2 customer orient&marketing management process
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Customer Orientation
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Goals of Customer Orientation
Maximize ConsumptionMaximize Consumer satisfactionMaximize ChoiceMaximize Quality of Life
CUSTOMERS
Front-line people
Middle Mgt
Top Mgt
Modern Customer Oriented Organization
A principle which marketing holds is that a company
should view and organize its marketing activities from theconsumers point of view.
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Customer Expectations
Expectations are formed from past buying experience,friends and associates advice, and marketers andcompetitors information and promises.
Expectations and performance should match.
Company raising too high expectations will disappoint thebuyer.
Company if sets too low expectations, will not attractcustomers.
Successful companies try to match the expectations anddelivering performances.
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Customer Value
Customer Perceived Value
Is the difference between the prospective customersevaluation of all the benefits and all the costs of an offering
and the perceived alternatives.
Customers estimate which offer will deliver the most
perceived value, and act on it.
Whether or not the offer lives up to the expectation affects
the satisfaction and probability of purchasing the product.
Total Customer valueis the perceived monetary value of
the bundle of economic, functional, and psychological
benefits, customers expect from a given market offering.
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Value PropositionConsists of the whole cluster of benefits the company
promises to deliver; it is more than the core positioningof the offering.
Value Delivery SystemIt includes all the experiences the customer will have on
the way to obtaining and using the offering.
Total Customer Costis the bundle of costs customersexpect to incur in evaluating, obtaining, using, and
disposing of the given market offering , includingmonetary, time, energy, and psychic.
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Seller must access the Total customer value and Totalcustomer cost associated with competitors offerings to
understand how his offer rates in the buyers mind.
A seller who is at a customer perceived value disadvantagehas
Increase customer perceived value
Decrease total customer cost
Philosophy of High customer satisfaction subject todelivering acceptable levels of satisfaction to otherstakeholders and total resources.
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Customer Loyalty
Commitment to re-buy a preferred product or service in the
future despite situational influences and marketing efforts
having the potential to cause switching behaviour.
A highly satisfied customer becomes a loyal customer.
Buys more of companies new products , and upgraded
products.
Talks favorably about the company and pay less attention
to competing brands and less sensitive to price.
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Investment in Building LoyaltyCost should not exceed gains
Levels of investment in building loyalty1. Basic Marketing.2. Reactive Marketing3. Accountable Marketing4. Proactive Marketing5. Partnership Marketing
Markets with few customers and high profile margins,
most sellers will move towards partnership marketing.
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Link Between Customer Satisfaction and Loyalty notProportional
Customer satisfaction rated on 1 to 5 scale.1- low level satisfaction- abandon the company andeven badmouth.
2-4 fairly satisfied chances to switch to betteroffer if there
5 High satisfaction/delight- repurchase and even goodword about the company,creates an emotional bond
Highly satisfied for different reasons. Delivery, product performance, after sales service etc. One may be easily satisfied most of the time and the other
might be hard to satisfy but on this occasion satisfied.
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Satisfaction on product and qualityQuality is the totality of features and characteristics of aproduct or service that bear on its ability to satisfy stated or
implied needs.Delivered a quality product when customers expectations
are just met or exceeded.
Customer ProfitabilityRevenue generated from a customer over time - (Costincurred in attracting, selling and servicing the customer)
Customer Life time ValueDescribes the net present value of the stream of futureprofits expected over the customers lifetime purchase.
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Customer EquityIs the total of the discounted life time values of all the firms
customers. More loyal the customers ,higher the customerequity.
Value Equity-Sub driver are quality, price and convenience.
Brand Equity-Customer brand awareness, customerawareness, customer attitude towards the brand, andcustomer perception of brand ethics.
Relationship Equity
Loyalty programs, special recognitionand treatment programs, community building programs andknowledge building programs.
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Mass customizationIs the ability of a company to meet each customers
requirements-to prepare on amass basis individuallydesigned products ,services, programs, andcommunications.Eg: Nike shoes, Reflect.com P & Gs website.
Markets divided on the basis of customer defection1. Permanent Capture Market2. Simple Retention Market3. Customer Migration Market.
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Methods of Measuring Customer Satisfaction
Periodic surveys
Can track customer satisfaction directly.Additional questions to measure repurchase intention andthe willingness to recommend the company and brand toothers.
Monitoring customer loss rateContacting customers who have stopped buying or switchedto other suppliers.
Mystery Shoppers ExercisePose as a potential buyer and report on the strong andweak points experienced in buying the companys and
competitors product. You can pair up. Do it in TV
shops, Cloth shops etc. Be ready for discussion in theclass.
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Customer Satisfaction
Satisfaction depends upon the offers performance in
relation to the buyers expectation.
Satisfaction is a persons feelings of pleasure or
disappointment resulting from comparing a products
perceived performance ( or out come) in relation to hisexpectations.
Performance < Expectations = Dissatisfaction.Performance = Expectations = Satisfaction
Performance > Expectations = Highly Satisfied or Delighted
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Databases and Database Marketing
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Databases and Database Marketing
Customer database:Is an organized collection of information
about individual customers or prospects .Accumulated through customer transactions, registration
information, telephonic queries etc.
Contains customers past purchases, demographics,
psychographics, mediagraphics and other useful information.
Business Database:Contains business customers past
purchases, past volumes, prices and profits , buyer teams
member names ( ages, birthdays, hobbies etc.) current
contacts, competitive suppliers etc.
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Database Marketing:
Is the process of building, maintaining and using customer
databases and other databases (product, suppliers,
resellers) for the purpose of contacting, transacting and
building customer relationships.
Uses of databasesTo identify prospects
To decide which customer should receive a particular offer.
To deepen customer loyalty
To reactivate customer purchasesTo avoid serious customer mistakes.
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Marketing Management
Process
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Marketing Management Process
The process of analyzing marketing opportunities,
selecting target markets, developing themarketing mix, and managing the marketing
effort.
Strategic plan defines the companys overall
mission and objectives.
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TargetConsumers
Marketing Channel
Publics
Competitors
Suppliers
MarketingManagement Process
Factors InfluencingCompany Marketing
Strategy
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1.Target Consumers
Market Segmentation: The process of classifyingcustomers into groups with different needs, characteristics,or behaviour.
Consumers can be grouped based on geographic factors,psychographic factors (social classes, lifestyle), andbehavioural factors (purchase occasions, usage rates).
Market segment: A group of consumers who respond in a
similar way to a given set of marketing stimuli.
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Market Targeting:The process of evaluating each marketsegments attractiveness and selecting one or more
segments to enter.
A large company may offer a complete range of products toserve all market segments. Eg: General Motors.
Market Positioning:Arranging for a product to occupy aclear , distinctive, and desirable place relative to competingproducts in the minds of the target consumers.
A products position is the place the product occupies
relative to competitors in the consumers mind. Eg: Quality
is job one Ford, Engineered like no other car in the world
Mercedes Benz.
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2.Marketing Mix
After decided on the positioning strategy, companyhas to get ready for planning the Marketing Mix.Four Ps Product , Price, Place ,Promotion.
The set of controllable marketing variables that thefirm blends to produce the response it wants in thetarget market.
Mix consists of everything the firm can do toinfluence the demand for its product.
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The four Ps of the Marketing Mix
Target Market
Product Place
PromotionPrice
Target MarketA set of buyers sharing common needs or characteristics that the company
decides to serve.
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Product
QualityFeaturesOptionsStyleBrand NamePackagingSizesServicesWarranties
Returns
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PriceList PriceDiscountsAllowancesPayment PeriodCredit terms
PlaceChannelsCoverageLocationsInventoryTransport
PromotionAdvertising
Personal SellingSales PromotionPublicity
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3.Managing the Marketing Effort
The company want to design and put into action themarketing mix that will best achieve its objectives in its target
markets.
Involves four Marketing Management functions:Market Analysis, Market Planning, Market Implementation
and Market Control.
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3a. Marketing Analysis
Company must analyze its markets and marketing environment
to find out opportunities and to avoid environmental threats.Analyze company strengths and weaknesses.
Feeds information and inputs to the other marketing
management functions.
3b.Marketing Planning
Deciding on the marketing strategies that will help the company
to attain the strategic objectives.
Different and detailed marketing plan is needed for each
business, product, or brand.
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TargetConsumers
Marketing Channel
Publics
Competitors
Suppliers
MarketingManagement Process
Factors InfluencingCompany Marketing
Strategy
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Marketing PlanA marketing plan is a written document that summarizes
what the marketer has learned about the marketplace andindicates how the firm plans to reach its marketingobjectives.
Contents of a marketing planExecutive summary and table of contentsBrief summary of the main goals and recommendations.Outlines the entire plan and the operational detail.
Situation analysisRelevant background data on sales, costs, the market,competitors and other forces in the macro environment.
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How the market defined?, how big it is?, how fast it isgrowing? The trends?
All info is used to carry out a SWOT analysis.
Marketing Strategy
Is the logic by which the business unit hopes to achieve its
marketing objectives.The game plan for attaining the objectives.
The product manager defines the mission and marketing and
financial objectives.
Defines the targeted group and their needs.Specific strategies for target markets, marketing mix, and
marketing expenditure level.
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Financial Projections
Sales forecast, an expense forecast, and break-evenanalysis.Forecasted sales with volume by month and productcategory.
Implementation ControlsMonitoring and adjusting implementation of the plan.Goals and budget set for each month, corrective action.
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3c.Marketing Implementation
The process that turns marketing strategies and plans into
marketing action in order to accomplish strategic marketingobjectives.
Effectively put the marketing plan to work on day to day or
month to month activities.
Addresses when, who, where, and how.
3d Marketing Control
Measuring and evaluating the results of marketing strategies
and plans, making corrective actions.
Ensure that marketing objectives are attained.
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4.The Marketing Environment
Analyze the environment to avoid the threats and take
advantage of opportunities.
Includes forces that affects the companies ability to serve
its consumers like company departments , channel members
,suppliers competitors, and publics.Company should consider the entire marketing environment
when developing and positioning its offer to the target
market.
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TargetConsumers
Marketing Channel
Publics
Competitors
Suppliers
MarketingManagement Process
Factors InfluencingCompany Marketing
Strategy
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