A Brief Introduction to Marketing and Customer Relationship Building

1. A Brief Introduction to Marketing and Customer Relationship Building Jeremy Kees, Ph.D.

2. Who is Jeremy Kees??

3. CONSUMER

4. American Marketing Association’s new official definition of marketing released August 2007: • Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

5. Kotler & Keller’s definition of marketing management: • The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

6. Value, Value, Value • Successful products and services deliver value and satisfaction to customers • We make buying decisions based on which product is perceived to offer the most value • Tangible/Intangible benefits vs. cost

7. How do we create customers? • Identifying customer needs • Designing goods and services that meet those needs • Communicate Information about those goods and services to prospective buyers • Making the goods or services available at times and places that meet customers’ needs • Pricing goods and services to reflect costs, competition, and customers’ ability to buy • Providing for the necessary service and follow-up

8. How do we create VALUE? • Identify the needs in the marketplace • Find out which needs the organization can profitably serve • Design goods and services that meet those needs • Developing a marketing mix that will convert potential customers into actual customers • Providing for the necessary service and follow-up after the service

9. “4 Eras” of Marketing

10. From transaction-based marketing to relationship marketing… • Transaction–based marketing (Simple exchanges) • Relationship marketing • Lifetime value of a customer • Converting new customers to advocates

11. From transaction-based marketing to relationship marketing…

12. Transaction vs. Relationship Marketing

13. Three Levels of Relationship Marketing

14. Let’s take a step back… • Although it is very important to try to build relationships with customers to ensure LT success • But, it is just as important to determine which consumers we want this relationship with!! • Target Market • “Costly” Consumers • Sprint Video

16. Customer Relationship Management (CRM) The combination of strategies and tools that drive relationship programs, re-orientating the entire organization to a concentrated focus on satisfying customers

17. Strategies for Building Customer Relationships • Affinity Programs • a marketing effort sponsored by an organization that solicits responses from individuals who share common interests and activities • BOA

18. Strategies for Building Customer Relationships • Frequency Marketing • frequent-buyer or user marketing programs that reward customers with cash, rebates, merchandise, or other premiums • Examples?? • Thankyou Rewards Spot • But not just for hotels and airlines…

19. Strategies for Building Customer Relationships • Database Marketing • software that analyzes marketing information, then identifies and targets messages toward specific groups of potential customers • http://www.wyndham.com

20. Strategies for Building B2B Relationships • Strategic alliance • a partnership formed to create a competitive advantage • These more formal long-term partnership arrangements improved each partner supply-chain relationships and enhance flexibility • Wal-Mart!

21. Strategies for Building B2B Relationships • Electronic Data Interchange (EDI) • involves computer-to-computer exchanges of invoices, orders, and other business documents • Vendor Managed Inventory (VMI) • is an inventory-management system in which the seller–based on existing agreement with a buyer– determines how much of a product is needed

22. Strategies for Building B2B Relationships • Database Marketing • software that analyzes marketing information, then identifies and targets messages toward specific groups of potential customers

23. Evaluating Relationships • Lifetime Value (LTV) • Refers to the net present value of the potential revenue stream for any particular customer over a # of years • Starts with current purchase activity then extrapolates to include potential additions from cross-selling, upgrades, total ownership, etc.

24. Marketing Concept • Based on Consumer Orientation • 100% focus toward the consumer • Consumer drives company-wide decisions • Focused on LONG TERM success

25. Building Buyer-Seller Relationships • Many customers are seeking ways to simplify their lives, and relationships provide a way to do this • Customers find comfort with brands that have become familiar through their ongoing relationships with companies or when they feel like they can relate to a company • Dove’s Campaign for REAL Beauty • Evolution • Such relationships often lead to more efficient decision-making my customers and higher levels of customer satisfaction

26. The Value of Customer Retention • On average, it costs over 10 TIMES more to acquire a new customer versus retain an existing one • A 5% gain in customer retention can result in an 80% gain in profits.