertakesalargescalesellingandpromotioneffortMarketingManagementOrientationsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketingManagementOrientationsMarketingconceptistheideathatachievingorganizationalgoalsdependsonknowingtheneedsandwantsofthetargetmarketsanddeliveringthedesiredsatisfactionsbetterthancompetitorsdoDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyMarketingManagementOrientationsSocietalmarketingconceptistheideathatacompanyshouldmakegoodmarketingdecisionsbyconsideringconsumers’wants,thecompany’srequirements,consumers’long-terminterests,andsociety’slong-runinterestsDesigningaCustomer-DrivenMaDesigningaCustomer-DrivenMarketingStrategyDesigningaCustomer-DrivenMaThemarketingmixisthesetoftools(fourPs)thefirmusestoimplementitsmarketingstrategy.Itincludesproduct,price,promotion,andplace.Integratedmarketingprogramisacomprehensiveplanthatcommunicatesanddeliverstheintendedvaluetochosencustomers.PreparinganIntegratedMarketingPlanandProgramThemarketingmixisthesetoBuildingCustomerRelationshipsTheoverallprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfactionCustomerRelationshipManagement(CRM)BuildingCustomerRelationshipBuildingCustomerRelationshipsRelationshipBuildingBlocks:CustomerValueandSatisfactionCustomer-perceivedvalueThedifferencebetweentotalcustomervalueandtotalcustomercostCustomersatisfactionTheextenttowhichaproduct’sperceivedperformancematchesabuyer’sexpectationsBuildingCustomerRelationshipBuildingCustomerRelationshipsCustomerRelationshipLevelsandToolsBasicRelationshipsFullPartnershipsBuildingCustomerRelationshipBuildingCustomerRelationshipsRelatingwithmorecarefullyselectedcustomersusesselectiverelationshipmanagementtotargetfewer,moreprofitablecustomersRelatingmoredeeplyandinteractivelybyincorporatingmoreinteractivetwowayrelationshipsthroughblogs,Websites,onlinecommunitiesandsocialnetworksTheChangingNatureofCustomerRelationshipsBuildingCustomerRelationshipPartnerrelationshipmanagementinvolvesworkingcloselywithpartnersinothercompanydepartmentsandoutsidethecompanytojointlybringgreatervaluetocustomersBuildingCustomerRelationshipsPartnerrelationshipmanagemenBuildingCustomerRelationshipsPartnersinsidethecompanyiseveryfunctionareainteractingwithcustomersElectronicallyCross-functionalteamsPartnersoutsidethecompanyishowmarketersconnectwiththeirsuppliers,channelpartners,andcompetitorsbydevelopingpartnershipsPartnerRelationshipManagementBuildingCustomerRelationshipBuildingCustomerRelationshipsSupplychainisachannelthatstretchesfromrawmaterialstocomponentstofinal
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