In other articles, we have tried to change people’s thoughts on Marketing what they think of when they hear the word, and tried to make it clear by giving our definition of “Marketing”. And we defined Marketing as the process by which companies engage customers, build strong relationships and create customer value in order to get value from customers in return.
In today’s article, let’s talk about and examine that five-step model of the marketing process for creating and capturing customer value.
Step 1: Understanding customer needs and wants and the marketplace.
The marketing process is crucial to the business performance of the company, both large and small because it describes the most crucial concepts of the market. As a starting point, marketers need to understand what customer needs and wants are and the marketplace that they are in.
In marketing, Needs are considered as an individual’s basic requirement that is extremely necessary for survival. They consist of physical ( food), social ( Affection), and individual (knowledge)needs which are limited. Marketers do not create these needs, they are a basic part of the human makeup.
Wants are defined as something unnecessary but a strong desire to possess and improve the quality of living.
Customer-focused companies carry out consumer research, collect customer data and keep customers’ habits under observation in order to learn about customer needs and wants.
Identifying and anticipating customer needs and wants are basic concepts to deliver superior value. And these needs and wants are fulfilled by market offerings which include company products, services, or information.
Step 2: Design a customer value-driven marketing strategy
After understanding their customers and the marketplace, marketing management can start creating a customer value-driven marketing strategy.
Marketing management is the art and science of choosing target markets and having profitable relationships with them.
The main purpose of the marketing managers is to attract, keep and increase target customers by building, delivering, and communicating customer value. To build a winning marketing strategy, the marketing managers must make clear what is their target market and how can they serve it best.
First, they should know and decide whom it will serve. They can perform it by dividing the market into segments of customers and choosing their segments. Then they can think of the ways of serving their target customers which make the company find out how to differentiate and position itself in the marketplace.
Having strong value propositions can give a great advantage in the market and differentiate themselves from other brands.
Marketing managers can use one of these five concepts to engage and build profitable relationships with customers. These are the production concept, the product concept, the selling concept, the marketing concept, and the societal marketing concepts.
These marketing philosophy concepts are described in this article.
Step 3: Preparing an Integrated marketing plan and program
The company’s marketing strategy outlines which customers it will serve and how it will create value for these customers. Next, the marketer develops an integrated marketing program that will actually deliver the intended value to target customers.
The marketing program builds customer relationships by transforming the marketing strategy into action. It consists of the firm’s marketing mix and the set of marketing tools the firm uses to implement its marketing strategy.
The major marketing mix tools are classified into four broad groups, called the four Ps of marketing: product, price, place, and promotion.
To deliver on its value proposition, the firm must first create a need-satisfying market offering (product). It must then decide how much it will charge for the offering (price) and how it will make the offering available to target consumers (place).
Finally, it must engage target consumers, communicate about the offering, and persuade consumers of the offer’s merits (promotion).
The firm must blend each marketing mix tool into a comprehensive integrated marketing program that communicates and delivers the intended value to chosen customers.
Step 4: Engaging customers and managing customer relationships
This is the fourth and the most important step which is to attract customers and keep them interested and do profitable customer relationships.
Providing the best customer value and satisfaction is the key factor to having long-lasting relationships. The customers get satisfied are more likely to stay loyal to their brands and this, in turn, gives these companies a larger share of their business.
As we know, customers usually face many and various products and services and are confused about choosing from the choice. These products with the highest customer-perceived value are purchased mostly.
Customer-perceived value is the process and the result that customers evaluated a company’s market offerings by comparing their benefits and prices to ones offered by competitive companies.
Usually, customers’ evaluation of values and costs is not accurate and it is based on perceived value. That is to say, some customers might see value in affordable products.
For others, paying more to get more might be valuable. Luxury products can be an example, these products cost a lot but customers get values from a different side.
Step 5: Capturing value from customer
After four steps in the marketing process, the final step is getting value from customers in different forms such as sales, market share and profits.
Delivering superior customer value can bring long-run returns for the company in the future because it improves customer satisfaction and in turn this make customers stay loyal and buy more.
To capture greater value from customers, the firm need to try to create good customer relationship management. Their aim must be to create customer satisfaction along with customer delight.
