Managing Profitable Customer Relationships

Tunis Business School
2019 - 2020
Mr Mohamed Ben Nouri
bennouri.universite@gmail.com
Med.bennouri@tunis-business-school.tn
Fundamentals of Marketing
BCOR 210
Marketing: Managing Profitable Customer

Relationships
Copyright © 2008 Pearson Education Canada 1-1 Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Define marketing and outline the marketing process.
2. Explain the importance of understanding customers
and the marketplace, and identify the five core
marketplace concepts
3. Identify the key elements of a customer-driven
marketing strategy and discuss the marketing
management orientations.
4. Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
5. Describe the major trends and forces changing the
marketing landscape.
What Is Marketing?
• Marketing is about managing profitable
customer relationships
– Attracting new customers
– Retaining and growing current customers
• Marketing Defined:
– “Marketing is a social and managerial process by
which individuals and groups obtain what they need
and want through creating and exchanging value
with others”
The Marketing Process
Core
Core Marketing
Marketing Concepts
Concepts
Products
,Needs, wants and
and demands Services
Core
Core
Marketing
Marketing
Concepts
Concepts
Markets
,Value, satisfaction
and quality
,Exchange, transactions
and relationships
Understanding the
Marketplace
• Core Concepts • Need
– Understand the marketplace – State of felt deprivation
and customer wants and • Wants
needs
– The form of needs as shaped
– Design a customer-driven
by culture and the
marketing strategy
individual
– Construct a marketing
program that delivers
• Demands
superior value – Wants which are backed by
– Build profitable relationships buying power
and create customer delight
– Capture value from customers
to create profits and customer
quality
Understanding the
Marketplace
• Core Concepts • Marketing offer
– Understand the marketplace – Combination of
and customer wants and
needs (cont.) products, services,
– Design a customer-driven information or
marketing strategy experiences that
– Construct a marketing satisfy a need or
program that delivers want
superior value – Offer may include
– Build profitable relationships
services, activities,
people, places,
information or
quality ideas
Understanding the
Marketplace
• Core Concepts • Value
– Understand the marketplace – Customers form
needs (cont.) expectations regarding
– Design a customer-driven value
marketing strategy – Marketers must deliver
– Construct a marketing value to consumers
program that delivers
superior value • Satisfaction
– Build profitable relationships – A satisfied customer will
and create customer delight buy again and tell others
about their good experience
quality
Understanding the
Marketplace
• Core Concepts • Exchange
– Understand the marketplace – The act of obtaining a
and customer wants and desired object from
needs (cont.) someone by offering
– Design a customer-driven something in return
marketing strategy – One exchange is not the
– Construct a marketing goal, relationships with
program that delivers several exchanges are the
superior value goal
– Build profitable relationships – Relationships are built
and create customer delight through delivering value
– Capture value from customers and satisfaction
quality
Understanding the
Marketplace
• Core Concepts • Market
– Understand the marketplace
– Set of actual and
needs (cont.) potential buyers of a
– Design a customer-driven product
marketing strategy
– Construct a marketing
– Marketers seek buyers
program that delivers that are profitable
superior value
– Build profitable relationships
quality
Understanding the Marketplace
Designing a Customer-Driven
Marketing Strategy
• Marketing management is “the art and
science of choosing target markets and
building profitable relationships with
them.”
• A winning marketing strategy
– What customers will we serve?
– How can we serve these customers best?
Designing a Customer-Driven
Marketing Strategy
• What customers will we serve?
– Market segmentation and target marketing
– Marketers select customers that can be served profitably
– Known as customer management and demand
management
• How can we serve these customers best?
– By defining a value proposition that will differentiate
and position the brand in the marketplace
– Is set of benefits or values a company promises to
deliver to consumers in order to satisfy their needs
Netflix – DVDs by mail
• Netflix began in early 2000
• DVDs are delivered to your home with return
mail envelope
• Monthly charge with unlimited rentals – limited
amount out at one time
Marketing
Marketing Management
Management
Orientations
Orientations
Consumers favor products that are •
Production
Production Concept
Concept available and highly affordable
Improve production and distribution•
Consumers favor products that offer•

Product
Product Concept
Concept the most quality, performance, and
innovative features
Consumers will buy products only if•

Selling
Selling Concept
Concept the company promotes/ sells these
product
Focuses on needs/ wants of target•

Marketing
Marketing Concept
Concept markets & delivering satisfaction
better than competitors
Focuses on needs/ wants of target•

Societal
SocietalMarketing
MarketingConcept
Concept markets & delivering superior value
Society’s well-being•
Orientations
• Figure 1.3: The selling and marketing concepts
contrasted
Orientations
• Figure 1.4: The Societal
Marketing Concept
– The marketing strategy
should deliver value to
customers and other
stakeholders affected by
marketing decisions in a
way that maintains or
improves the consumer’s
and the society’s well-being.
Preparing a Marketing Plan
and Program
• Build customer relationships by
transforming the marketing strategy into
action
• Includes the marketing mix and the 4Ps of
marketing
– Product
– Price
– Place
– Promotion
Building Customer
Relationships
• CRM – Customer relationship
management . . .
“is the overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction. It deals
with all aspects of acquiring, keeping and
growing customers.”
Relationship Building Blocks:
Value and Satisfaction
• Customer Perceived Value
– The customers’ evaluation of the difference
between benefits and costs.
– Customers often do not judge values and
costs accurately or objectively.
• Customer Satisfaction
– Product’s perceived performance relative to
customers’ expectations.
This ad attempts
to change the
perceived value
of Cheerios
Cereal Bar by
helping
consumers
evaluate its
nutritional value
Customer Relationship
Levels and Tools
• Basic relationships
– low margin customers
• Full partnerships
– key customers
• Frequency marketing programs
– Reward customers who buy frequently or in large
amounts
• Club marketing programs
– Offer members special discounts and create member
communities
The Changing Nature of Customer
Relationships
• Relating with more Carefully Selected
Customers
• Relating for the Long-Term
• Relating Directly
Partnership Relationship
Management
• Working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers
• Partners Inside the Company
• Partners Outside the Firm
– Strategic partners
– Supply chain management
Capturing Value from Customers
• Creating Customer Loyalty and Retention
– Customer delight leads to emotional
relationships and loyalty
– Customer lifetime value shows true worth of
a customer
• Growing Share of Customer
– Share of customer’s purchase in a product
category
– Achieved through offering greater variety,
cross-sell and up-sell strategies
Capturing Value from Customers
• Building Customer Equity
– The combined customer lifetime values of all
current and potential customers
– Measures a firm’s performance, but in a
manner that looks to the future
– Choosing the “best” customers is key
New
New Marketing
Marketing Challenges
Challenges
New
Marketing
& Landscape
Information Nonprofit
Technology Marketing
Emerging
Emerging
Ethical
Concerns
Challenges
Challenges Globalization
Changing
World
Economy
What Is Marketing?
• The process of building profitable
customer relationships by creating value
for customers and capturing value in
return

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Tunis Business School

Marketing: Managing Profitable Customer

Consumers favor products that offer•

Consumers will buy products only if•

Focuses on needs/ wants of target•

Focuses on needs/ wants of target•

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