marketing_part4
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Four Levels of Marketing
Strategic Marketing
Tactical Marketing
Administrative Marketing
Transformational Marketing
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Copyright: Raja Shuja-ul-Haq (2009)
Transformational Marketing deals with the process of keeping the marketing activities updated to the changing technology and consumer patterns and emerging environmental dynamics (i.e. changes in the macro, micro and task environments) …
In today’s era, it mainly covers Electronic Marketing …
Understanding Customer ValueCopyright: Raja Shuja-ul-Haq (2009)
Every company in the world is in the “value business”
Companies survive by creating some kind of value for their customers
Universal Fact
Copyright: Raja Shuja-ul-Haq (2009)
The Customer Value Equation
Copyright: Raja Shuja-ul-Haq (2009)
Customer Value = = Perceived Benefits –– Perceived Sacrifice
Customer Value Creation
Customer Value
Positive Negative
Perceived Benefits:
Product Benefits
Service Benefits
Relationship Benefits
Image Benefits
Perceived Sacrifice:
Monetary Costs
Time Costs
Energy Costs
Psychological Costs
Copyright: Raja Shuja-ul-Haq (2009)
Minus
The Customer Value Equation
Copyright: Raja Shuja-ul-Haq (2009)
Customer Value =
Functional Benefits + Image BenefitsPrice +Time +Energy +Psychic Costs
Functional benefits refer to either “superior performance” or “superior economy” whereas image benefits refer to the brand being used by the customer as a vehicle of “self-expression”
Customer Value Disciplines
Copyright: Raja Shuja-ul-Haq (2009)
Market-oriented companies attempt to create customer value in order to attract and retain customers. Their aim is to deliver superior value to their target customers.
Customer Value can be delivered by following one of the “value disciplines”:
Operational Excellence : providing reliable products and services at competitive prices, delivered by minimum difficulty
Customer Intimacy: tailoring the offerings to meet customers’ demand very precisely
Product Leadership: offering leading-edge products and services
Customer Value Disciplines
Copyright: Raja Shuja-ul-Haq (2009)
Market-oriented companies attempt to create customer value in order to attract and retain customers. Their aim is to deliver superior value to their target customers.
Customer Value can be delivered by following one of the “value disciplines”:
Operational Excellence : providing reliable products and services at competitive prices, delivered by minimum difficulty
Customer Intimacy: tailoring the offerings to meet customers’ demand very precisely
Product Leadership: offering leading-edge products and services
Successful companies specialize (are considered by the customers as the best) in one of the value disciplines and maintain an “above average” performance (as compared to competitors) in the other two …
New ways of delivering superior value to customers is marketing as a process, not marketing as a department or function
Copyright: Raja Shuja-ul-Haq (2009)
Companies are known by the type of value they offer to their customers …
A company needs to specialize in providing one of the three types of customer value dimensions …
Copyright: Raja Shuja-ul-Haq (2009)
Customer Value Dimensions
Psychological Value
Economic Value Functional Value
Copyright: Raja Shuja-ul-Haq (2009)
Dimension of Customer Value
Psychological Value
Economic Value Functional Value
Creating value for the customers by offering “relatively lower” prices as compared to the other competing brands in the market or offering “more quantity” for the same price or “much more quantity” for a slightly more price …
1
Copyright: Raja Shuja-ul-Haq (2009)
Dimension of Customer Value
Psychological Value
Economic Value Functional Value
Creating value for the customers by offering superior product performance or superior / sophisticated set of technical features in the product …
2
Copyright: Raja Shuja-ul-Haq (2009)
Dimension of Customer Value
Psychological Value
Economic Value Functional Value
This type of value is driven by intangibles such as customer service, brand image, trust, relationship and reputation …
3
Copyright: Raja Shuja-ul-Haq (2009)
Understanding Customer SatisfactionCopyright: Raja Shuja-ul-Haq (2009)
Not meeting customer expectations
Meeting customer expectations
Exceeding customer expectations
Customer Disappointment
Customer Satisfaction
Customer Delight
Customer satisfaction occurs when customer’s perceived performance of the product matches the customer’s expectations from the product
Copyright: Raja Shuja-ul-Haq (2009)
Not meeting customer expectations
Meeting customer expectations
Exceeding customer expectations
Customer Disappointment
Customer Satisfaction
Customer Delight
Customer expectations (about the product) are formed through post-buying experiences, word-of-mouth or supplier’s marketing activities
Copyright: Raja Shuja-ul-Haq (2009)
Not meeting customer expectations
Meeting customer expectations
Exceeding customer expectations
Customer Disappointment
Customer Satisfaction
Customer Delight
Repeated customer delight, over a number of purchase experiences, will eventually become a customer expectation
Copyright: Raja Shuja-ul-Haq (2009)
QDC Model of Customer SatisfactionQDC Model of Customer Satisfaction
Copyright: Raja Shuja-ul-Haq (2009)
(Functional Value)
(Economic Value)(Psychological Value)
Customer Delight and Satisfaction leads to Customer Loyalty
Copyright: Raja Shuja-ul-Haq (2009)
Advocate
Supporter
Client
Customer
Prospect Lead
Iron
Gold
Diamond
Platinum
One-off transactions
Long-term loyalty
Copyright: Raja Shuja-ul-Haq (2009)
Customer Loyalty LadderCustomer Loyalty Ladder
Understanding Marketing OpportunitiesCopyright: Raja Shuja-ul-Haq (2009)
What is a Marketing Opportunity?
Marketing opportunity is an area of buyer need and interest in which there is high profitability that a company can perform profitably by satisfying that need …
Therefore, a marketing opportunity exist when a marketer identifies a customer segment of sufficient size whose needs are going unsatisfied
Copyright: Raja Shuja-ul-Haq (2009)
Main Sources of Market Opportunities
Supplying something in short-supply (easiest level of marketing)
Supplying an existing product or service in a new or superior way (moderately tough level of marketing)
Supply a completely new product or service (toughest level of marketing)
Copyright: Raja Shuja-ul-Haq (2009)
Product
Market
Existing
Modified
New
Existing Modified New
Sell more of our existing products to our existing types of customers (Market Penetration)
Copyright: Raja Shuja-ul-Haq (2009)
Nine Ways to Find Market Opportunities
Enter and sell our products in other geographical areas (Geographical Expansion)
Sell our existing products to new types of customers (Segment Invasion)
Offer and sell modified products to new types of customers
Design new products to sell to new types of customers (Diversification)
Offer and sell modified products to new geographical markets
Design new products for prospects in new geographic areas
Modify our current products and sell more of them to our existing customers (Product Modification)
Design new products that will appeal to our existing customers (New Product Development)
Understanding Marketing ObjectivesCopyright: Raja Shuja-ul-Haq (2009)
VMV
What are Visions, Missions and Values?
What part does each of the above play in helping a company achieve its goals?
Copyright: Raja Shuja-ul-Haq (2009)
VMV Table
Copyright: Raja Shuja-ul-Haq (2009)
Issue Possible Descriptions
What are we here for?
Where are we going?
What belief will guide our behaviour?
• Purpose
• Mission
• Aim
• Vision
• Goal, Destination
• Strategic Intent
• Values, Credibility
• Ethics, Principles
• Guideline, Rules, Procedures
Some Winning Marketing Objectives
Marketing Objective No.1:
Win Through Higher Quality!!!
Companies with this objective strive to maintain high quality of their products
They can, however, face four problems:
1) Quality has a lot of meanings: If an automobile company claim good quality, what does it mean? Better starting performance? Faster acceleration? Better interior? or More durable exterior? Quality therefore needs to be further defined
Copyright: Raja Shuja-ul-Haq (2009)
Some Winning Marketing Objectives
Marketing Objective No.1:
Win Through Higher Quality!!!
Companies with this objective strive to maintain high quality of their products
They can, however, face four problems:
2) People can not tell the quality of a product by looking at it: First time customers, at best, have merely an image of quality without any evidence … How would you tell which “home water purification system” or “television receiver” is of good quality? (You would probably consider only the brands that you have heard of before) …
Copyright: Raja Shuja-ul-Haq (2009)
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