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



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



Strategy

2 customer orient&marketing management process

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