Marketing Process – Design Customer Value Driven Marketing Strategy
Marketing Process Step: 2
After completing the first Marketing Process such as understanding consumer needs wants and the marketplace, the marketing process can step further to the second step i.e. customer-driven marketing strategy.
Marketing Management is the art and science of selecting target markets and establish a profitable relationship with a target audience. The marketing manager’s goal is to locate, attract, retain, and develop target customers by creating, delivering, and communicating superior customer value.
To construct a winning strategy, the marketing manager must have to answer two questions. i.e. What customer will we serve? (What is our target market?) and How can we serve these customers best (What is our value proposition?)
Selecting a Customers to Serve
The company must first decide whom it will serve. It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). Some people think of marketing management as finding as many customers as possible and increasing demand. But marketing managers know that they cannot serve all customers in every way. By trying to serve all customers, they may not serve any customers well. Instead, the company wants to select only customers that it can serve well and profitably. For example, Nordstrom profitably targets affluent professionals; Dollar generally profitably targets families with more modest means.
Ultimately, marketing managers must decide which customers they want to target and on the level, timing, and nature of their demand. Simply put, marketing management is customer management and demand management.
Choosing a Value Proposition
The company must also decide how it will serve its target customers. it’s also part of the marketing process. How it will differentiate and position itself in the marketplace. A brand’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. Facebook helps you “ connect and share with the people in your life” whereas YouTube “provides a place for people to connect, inform, inspire others across the globe.” BMW promises “the ultimate driving machine,” whereas the diminutive Smart car suggests that you “Open your mind to the char that challenges the status quo.” New Balance Minimus shoes are “like barefoot only better”.
Such value propositions differentiate one brand from another. They answer the customer’s question, “Why should I buy your brand rather than a competitor’” Companies must design strong value propositions that give them the greatest advantage in their target markets. For example, Vibram Five Finger shoes promise the best of two worlds – running with shoes and without. “You get all the health and performance benefits of barefoot running combined with a Vibram sole that protects you from elements and obstacles in your path. With Vibram Five Fingers shoes “The more it looks like a foot, the more it acts like a foot.”
Marketing Management Orientation
It is also the second step in the marketing process. Marketing management wants to design strategies that will build profitable relationships with target consumers. But what philosophy should guide these marketing strategies? What weight should be given to the interest of customers, the organization, and society? Very often, these interests conflict.
There are five alternative concepts under which organizations design and carry out their marketing strategies: production, product, selling, marketing.
- The production Concept
- Product Concept
- Selling Concept
- Marketing Concept
Societal Marketing Concept in Marketing Process
The societal Marketing Concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm that satisfies the immediate needs and wants of target markets always doing what’s best for its consumers in the long run? The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s well-being. It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Even more broadly, many leading business and marketing thinkers are now preaching the concept of shared value, which recognizes that societal needs, not just economic needs, define markets.
The concept of shared value focuses on creating economic value in a way that also creates value for society. A growing number of companies known for their hard-nosed approach to business such as GE, Google, IBM, Intel, Johnson & Johnson, Nestle, Unilever, and Walmart have already embarked on important efforts to create shared economic and societal value by rethinking the intersection between society and corporate performance. They are concerned not just with short-term economic gains, but with the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, and the economic well-being of communication in which they produce and sell.
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