Marketing process -The Last phase

1. Defining Marketing and the Marketing Process -3
November, 2020

2. The Marketing Process (simple 5-phased model)
ted
A) B) C) D) E)
Understandthe
Marketplace &
Customer needs
andwants
Designa Customer-
driven Marketing
Strategy
Construct an
Integrated
Marketing program
that delivers superior
value
Buildprofitable
relationships and
createcustomer
satisfaction
Capturevaluefrom
customers in formof
sales,profit and
long-term
relationship
Understand customers, create value & build relationship Reap rewards of
created superior value

3. Marketing process (Last phase)
Capturevaluefrom
customers in formof
sales,profit and
long-term
relationship
E)
Sales (current & future)
Market share
Profits

4. Marketing process (Last phase)
Superior customer value leads to satisfied loyal customers that buy MORE!
Customer Loyalty and Retention
Share of Customers
Customer equity
OUTCOMES of creating customer value:
A)
B)
C)

5. Customer Loyalty and RetentionA)
Delighted customers are LOYAL!
Marketing process (Last phase)
Delight = company promises only what it can deliver and delivers more
than promised!
Retention programs can be:
FrequencyMarketingprograms = rewarding loyal customers who buy
frequently or in large quantities!
ClubMarketingprograms= companies offer financial or social benefits
to customers!

6. Customer Loyalty and RetentionA)
StewLeonard “math”:
Marketing process (Last phase)
It’s 5 times cheaper to keep an old customer than to
acquire a new one!
Losinga customer means losing the entire stream of
purchases that the customer would make over a lifetime
An average customer:
Buys products for $100/ a week
Shops 50 weeks / year
Remains in the area for 10 years
Loss of $50,000/customer

7. Customer Loyalty and RetentionA)
StewLeonard created
“Disneylandof Dairy Stores”:
Marketing process (Last phase)

8. Customer Loyalty and RetentionA) StewLeonard created“Disneyland of Dairy Stores”:
Marketing process (Last phase)

9. Customer Loyalty and RetentionA) StewLeonard created“Disneyland of Dairy Stores”:
Marketing process (Last phase)
Costumed characters
Scheduled entertainment
Petting ZOO
Animatronic music
29 stores serving 250.000
customers/week!

10. Growing Share of CustomersB)
Difference
Marketing process (Last phase)
Market Share
Focus on attracting a new customer!
Consumer Share
Focus on retaining a current customer!
“The portion of the customer’s purchasing that a
company gets in its product categories”
“share of wallet” (banks)
“share of stomach” (restaurant)
“share of garage” (car companies)
“share of travel” (airlines)

11. Growing Share of CustomersB) Amazon
Marketing process (Last phase)
HOW?
By offering varietyof products to customers!
office products
music
books
videos
apparel garden productsjewelry
home appliances toys

12. Building Customer EquityC)
Marketing process (Last phase)
The total combinedcustomer lifetimevalues of ALL the company’s current andpotential customers!
Companies want not only to create profitablerelationships with customers, but to “own” themfor life,
capture their lifetimevalue and earn a greatershareof their purchases!
More Loyal consumers – Higher Customer equity

13. Building Customer EquityC)
Marketing process (Last phase)
CADILLAC BMW
1970/1980-es - “Symbol of American Luxury”
51% market share of luxury cars
Now, customers are old = market share good, equity falling!
2020 – targeting young and rich customers!
High market share in a long run, high equity!
Important: customerlifetimevalue+ customer equity!

14. Building the Right Relationships with Right Customers!
Marketing process (Last phase)
Not all customers are a good investment! Classifying customers according their PROFIABILITY & LOYALTY!

15. Building the Right Relationships with Right Customers!
Marketing process (Last phase)
BUTTERFLIES TRUEFRIENDS
STRANGERS BARNACLES
PROFITABLE/ NOT LOYAL
Good fit between the company’s offerings and their needs.
Marketing strategy: invest, retain and grow them!Marketing strategy: Enjoy the moment!
PROFITABLE/ LOYAL
Strong fit between the company’s offerings and their needs.
NOT PROFITABLE/ NOT LOYAL
Little fit between the company’s offerings and their needs.
Marketing strategy: No investment in them!
NOT PROFITABLE/ LOYAL
Marketing strategy: Make them profitable!
Limited fit between the company’s offerings and their needs.

16. Homework
Explain & give examples for the 4 relationship groups:
Butterflies, Strangers, True friends and Barnacles!