Partner relationship management means working closely with partners in other company departments and outside the company to jointly bring greater value to customers. These partners can be inside the company, but also outside the firm. The supply chain is a channel, from raw material to final product, and the companies involved can be partners through supply chain management. The final step of the model involves capturing value. Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.
Companies must aim high in building customer relations, to make sure that customers are coming back. When building relationships, it is important to build the right relationships with the right customers. Customers can be high- or low-profitable and short-term or long-term oriented. When putting these on two axes, a matrix of four terms appears. The economic crisis resulted in an uncertain economic environment, where consumers are more careful when spending their money.
The technology boom of the digital age leads to an increase in connectedness and information. It provides marketers with new ways to track customers and create products based on their needs. It brought a new way of communicating and advertising. The most dramatic change in technology is the Internet , a vast public web of computer networks that connects users of all types all around the world to each other and an amazingly large information repository. Web 1. Because of globalisation, companies are now globally connected with their customers. Current times also involve more sustainable marketing practices, involving corporate ethics and social responsibility.
It is the base for the long term planning of the firm.
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The mission leads to a hierarchy of goals. Based on this, the management must plan the business portfolio : the collection of businesses and products that make up the company. Portfolio analysis is the process by which management evaluates the products and businesses that make up the company. The first step is identifying the strategic business units SBU that are vital to the company. After the units are classified, the company should determine in which units to build share, hold share, harvest the profits or divest the SBU.
Designing the business portfolio also means looking at future businesses. Marketing provides a philosophy, input and strategies for the strategic business units. When trying to create customer value, a firm must go beyond the internal value chain and partner up with others in the value delivery network.
The value delivery network is the network composed of the company, its suppliers, its distributors and ultimately its customers who partner with each other to improve the performance of the entire system. Marketing strategy is the marketing logic by which the company hopes to create customer value and achieve profitable customer relationships. The company must choose which customers to serve and how to serve them. This process involves four steps:. Market segmentation : dividing a market into distinct groups of buyers who have different, needs, characteristics or behaviour and who might require separate products or marketing programmes.
A market segment is a group of consumers who respond in a similar way to a given set of marketing efforts. Positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of consumers. Differentiation is actually differentiating the market offering to create superior -customer value. The marketing mix is the set of tactical marketing tools: product, price, place and promotion, that the firm blends to produce the response it wants in the target market.
Product refers to the combination of goods and service the firm offers. Price is the amount the customer pays to obtain the product. Place refers to the availability of the product. Promotion relates to the activities that communicate the benefits of the product. Managing the marketing process requires four marketing management functions. The first is marketing analysis , starting with a SWOT analysis.
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Secondly, marketing planning involves choosing the right marketing strategies. Third is marketing implementation : turning marketing strategies and plans into marketing actions to accomplish strategic marketing objectives.
And finally, there is marketing control : measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved. Operating control refers to checking the performance against the annual plan, while strategic control involves looking at the match between strategies and opportunities. Nowadays, marketers need to back up their spending by measurable results.
The return on marketing investment marketing ROI is the net return from a marketing investment divided by the costs of the marketing investment. The marketing ROI measures the profits generated by investments in marketing activities and can be a helpful tool, but is also difficult to measure.
It consists both of the micro and macro environment. The microenvironment consists of the actors close to the company that affect its ability to serve its customers, such as: the company itself and its subdivisions and suppliers that provide the resources the firm needs to produce its products. But also of marketing intermediaries , which are firms that help the company to promote, sell and distribute its goods to final buyers. Resellers are distribution channel firms. Physical distribution firms help the company stock goods, while marketing service agencies are marketing research firms.
Financial intermediaries include banks and credit companies. These can be financial publics, media publics, government publics, local publics, general public and internal publics. Finally, customers are the most important actors. Consumers markets consist of individuals that buy goods for personal consumption. Business markets buy goods for usage in production processes, while reseller markets buy to resell at a profit.
Government markets consist of buyers who use the product for public service, and international markets consist of all these types of markets across the border. The macroenvironment consists of the larger societal forces that affect the microenvironment and consists of multiple factors.
Demography: the study of human populations in terms of size, density, location, age, gender, face, occupational and other statistics. Changes in demographics result in changes in markets. In the developed world, there are often generational differences to be found. Baby boomers are the 78 million people born during the years following the Second World War and lasting until Generation Y or the Millennials are the 83 million children of the baby boomers born between and They are characterized by a high comfort in technology. Changes can also be found in the family structure.
The traditional western household husband, wife and children is no longer typical. People marry later and divorce more. There is an increased number of working women and youngsters tend to stay at home longer. The workforce is also aging, because people need to work beyond the previous retirement age. There are also geographic shifts, such as migration. These movements in population lead to opportunities for marketing niche products and services. There are also migration movements within countries, namely from the rural to urban areas, also called urbanisation.
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The economic environment consists of economic factors that affect consumer purchasing power and spending patterns. Countries vary in characteristics, some can be considered industrial economies, while others can be subsistence economies, consuming most of their own output. In between are developing economies that offer marketing opportunities. There are also changes in customer spending patterns, such as the recent recessions, which can lead to lifestyle changes.
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Marketers should also pay attention to income distribution and income levels. The natural environment involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. Changes in this environment involve an increase in shortage of raw materials, increased pollution and increased governmental intervention. Environmental sustainability involves developing strategies and practices that create a world economy that the planet can support indefinitely.
The technological environment consists of forces that create new technologies, creating new product and market opportunities. It can provide great opportunities, but also comes with certain dangers. The political environment consists of laws, government agencies and pressure groups that influence and limit various organisation and individuals in a given society.
Current trends in our world today are increasing legislation affecting businesses globally and thus an increase in governmental influence over businesses. There is also an increase in emphasis on ethics and operating socially responsible.