hb 45 stmk handout slides

8/10/2019 HB 45 STMK Handout Slides

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www.henley.reading.ac.uk

Dr Baskin Yenicioglu

Dr Nikoletta Siamagka

-

STRATEGIC MARKETING

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Learning Outcomes of the Workshop

This workshop will:

Develop knowledge and understanding of marketing concepts.

Provide opportunities to analyse marketing problems.

Encourage decision making through practice and enable you to apply

marketing principles.

Provide an understanding of marketing planning.

Provide a practical opportunity to develop professional skills in

marketing: teamwork, analysis, research, presentations and decision

making.

Help you prepare for the assignment and the exam.


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Module Structure

What is Marketing?

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Marketing is

the management process responsible for

identifying, anticipating and satisfying customer

requirements profitably.Chartered Institute of Marketing

is the activity, set of institutions, and processes

for creating, communicating, delivering, andexchanging offerings that have value for customers,

clients, partners, and society at large.American Marketing Association

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As a Philosophy

Marketing..It encompasses the entire

business. It is the whole business seenfrom the point of view of its final result,

that is from the customers point of view.

(P.F.Drucker, 1954)


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Be Customer Centric

There is only one valid definition of

business purpose: to create a customer.

Peter. F. Drucker (1954)

the purpose of marketing: to create a

valuable customer experienceyour

customers will thank you for it, stay

loyal, and pay a premium.

B Schmitt (1999)

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Market Orientation

Intelligence Generation

Intelligence Dissemination

Organisation-wide Responsiveness

Competitor Orientation

Customer Orientation

Interfunctional Co-Ordination

Ajay Kohli & Benard Jaworski


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Market Driven vs. Market Driving?

Market Driven Market Driving

General

Customer Orientation

Identifying, analysing and

answering to the customer

Competitor Orientation

Organisations respond to activitywithin existing known market

parameters

Adaptation

Predicting which technologies

are likely to be successful given

customer needs and wants

Respond to market structure

Continuous benchmarking

Imitating others

Organisations act to create change inexisting market structures and the

behaviours of customers and

competitors

At the cutting edge of new customer

needs and wants

Shape customers behaviour

proactively

Pioneer

Predict the evolution of customerneeds and market boundaries

Shape market structures proactively

Identify difficult to imitate internal and

external competencies

Discontinuous disruption

Adapted from: Hollensen S. Marketing Planning A Global Perspective. Mcgraw Hill. 2005. Pg. 29.

External effects on consumer trends

Climate change and environmental concerns

World power re-balancing

Demographics and changes in family composition

Levels of education

Role of technology

Generational changes

Surveillance society

Culture of immediacy and gratification

To name but a few

(Source: The Future Foundation)


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A Typology of Market Evolution

Customer Market Power

Producer

Market Power

Low

High

Low High

(1) Benign

Co-

Existence

(2) Industrial

Revolution

(Mass

Production

Economy)

(3) Customer

Supremacy

(Service

Economy)

(4) Strong

Interaction

(Emerging

Information

Paradigm)

Modified from Beyond Market Orientation: A conceptualisation of Market Evolution, with Pierre Berthon and

Morris B. Holbrook, Journal of Interactive Marketing, Summer, 2000

StrategicMarketingPlanning


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The Marketing Management

Planning ProcessStrategic Business Planning

Marketing Management Process

Market

Research

Macro-

Environment

Customer

Needs

Competitive

& Market

Segmentation

& TargetingProduct

PositioningMarketing Mix

Decisions

Product

Price

Place

Promotion

3 Service Ps

Strategic Marketing Tactical Marketing

Marketing Metrics, Budgets, Evaluation & Accountability

Planning providesMarketing planning is: the planned application of marketing resources toachieve marketing objectives (McDonald, 2004).

It provides: An in-depth investigation of the market and identification of the

source of

competitive advantage

Clarity and agreement internally regarding the objectives, strategy andtactics for the product (we all know where we are going and what weare doing)

A statement of the resources required in order to achieve the statedobjectives

Commitment and support internally from all relevant departments

A public statement that can be used to brief and direct all thoseinvolved in the implementation process.


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Hierarchy of Strategies

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Corporate

Strategy

Sets out the organizations overall direction for growth/competitive advantage and themanagement of its various businesses and product lines within its portfolio

Describes the areas of business in which the company is to be involved and the financialand human resource to support this.

Goals and objectives in relation to revenue growth, profitability, ROI, earnings per share,contribution to stakeholders.

Business

Strategy

Developed at business unit or divisional level, sets out the products and markets theorganization is in within the business or industry.

Describes the means for achieving competitive advantage, how its SBUs should competeor co-operate within the industry

Goals and objectives in relation to sales growth, new product or market growth

,profitability, cash flow or basis for competitive advantage.

Functional

Strategy

Concerned with maximizing resource productivity within the context of the corporateand/or business strategy.

Functional strategies may be set for areas such as Marketing, Finance, R&D, HR.

Strategic Marketing Planning Process

16McDonald and Wilson, 2011


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ValueExploration

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Customer Value

The buyer chooses between different offerings on

the basis of which is perceived to deliver the most

value. Value reflects the perceived tangible and

intangible benefits and costs to the customer. Value

can be seen as primarily a combination of quality,

service and price

Kotler & Keller (2006, p25)


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Three Classes of Values

Psychological

Functional Economic

What do People Value?

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Customer value is..........

Perceived uniquely by individualcustomers

Conditional and/or contextual

Relative in comparison to alternative

offerings

Dynamic, changing with individual needs

over time.20

Characteristics of customer value


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The Value Proposition

A statement of the total set of benefits that the brand promises to

deliver

It makes clear the expected customer experience that will result

from interacting with the brand

Matching expectations with experience is achieved via the

organisations value delivery.

The brand must represent a promise about the total experience

customers can expect.

Kotler & Keller, 2006, p. 143

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Customer Insights

A fresh and not yet obvious understanding thatcan become the basis for competitor

advantage.

Source: defyingthelimits.com,

Mohanbir Sawhney, Kellogg School of Management


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Potential Customer Insights: where might theycome from? Cognition:

What do they know about our product/service? (product knowledge)

What attributes and benefits do they seek? (product attributions)

What information do they need for decision-making?

How do they learn about the product?

What is their perception of the market? (competitor brands)

Affect:

How do they feel about the product? (product attachment)

What is their perception and attitude towards the brand? (brand responses)

How do they feel about other customers? (users and non-users) Behaviour:

Who is involved in the decision-making process? Who do they refer to, who takes the decision?

What channels do they use and why?

Where do they look for information? (information seeking behaviour)

Where, when and how do they buy?

How do they use the product? How frequently do they re-purchase?

What benefit do they currently seek that it currently not being delivered by brands in the market?

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Primary Research MethodsMethods Characteristics Most often used for:

Qualitative

Face to face (depth) interviews

Focus Groups

Observation

Diary/Journal completion

Narratives

Ethnography/Netnography

Researcher involvement

Subjective

No standard probability

Detail insights into behaviours and

emotions

Provides rich data

Small samples

Usual answers the why? and how?

questions

Image analysis

Advertising pre-testing

Product testing

Concept testing

Customer behaviour

Usage & Attitude

Brand perception & Image

Quantitative

Surveys

Experiments

Measurement

Statistical probability large

Large random samples

Use of structured questionnaires

Objective

Used to test theory / hypotheses Researcher is detached

Usually answers the when? What?

How? Where? question

Tracking studies

Satisfaction surveys

Price testing

Marketing mix evaluation

Market audit data

Competitor data


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Positivism

Deductive

Experiment

Survey

Case

Study

Interview

study

Ethnography

Interpretivism

Inductive

Micro- analysis

Research

philosophy

Research

approaches

Research

strategies

Researchmethods

Data

collection

techniques

(Adapted from Saunders et al.,2003: 85)

Quantitative

Qualitative

Mixed methodsObservation

Interviews

Questionnaires

Secondary data

Sampling

strategies

Probability

Non-Probability

Dimensions of Research Design

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Value Creation:Customer Segmentation


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Market

Research

Macro-

Environment

Customer

Needs

Competitive

& Market

Segmentation

& TargetingProduct


Decisions

Product

Price

Place

Promotion

3 Service Ps



STP ~ linking

Strategy with Tactics

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Definition of a Segment

Groups of customers with similar needs

or wants and priorities

and who because of this .

seek same benefits and attach same

importance to their satisfaction.


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Segmentation, targeting, positioning

Identify variables

that allow the

market to be

segmented

Segmentation

Evaluate the

attractiveness of

each segment and

choose a targetsegment

Targeting

Identify positioning

concepts for each

target segment,

select the best,communicate.

Positioning

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DemographicsValues segmentation

Profitability modelling

Campaign Management

Lifestyle surveys

Approaches to segmentation aremany and varied


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Segmentation ~

its so simple. Divide the market into groups

Whose members are as similar as possible to each other

That are as different as possible from other groups

Segments meet these criteria

Measurable

Sustainable

Accessible

Differentiable

Actionable

~ so why is it so difficult?

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Segmentation in practice

Context dependent

prescriptive approaches can be misguided or inappropriate

Dynamic

environment is constantly changing

Demanding

demands time and attention

Implementation

relies on skills, capabilities and usually others to deliver results

Source: Palmer & Millier (2004)


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Visit SBI website to take the survey

Principles of market segmentation

Usage

Price sensitivity

Promotional response

Loyalty/ repeat purchase

Objective

Subjective

Benefits

Market Segments

Size?

Access?

Differentiated?

What is

bought

and why

Who

buys

customer /

consumer

characteristics

customer /

consumer

behaviour

Values

Attitudes

Lifestyle

Geography

Psychographics

Socio-economic &

demographic

PerceptionsPreference trade-offs

hard

soft

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Consumer Business

Geographic

Region

Climate

Region

Market

HQ, branch

Demographic

age, gender, income,

family size/stage

education

Industry (SIC code), Assets, Sales

# of employees

Psychographic

Social class

Lifestyle (VALS)

Media habits

Corporate culture

Power structure

Buyer-seller similarity

Behavioural

Benefits

Usage occasion

Usage rate

Brand loyalty

applications

urgency

size of order

existing relationships

Traditional segmentation variables
http://www.strategicbusinessinsights.com/vals/presurvey.shtmlhttp://www.strategicbusinessinsights.com/vals/presurvey.shtml


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Toy marketing is typically

segmented clearly along both age

and gender.

Lego introduced Lego Friendsin

2012 to give it greater access to

the market for girls toys.

Even though Lego was originally

designed as a gender neutral toybecause toy store layouts are often

gender specific segments they

needed products that could be

classified as for girls.

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Example: Gender stereotypes

Examples of the

new Lego Friends

website (below)and the existing

Lego offering.

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Example: Gender stereotypes


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Key Account Segmentation:Global Tech

Koala Bears

Teddy Bears

Polar Bears

Yogi Bears

Grizzly Bears

Andropov Big

Bears

Uses an extended warranty to give them cover. Wont do anything themselves, prefer to curl-up and waitfor someone to come and fix it.

Small offices (in small and big companies). 28% of market

Lots of account management and love required from a single preferred supplier. Will pay a premium fortraining and attention. If multi-site, will require supplier to effectively cover these sites. (Protect me).

Larger companies 17% of market

Like Teddy Bears except colder! Will shop around for cheapest service supplier, whoever that may be. Full3rd-party approach. Train me but dont expect to be paid. Will review annually (seriously). If multi-sitewill require supplier to effectively cover these sites.

Larger companies 29% of market

A wise Teddy or Polar bear working long hours. Will use trained staff to fix if possible. Needs skilledproduct specialist at end of phone, not a bookings clerk. Wants different service levels to match thecriticality of the product to their business process.

Large and small companies 11% of market

Trash them! Cheaper to replace than maintain. Besides, theyre so reliable that they are probably obsoletewhen they bust. Expensive items will be fixed on a pay-as-when basis - if worth it. Wont pay for training.

Not small companies 6% of market

My business is totally dependent on your products. I know more about your products than you do! Youwill do as you are told. You will be here now! I will pay for the extra cover but you will !

Not small or very large c ompanies. 9% of market

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A tool to understand customers

A cost effective promotional vehicle

A symbol of a commitment to customers


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Three dimensional data

Data depth

Data length

Data breadth

Customer

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Each customer has a unique DNA profilederived from the products they buy

Copyright,dunnhumby

you are what you eat!


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Key Concept: Benefit Segmentation

People buy a product to satisfy a particular need

The needs (or the relative importance of needs) differs across consumers.

People assign different weights to different benefits

Needs can be functional or symbolic

Attribute 1

Attribute 2

Segment 1

Segment 2

Examples of Benefits

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Sector specific knowledge

Wide range of country knowledgeFull range of advice

Relationships

Security of choice

Affordable

Accessible

Qualified

Trustworthy

Personable

Hygiene Factors

Motivators


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Differentiating Motivator Spectra

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High LowRelationship Needs

High LowBreadth of Advice Needs

25%

75%

30%

70%

Perceptual Map(From Cross Multiplying Motivators)

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High

Relationship

Needs

Low

Relationship

Needs

High Breadth of

Advice Needs

Low Breadth of

Advice Needs

52.50%22.50%

7.50% 17.50%

Grabbers

Skittish Lovers

Addicts


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Targeting:

Factors for Selecting Target Segments Structural attractiveness:

Size

Growth rate

Profitability

Nature of competition

Bargaining power of buyers

Company objectives and resources:

Strategic fit with long-term objectives

Core competencies and capabilities

Desired relationship with customer

Select a Target Segment

High

Medium

Low

High Medium Low

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Structural

Attractiveness

Company

objectives and

resources


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The Multiple Criteria Matrix

Go ?

Go

Go

?

?

Stop

StopStop

1000

High

700

Medium

400

Low

100 1000 700 400 100

High Medium Low

Company objectives

and resources

AC

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Targeting Strategies

1.

Undifferentiate

d Marketing

2. Differentiated

Marketing

3. Concentrated

Marketing

4. Customised

Marketing


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Enablers: Data capture, CRM, technology

Barriers: 1. resources, 2. companycharacteristics and 3. customer co-operation

one-to-one marketing will play an

important role in future marketing strategybut will continue to co-exist withsegmentation strategy

Source: Dibb (2001)

Towards segments of one?

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What is Positioning?

Positioning is the unique place for our product

relative to the competition in the mind of our

customer


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Positioning Statement Format

Convince:customer segment

That:our product or service

Because:differenti l benefit

Sample PositioningStatement

[Convince]To business managers and professionals

engaged in making time sensitive decisions aboutinternational business,

[Because]its pickup, transportation and deliverysystem is wholly-owned and managed by DHL

personnel, not by third party providers.

[That]DHL delivers on time


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Examples of Positioning Statements

Appleoffers . the best personal computing experienceto students, educators, creative professionals andconsumers around the world through its innovativehardware, software and Internet offerings.

IBM for businesses who need computing solutions, IBMis the company you can trust for all your needs.

The Chrysler PT Cruiser is an inexpensive, small car, thatis versatile, fun to drive, and will appeal to active singlesand young couples with children who otherwise wouldhave bought an SUV or a minivan.

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Value Creation:The Marketing Mix


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The Marketing ManagementPlanning Process

Strategic Business Planning


Market

Research

Macro-

Environment

Customer

Needs

Competitive

& Market

Segmentation

& TargetingProduct


Decisions

Product

Price

Place

Promotion

3 Service Ps



7Ps ~ tactical tools to

implement the strategy

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Marketing Mix: The 7 Pieces of thewhole

Product

Place

Price

Promotion

People

Process

Physical Evidence

Value

Creation


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Product: Customer perceived value

Packaged

Goods Motorcars Fast-food Airline

Transportation

Consulting

Babysitting

Tangible part of product

Intangible part of product

Tangible Intangible

Goods vs. Services Spectrum

Source: Shostack G.L., Breaking Free from Product Marketing, Journal of Mar keting, Vol. 41, No. 2, April 1977, American Marketing Association, p. 77.

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Product: Components of A Product

Hotel experience

Core Benefit

Basic Product

Expected Product

Augmented Product

Potential Product
http://www.capsuleinn.com/rooms_facilities.htmlhttp://www.hotelicon.com/houston-texas-hotels.phphttp://www.lemondehotel.co.uk/life/le-monde-card-edinburgh.htmlhttp://www.everland.ch/en/home/http://www.everland.ch/en/home/http://www.lemondehotel.co.uk/life/le-monde-card-edinburgh.htmlhttp://www.hotelicon.com/houston-texas-hotels.phphttp://www.capsuleinn.com/rooms_facilities.htmlhttp://www.amazon.co.uk/Girl-Dragon-Tattoo-Millennium-Trilogy/dp/B002RI9ZQ8/ref=pd_ts_zgc_kinc_341689031_1?ie=UTF8&s=digital-text&pf_rd_p=213022107&pf_rd_s=right-9&pf_rd_t=101&pf_rd_i=266239&pf_rd_m=A3P5ROKL5A1OLE&pf_rd_r=17E3TBHBHTYWFQDV8R37http://www.amazon.co.uk/Girl-Dragon-Tattoo-Millennium-Trilogy/dp/1847245455/ref=tmm_pap_title_0


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The Role of the Brand

59

60

A role in B2B as well


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Product Life Cycle and Marketing Mix

Product One More

versions

Full product

line

Best sellers

Price Skimming or

penetration

Gain market

share

Defend

market share

Stay

profitable

Promotion Inform,

educate

Stress

competitive

differences

Reminder

oriented

Minimal

promotion

Place Limited,

exclusive

More outlets Maximum

outlets

Fewer outlets

BCG Growth-Share Matrix

Low

MarketGrowth

Rate

Relative marketshare

Stars Problem children

Cash cows Dogs

High

10 0.11


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star problem children

cash cow dogs

High

Low

Mar

ketGrowthRate

Relative Market Share

10 0.11

BCG Growth Share Matrix: Product Sequence

Disaster sequence

Success sequence

Cash support

Hooley et al 2004

BCG Growth-Share Matrix - Strategic Objectives

Stars

build sales and/or market

shareinvest to maintain/increase

leadership position

repel competitive challenges

Problem children

Build selectively

focus on defendable nichewhere dominance can beachieved

harvest or divest the rest

Cash cows

hold sales and/or marketshare

defend position

use excess cash to supportstars, selected problem

children and new productdevelopment

Dogs

harvest or

divest or

focus on defendable niche

High

Low

MarketGrowthRate

Relative Market Share10 0.11

Positive Cash Flow Negative

Jobber 2004

Positive

CashFlow

Negative


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Price: Cost to Customer

What the customer

gives up -

Time Effort Money

What the customer

receives - A benefit

or cluster of benefits

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Price: Value to the Customer

The

Price

Continuum

Variable

cost per

unit

Too low

price

limit

Median

price

Market

leader

price

Too high

price

limit

Pricing

Strategies

Company

Will not

make money

Consumer

Will not

buy


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67

Pricing Strategies

Market Penetration

Skim The Cream

Product Line Promotion

Cost Plus Pricing

Target Pricing

Price Discrimination Going Rate Pricing

Quantum Pricing

Odd Number Pricing

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Value management

VALUE

DEVELOPMENT

VALUE

COMPONENTS

VALUE

PROPOSITIONSCUSTOMER

Increase Reduce

value costMatching

process

Customer/ Company/

market needs product

resourcescapabilities

Price realisation

Product

offering

Achieve

qualifiersPalmer, 2002

NPD

Portfolio Mgmt

Business Model

StrategyChannel &

Sales Strategy


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69

Place: Convenience for Customer

Marketing channels can be viewed as sets of

interdependent organisations involved in the process

of making a product or service available for use or

consumption.

- Stern and El-Ansary

70

Place: Distribution Channels

KEY CHANNEL DECISIONS

Vertical : how long is the channel; direct vs. multi-level

Horizontal : type of distribution; intensive, selective, or

exclusive

Locations: customer touch points; online vs. offline

LOGISTICAL DECISIONS

Inventory

Transportation


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Manufacturer or Service ProviderManufacturer or Service Provider

Customer of ConsumerCustomer or Consumer

Warehouse

Manufacturers

Warehouse

Distributor or

Retailer

Distributor or

Retailer

WholesalerWholesaler DirectDirect

Cost of raw materials

entering chain

Estimate processingand other costs

Identify cost/price

at which product leaves

this part of chain

Add raw material and processing costs,

Subtract from cost/price at which product

leaves that part of the chain

Is value created or destroyed?

Repeat for other chain elements

Identify value created and proportion of

value captured

Consider opportunities to improve

value capture

Identify Frictional costs

Can the chain be reconfigured

To be more efficient?

71

Place: Also the Retail Environment

72


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Promotion: Communication

Promotional Strategies

Pull = Inducing consumers to ask for a product by name

thus persuading retailers to stock and pulling supplies

down through the chain

Push = Encouraging the distribution chain to stock, thus

pushing product out into the distributor network

Profile = To influence/meet stakeholders needs.

F Content Medium C

C

C

C

C

Source: Hoffman and Novak (1996)

One-to-Many Communications


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Source: Hoffman and Novak (1996)

Many-to-Many Communications

FC Content Medium Content

Content

Content

F

C

F

F

C

F

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Promotion: It is all aboutCommunication

do not forget

interactive media is now seen as

MORE that just afacilitatorof

person-to-person communication

it is a also medium that allows

people to interact with content.
http://www.youtube.com/watch?v=DkOHsjZKBB0


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77

Communications Plan

Specification Of Target Segment(s)

Communications Objectives

Communications Mix

Budget Schedule

Monitoring and Evaluation

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The Communications Mix

Advertising:

TV, Cinema, Press, Radio, in-housemagazines, poster, online advertising.

Sales Promotion:

BOGOF

Discounts

Competitions

Loyalty rewards

Coupons

Goodie bags

Trade promotions

Sales force promotions

Sponsorship

Public Relations:

TV & Press releases

Crisis management

City/Finance publicity

Product placement

Direct:

Telephone, mail, email

Website

Mobile texting

Web-casting

Personal Selling:

Salesforce


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79

And for the Services Aspect

Add

People

Process Physical evidence

80

A comparison of B2B & B2C

Industrial Products Consumer Products

Customer base: Few, with concentrated buyingpower.

Numerous, widely dispersed andlimited buying power.

Buying behaviours: (DMU)

(DMP)

Group decisions.

Many buying influences.Many purchasing procedures.

Individual and family involvement.

Impulse, planned or experiential.

Buyer/supplier relationships: Very close relationships overtime.Pre-sale consultancy and problem-solving.

After-sales services / support.

Short duration with very little closecontact.

Product: Technical complexity.Standard or customised.

Standard.Detailed specifications.

Price: High unit price.Negotiating/bidding.Standard items from list.

Low unit price from list.

Promotion: Emphasis on personal selling. Mainly mass advertising andpromotion.

Distribution/Logistics: Mainly direct for make-to-ordercustomised items.Standard items often available fromstock through distributors.

Stock items through a network ofwholesalers and retail distributors.
http://www.youtube.com/watch?v=id0uHBuhXtYhttp://www.princegeorgehotel.com/contact_us/http://www.economist.com/whichmba/2010/free-ranking-toolhttp://www.economist.com/whichmba/2010/free-ranking-toolhttp://www.princegeorgehotel.com/contact_us/http://www.youtube.com/watch?v=id0uHBuhXtY


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81

Value Delivery

82

Why relationship?

Our customer

relationships are

better than the

competition ?

Our products are better

than the competition ?

Yes

No

Yes No

I

III IV

II


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83

Why relationship?

Our customer

relationships are

better than thecompetition ?

Our products/services are

better than the competition ?

Yes

No

Yes No

I

III IV

II

Fast, painless

death

Thrive!Slow, painful

death

Slow, painful

death

84

Relationship Marketing

As a merchant youdbetter have a friend inevery town.

An ancient Middle ProverbGronroos 1994


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85

Relationship Marketing

RM involves extending traditional marketing. Three major

considerations are relevant:

1. The nature of the relationship with customers is changing. The

emphasis has changed from a transaction to relationship focus

(long-term customer retention)

2. A recognition that quality, customer service and marketing

activities are closely related and need to be brought into closer

alignment

3. A broader view of markets is emerging.

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Focused Relationship Marketing elements

Customer

Service

Marketing

Quality

RELATIONSHIP

MARKETING


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Christopher, Payne and Ballantyne 2002

The six markets model

CUSTOMER

MARKETS

Internal

Markets

Supplier

Markets

Referral

Markets

Recruitment

Markets

Influence

Markets

Relationship spidergramIdentification of key groups in each market domain,and current vs. desired emphasis on each market

2

4

6

8

10

2

4

6

8

10

2468

10

CustomerMarkets

Supplier Markets

Recruitment Markets

Referral Markets

Influence Markets

Internal Markets

New

Existing

Source: Payne, A.F.T RelationshipMarketing : The Six Markets Model


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Relationship marketing spidergramfor British Airways

2

4

6

8

10

2

4

6

8

10

2 4 6 810

Internal

Markets

Recruitment

Markets

Influence

Markets

Supplier

Markets

Referral

Markets

New Existing

Customer

Markets

Mid 1970s

1980s2000s

Experience

Emotional

Access

Application of

Knowledge

Atmosphere

Caring

Attitude

Caring

Procedures, Processes

Communication

Sector

Differences

Individual

Outcomes

Peer-to-Peer

Relationship

Reliability

Safety

Social Impact

Supplier

Condition

Value for

Money

Value for

Time

Variety /

Choice

ProductServiceExperience

*

*

*

*

*Emphasis on attitude

The Customer Experience Model


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1. Extent of Personal Contact

2. Flexibility

3. Implicit Understanding of

Customer Needs

4. Pro-activity in Eliciting

Customers Objectives

5. Pro-activity in Checking that

Everything is OK

6. Promise Fulfilment

7. Knowledge

Important CE Factors in B2Band B2C

1. Helpfulness

2. Value for Time

3. Customer Recognition

4. Promise Fulfilment

5. Problem Solving

6. Personalisation

7. Competence

8. Accessibility

B2B B2C

1. Extent of Personal Contact

The extent to which the company deals with thecustomer through personal contact methods

2. Flexibility

How willing and able are the company to modify theiroffering in response to the customers specific needs orchanging requirements?

3. Implicit Understanding of Customer Needs

Does the company understand the context of the

customers order? Do they use their prior knowledge ofthe customer and their business to serve them better?

Important CE Factors in B2B


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Important CE Factors in B2C

1. Helpfulness

Are they really prepared to help me where nothing is

too much trouble for their staff?

2. Value for Time

Do they respect and make efficient use of my time by

shortening queues and delivering what they provide

efficiently?3. Customer Recognition

When I contact them do they recognise and

acknowledge me as an individual?

Terrorist

Dissatisfied

Customer

Client

Supporter

Advocate

Partner

Prospect Defector

Moira Clark

Clark and Baker 2004

The staircase of loyalty


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Retaining customers is extremely

profitable

Source: Bain Customer Retention Model, Bain & Company

Copyright Bain & Company

AcquisitionCost

Customer

Profit

Price Premium

Referrals

Reduced

operating costs

Increased purchases/

balance growth

Base Profit

0 1 2 3 4 5 6

Year

96

Evaluating andEnhancing theValue


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Market

Research

Macro-

Environment

Customer

Needs

Competitive

& Market

Segmentation

& TargetingProduct


Decisions

Product

Price

Place

Promotion

3 Service Ps


Marketing Metrics, Budgets, Evaluation & Accountability97

98

Metrics and Strategy

Metrics definition

Metrics application


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50

99

Three key questions

What

E.g.: Monitor sales

Why

Relativeperformance

Campaigneffectiveness

How

Market share

Sales upliftfollowing

promotionalcampaign

The Marketing Dashboard

100Source: Salesforce.com User and Developer Conference 2005


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CorporateGoals

MarketingGoals

MarketingObjectives

Marketingactivities

Planning hierarchy

Process:Identify most relevant metricsto monitor successDefine performance indicatorsfor each metricDefine data neededRevisit regularly

102

MarketingDilemmas


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Marketing Ethics

Behaviour that is consistent with theprinciples, norms, and standards of business practice thathave been agreed upon by society.

Trevino L. K. & Nelson K. A. Managing Business Ethics, 4thEd. 2007.

Acting Ethically

Moral awareness recognising an ethical dilemma is present;

Moral judgement deciding what is right or wrong in the case in

question

Ethical behaviour doing the right thing in the actions that follow.


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Differentiation vs. discrimination as a strategy:

Price differentiation:

Different groups pay different amounts for the same product.

Why? Asymmetric information, time, place, branding.

Under a differentiated pricing strategy different groups could pay

the same if they had access to all market information.

Price discrimination:

Different groups mustpay different amounts for the same product.

In certain sectors (e.g. financial services) increasingly hard to

maintain price differentiation strategies where consumers can easily

access a full range of market information over the internet.

105

Pricing Ethics

Examples of price discrimination in

practice:

Region encoding on DVDs.

Discounts for students / military personnel or other specific groups.

Dry cleaning (women's clothes cost typically cost more then men's

clothes).

Pharmaceuticals.

Car insurance.

Software

Is price discrimination unethical? Are there circumstances underwhich it can be ethical?

106

Pricing Ethics


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Assignment

Individual written report on a specific organisational problem or

opportunity in order to

Demonstrate your understanding and application of relevant

concepts and theories introduced in the module.

Reflect on how the ideas and concepts in the module have

informed your thinking as managers especially in the context of

other modules of the MBA

Word count is 5000 words (+20%, -10%) excluding the appendices

and references.

Assignment


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Focus on a current marketing

problem or opportunity

Propose a course of action to

deliver value

Describe the implementation

and expected impact

Assignment

Option A Elements in the report

Executive Summary

Part 1 - Identification of a

significant current

problem/opportunity (20% of

the marks)

Part 2 Proposed strategic

actions and rationale (30% ofthe marks)

Part 3 Implementation and

impact (40% of the marks)

Interdependencies and

reflection (10% of the marks)

Focus on a past marketing

problem or opportunity

Describe and critique the

course of action taken at the

time

Propose further action

Assignment

Option B Elements in the report

Executive Summary

Part 1 Analysis of a significant

past problem/opportunity (20%

of the marks)

Part 2 Critical analysis of the

past course of action (30% of the

marks)

Part 3 Future action (40% of

the marks)

Interdependencies andreflection (10% of the marks


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Keep a balance between theory and practice

Demonstrate broader reading of relevant theoretical

concepts and models

Be critical of both theories and their application

Be analytical justification, impact, interdependencies

Be specific use relevant examples

Integrate your elective pathway learning

Do not forget the reflective element

Assignment

hb 45 stmk handout slides

Documents