Marketing: Engaging customers and managing profitable customer relationships 2 Fundamental Goals Attract new customers (acquisition) by promising superior value/value proposition Keep and grow current customers (retention) by delivering satisfaction Customer Engagement “The ongoing interactions between company and customer, offered by the company, chosen by the customer” Acknowledges 2-way nature of engagement Accommodates broad interpretation of “interactions” Core Concepts Needs, wants, and demands Market offerings: How needs and wants are fulfilled Value and Satisfaction Exchanges and relationships Markets Value Proposition Foundational support for a customer-value driven marketing strategy What it is: Organization deciding how it will differentiate and position itself in the marketplace Keys: Clear, compelling, and unique Marketing Management Orientations Production Concept: Consumers will favor products that are available and highly affordable Product Concept: Consumers will favor products that offer the most quality, performance, and features Selling concept: Consumers will not buy enough of the firm's products unless the firm undertakes a large-scale selling and promotion effort Marketing Concept: Requires organization to know target’s needs and wants and better deliver to these than competitors Societal Marketing Concept: Marketing should consider consumers wants, company requirements, consumers interests, and society’s long-run interests Integrated Marketing Program Major marketing mix tools Four P’s of Marketing: Product, Price, Place, Promotion Marketing mix tools should be blended into a comprehensive integrated marketing program Customer Relationship Marketing Practices, strategies, and technologies that companies use to manage, record and evaluate customer interactions to drive sales growth by deepening and enriching relationships with customers Helps organizations systematically manage the processes involved in acquiring, retaining, and maintaining customers Enables delivery of personalized marketing using zero (shared explicitly by customer) or 1st party (collected implicitly by organization) data Customer Value and CRM Key Tenet: Not all customers are equally valuable Information is available that enables organizations to identify interested prospects and relatively more valuable customers as well as the needs, interests, perceptions, etc. of these individuals Customer Lifetime Value (CLV) is a prediction of the total net profit that will be attributed to an organizations ‘relationship’ with an individual customer CLV = m* L - AC m: contribution (or profit) margin → revenue - variable cost L: expected purchasing life → historical + predicted AC: acquisition cost → incentives + carrying