What Is The Process By Which Goods And Services Are Brought Into Existence?

Creating Products and Pricing Strategies to Meet Customers' Needs

91 The Marketing Concept

What is the marketing concept and relationship-building?

Marketing is the procedure of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques and utilizing the advisable people to provide the customer service associated with those goods, services, or ideas. This concept is referred to as the "right" principle and is the basis of all marketing strategy. We tin say that marketing is finding out the needs and wants of potential buyers (whether organizations or consumers) and then providing goods and services that meet or exceed the expectations of those buyers. Marketing is almost creating exchanges. An exchange takes place when 2 parties give something of value to each other to satisfy their respective needs or wants. In a typical exchange, a consumer trades money for a practiced or service. In some exchanges, nonmonetary things are exchanged, such as when a person who volunteers for the visitor charity receives a T-shirt in exchange for fourth dimension spent. One common misconception is that some people see no deviation between marketing and sales. They are two different things that are both part of a visitor's strategy. Sales incorporates actually selling the company's products or service to its customers, while marketing is the procedure of communicating the value of a production or service to customers and then that the product or service sells.

To encourage exchanges, marketers follow the "right" principle. If a local Avon representative doesn't have the right lipstick for a potential customer when the customer wants it, at the right toll, the potential customer will not exchange money for a new lipstick from Avon. Retrieve about the terminal exchange (purchase) yous made: What if the toll had been 30 per centum higher? What if the store or other source had been less accessible? Would you take bought annihilation? The "right" principle tells u.s.a. that marketers control many factors that determine marketing success.

About successful organizations have adopted the marketing concept. The marketing concept is based on the "right" principle. The marketing concept is the use of marketing data to focus on the needs and wants of customers in order to develop marketing strategies that not only satisfy the needs of the customers merely also the accomplish the goals of the organization. An organization uses the marketing concept when it identifies the buyer'southward needs and then produces the goods, services, or ideas that will satisfy them (using the "right" principle). The marketing concept is oriented toward pleasing customers (be those customers organizations or consumers) by offer value. Specifically, the marketing concept involves the post-obit:

Focusing on the needs and wants of the customers and so the system can distinguish its product(s) from competitors' offerings. Products tin be appurtenances, services, or ideas.
Integrating all of the organization's activities, including production and promotion, to satisfy these wants and needs
Achieving long-term goals for the system by satisfying client wants and needs legally and responsibly

Today, companies of every size in all industries are applying the marketing concept. Enterprise Rent-A-Machine found that its customers didn't want to have to drive to its offices. Therefore, Enterprise began delivering vehicles to customers' homes or places of work. Disney found that some of its patrons really disliked waiting in lines. In response, Disney began offer FastPass at a premium cost, which allows patrons to avoid standing in long lines waiting for attractions. 1 important central to understanding the marketing concept is to know that using the marketing concept means the product is created subsequently market research is used to identify the needs and wants of the customers. Products are not merely created by production departments and then marketing departments are expected to identify ways to sell them based on the research. An organisation that truly utilizes the marketing concept uses the data about potential customers from the very inception of the product to create the best good, service, or idea possible, as well every bit other marketing strategies to support it.

Customer Value

Customer value is the ratio of benefits for the customer (organization or consumer) to the sacrifice necessary to obtain those benefits. The customer determines the value of both the benefits and the sacrifices. Creating client value is a core business organization strategy of many successful firms. Customer value is rooted in the belief that toll is not the only matter that matters. A business that focuses on the cost of product and price to the customer will be managed as though it were providing a commodity differentiated only past price. In contrast, businesses that provide customer value believe that many customers will pay a premium for superior customer service or accept fewer services for a value price. It is important not to base value on price (instead of service or quality) because customers who just value price will buy from the contest as before long as a competitor tin offer a lower price. It is much better to utilize marketing strategies based on customer relationships and service, which are harder for the competition to replicate. Southwest Airlines doesn't offer assigned seats, meals, or in-flying movies. Instead the budget carrier delivers what it promises: on-time departures. In "service value" surveys, Southwest routinely beats the full-service airlines such as American Airlines, which actually provide passengers with luxuries such as movies and food on selected long-haul flights.

Customer Satisfaction

Customer satisfaction is a theme stressed throughout this text. Customer satisfaction is the customer's feeling that a product has met or exceeded expectations. Expectations are oftentimes the result of communication, especially promotion. Utilizing marketing research to identify specific expectations and and so crafting marketing strategy to meet or exceed those expectations is a major contributor to success for an organization. Lexus consistently wins awards for its outstanding customer satisfaction. JD Powers surveys automobile owners two years after they make their buy. Its Customer Satisfaction Survey is made up of four measures that each describe an element of overall ownership satisfaction at two years: vehicle quality/ reliability, vehicle appeal, buying costs, and service satisfaction from a dealer. Lexus continues to lead the industry and has been America'due south top-ranked vehicle for five years in a row.

"Lexus Rises to the Top in Customer Satisfaction," Automotive News, http://www.autonews.com, August 25, 2015.

Geico—the major motorcar insurer with the scaly mascot—famously boasts a 97 pct client-satisfaction rating. Although the firm'south merits may exist exaggerated a bit, consumers get the bulletin that Geico delivers quality insurance coverage at low prices. In what way does the company's quirky and ubiquitous advertising—in which customers claim to take saved a bunch of coin on car insurance by switching to Geico—influence customers' service expectations? (Credit: Mike Mozart/ Flickr/ Attribution 2.0 Generic (CC Past ii.0))

A photograph shows a car whose paint appears like the skin of a gecko. Large lettering reads Geico, and there is a decal of the Geico gecko on the window.

Building Relationships

Relationship marketing is a strategy that focuses on forging long-term partnerships with customers. Companies build relationships with customers by offering value and providing customer satisfaction. Once relationships are built with customers, customers tend to go along to buy from the same company, even if the prices of the competitors are less or if the contest offers sales promotions or incentives. Customers (both organizations and consumers) tend to purchase products from suppliers whom they trust and feel a kinship with, regardless of offerings of unknown competitors. Companies benefit from repeat sales and referrals that lead to increases in sales, market share, and profits. Costs fall because it is less expensive to serve existing customers than to attract new ones. Focusing on client retention can be a winning tactic; studies show that increasing customer memory rates by 5 percent increases profits by anywhere from 25 to 95 percentage.

"What Is Customer Retention?" Customer Insight Grouping, https://www.customerinsightgroup.com, Apr twenty, 2017.

Customers too do good from stable relationships with suppliers. Business buyers have found that partnerships with their suppliers are essential to producing high-quality products while cutting costs. Customers remain loyal to firms that provide them greater value and satisfaction than they expect from competing firms.

Frequent-buyer clubs are an excellent fashion to build long-term relationships. All major airlines have frequent-flyer programs. After you fly a certain number of miles, you lot become eligible for a free ticket. At present, prowl lines, hotels, car rental agencies, credit-card companies, and even mortgage companies give away "airline miles" with purchases. Consumers patronize the airline and its partners because they want the free tickets. Thus, the plan helps to create a long-term relationship with (and ongoing benefits for) the customer. Southwest Airlines carries its loyalty program a flake further than nigh. Members go altogether cards, and some even get profiled in the airline's in-flight magazine!

Explain the marketing concept.
Explicate the difference between customer value and customer satisfaction.
What is meant by relationship marketing?

Summary of Learning Outcomes

What is the marketing concept and relationship-building?

Marketing includes those business activities that are designed to satisfy consumer needs and wants through the exchange process. Marketing managers employ the "right" principle—getting the right goods or services to the correct people at the right identify, time, and price, using the right promotional techniques. Today, many firms accept adopted the marketing concept. The marketing concept involves identifying consumer needs and wants and then producing products (which can be goods, services, or ideas) that will satisfy them while making a turn a profit. Relationship marketing entails forging long-term relationships with customers, which can lead to repeat sales, reduced costs, and stable relationships.

Glossary

customer satisfaction: The customer'south feeling that a product has met or exceeded expectations.

customer value: The ratio of benefits to the sacrifice necessary to obtain those benefits, as determined by the client; reflects the willingness of customers to really purchase a product.

commutation: The process in which two parties give something of value to each other to satisfy their respective needs.

marketing: The process of discovering the needs and wants of potential buyers and customers then providing goods and services that meet or exceed their expectations.

marketing concept: Identifying consumer needs and then producing the goods or services that will satisfy them while making a profit for the organization.

relationship marketing: A strategy that focuses on forging long-term partnerships with customers by offer value and providing client satisfaction.