Value Proposition

Describe a value proposition and provide an example. How important is value to the consumer? (Points: 5)

A value proposition is a set of benefits offered by companies to address and satisfy customer's needs. For example, when you go to the store and they offer to give you a free item with the purchase of specific merchandise or a set dollar amount. Since "value reflects the sum of perceived tangible and intangible benefits to customer" (Kotler & Keller 2009, Pg. 14), this technique offers as profitable marketing strategy to retail stores. Value is important because it provides customer satisfaction. "Satisfaction reflects a person's judgment of a product's perceived performance in relationship to expectations" (Kotler & Keller 2009, Pg. 14). In the end value could be considered a measuring tool of the likelihood that the consumer will become a repeat customer providing ongoing business for the company.

How would you describe relationship marketing? Why are these relationships so important to successful marketing? (Points: 5)

Relationship marketing strives at "building enduring relationships with people and organizations in order to earn and retain their businesses" (Kotler & Keller 2009, Pg. 20). Relationship marketing delivers many benefits to the business as it allows you to reduce marketing expenses, build referrals, and grow the company's business aligned with the clients' needs. "The ultimate outcome of relationship marketing is a marketing network consisting of the company and its supporting stakeholders, customers, employees, suppliers, distributors, retailers, ad agencies, etc with who it can build mutually profitable business relationships" (Kotler & Keller 2009, Pg. 22). Basically, this marketing technique focuses on customer retention and the overall satisfaction of customers which is an essential component to the overall success of any business.