marketing_part4

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


The Customer Value Equation


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


Minus

The Customer Value Equation


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


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


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


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 …


Customer Value Dimensions

Psychological Value

Economic Value Functional Value


Dimension of Customer Value

Psychological 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



Psychological Value


Creating value for the customers by offering superior product performance or superior / sophisticated set of technical features in the product …

2



Psychological Value


This type of value is driven by intangibles such as customer service, brand image, trust, relationship and reputation …

3


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







Customer Delight

Customer expectations (about the product) are formed through post-buying experiences, word-of-mouth or supplier’s marketing activities







Customer Delight

Repeated customer delight, over a number of purchase experiences, will eventually become a customer expectation


QDC Model of Customer SatisfactionQDC Model of Customer Satisfaction


(Functional Value)

(Economic Value)(Psychological Value)

Customer Delight and Satisfaction leads to Customer Loyalty


Advocate

Supporter

Client

Customer

Prospect Lead

Iron

Gold

Diamond

Platinum

One-off transactions

Long-term loyalty


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


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)


Product

Market

Existing

Modified

New

Existing Modified New

Sell more of our existing products to our existing types of customers (Market Penetration)


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?


VMV Table


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


http://upload.wikimedia.org/wikipedia/commons/8/8f/P1010380.JPG

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) …


http://upload.wikimedia.org/wikipedia/commons/8/8f/P1010380.JPG

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