an expanded model of the marketing process
TRANSCRIPT
An expanded An expanded model of the model of the marketing marketing
processprocess
Create value for customers Create value for customers and build customer and build customer
relationshipsrelationships1.1. Understand the marketplace Understand the marketplace
and customer needs and wantsand customer needs and wants
Research consumers and the Research consumers and the marketplacemarketplace
Manage marketing information Manage marketing information and customer data.and customer data.
2. Design a customer driven 2. Design a customer driven marketing strategymarketing strategy
Select customers to serve: Select customers to serve: market market segmentation and segmentation and targetingtargeting
Decide on a value proposition: Decide on a value proposition: differentiation and differentiation and positioningpositioning
3. Construct a marketing program 3. Construct a marketing program that delivers superior valuethat delivers superior value
ProductProduct and service design; build strong and service design; build strong brandsbrands
PricingPricing: create real value: create real value Place Place /Distribution: manage demand and /Distribution: manage demand and
supply chainssupply chains Promotion:Promotion: communicate the value communicate the value
propositionproposition ( marketing mix decisions)( marketing mix decisions)
4. Build profitable relationships 4. Build profitable relationships and create customer delightand create customer delight
Customer relationship management: Customer relationship management: build strong relationships with build strong relationships with chosen customerschosen customers
Partner relationship management: Partner relationship management: build strong relationships with build strong relationships with marketing partnersmarketing partners
CAPTURE VALUE FROM CAPTURE VALUE FROM CUSTOMERS IN RETURNCUSTOMERS IN RETURN
5.Capture value from 5.Capture value from customers to create profits customers to create profits and customer equityand customer equity
Create satisfied loyal customersCreate satisfied loyal customers Capture customer lifetime valueCapture customer lifetime value Increase share of market and Increase share of market and
share of customershare of customer
Factors to be Factors to be considered……considered……
Harness marketing Harness marketing technologytechnology
Manage global marketsManage global markets Ensure ethical and social Ensure ethical and social
responsibilityresponsibility
VALUEVALUE
Companies are facing toughest competition Companies are facing toughest competition everever
Winning customers by moving from product Winning customers by moving from product and sales philosophy to marketing philosophyand sales philosophy to marketing philosophy
Satisfying customer needsSatisfying customer needs Using the skill of market engineering Vs Using the skill of market engineering Vs
product engineeringproduct engineering
Even the best marketing departments in the Even the best marketing departments in the world cannot sell products that are poorly world cannot sell products that are poorly made or fail to meet the customers’ made or fail to meet the customers’ expectation and needexpectation and need
McDonalds : QSCVMcDonalds : QSCV
Quality/service/cleanliness/valueQuality/service/cleanliness/value
109 countries, >23,500 restaurants109 countries, >23,500 restaurants
> 40 million people visit/day> 40 million people visit/day
35 years ago, Peter Drucker observed that a 35 years ago, Peter Drucker observed that a company’s first task is to “ create customers”company’s first task is to “ create customers”
Customers are value maximisersCustomers are value maximisers
Whether or not the offer lives up to the value Whether or not the offer lives up to the value expectation affects both satisfaction and expectation affects both satisfaction and repurchase probabilityrepurchase probability
CUSTOMER DELIVERED VALUECUSTOMER DELIVERED VALUE
CDV is the difference between the CDV is the difference between the Total Customer Value and Total Total Customer Value and Total Customer CostCustomer Cost
CDV = TCV – TCCCDV = TCV – TCC
Total Customer ValueTotal Customer Value
It is the bundle of benefits customers expect It is the bundle of benefits customers expect from a given product or servicefrom a given product or service
Product valueProduct value Services valueServices value Personal valuePersonal value Image valueImage value
Total Customer CostTotal Customer Cost
It is the bundle of costs customers expect to It is the bundle of costs customers expect to incur in evaluating, obtaining, using and incur in evaluating, obtaining, using and disposing of the product or servicedisposing of the product or service
Monetary costsMonetary costs Time costsTime costs Energy costsEnergy costs Psychological costsPsychological costs
Customer SatisfactionCustomer Satisfaction
Satisfaction is a person’s feeling of Satisfaction is a person’s feeling of pleasure or disappointment resulting pleasure or disappointment resulting from comparing a product’s from comparing a product’s perceived performance or outcome in perceived performance or outcome in relation to his or her expectationrelation to his or her expectation
It is an after purchase feelingIt is an after purchase feeling CS = f( perceived performance, CS = f( perceived performance,
expectation)expectation)
Dissatisfied customer ( PP < EX)Dissatisfied customer ( PP < EX) Satisfied customer (PP= EX)Satisfied customer (PP= EX) Highly satisfied or delighted Highly satisfied or delighted
customer (PP>EX)customer (PP>EX)
PP = perceived performancePP = perceived performanceEX= expectationEX= expectation
Customer loyalty is directly proportional to Customer loyalty is directly proportional to the emotional attachment to the brandthe emotional attachment to the brand
How do buyers form their expectation?How do buyers form their expectation? Past buying experiencePast buying experience Friends/ word – of – mouthFriends/ word – of – mouth Marketers and competitors informationMarketers and competitors information Promises made by the companyPromises made by the company
Every company has to set an optimum Every company has to set an optimum standard of expectation ( neither too high or standard of expectation ( neither too high or too low)too low)
Total Customer Satisfaction takes place Total Customer Satisfaction takes place when expectations are raised and when expectations are raised and performances are delivered to match those performances are delivered to match those expectationsexpectations
Honda : one reason our customers are Honda : one reason our customers are so satisfied is that we aren’tso satisfied is that we aren’t
Nissan: “ Guest Drive”Nissan: “ Guest Drive”
Visionary companies develop a vision Visionary companies develop a vision for their future and act to implement itfor their future and act to implement it
Visionary companies have creative, Visionary companies have creative, innovative and imaginative ideas..innovative and imaginative ideas..
VALUE CHAINVALUE CHAIN
Designed by Michael Porter of Designed by Michael Porter of Harvard Business SchoolHarvard Business School
It identifies 9 relevant activities It identifies 9 relevant activities that create value in a specific that create value in a specific businessbusiness
5 primary activities5 primary activities 4 support activities4 support activities
VALUE CHAINVALUE CHAINFirm infrastructure Firm infrastructure HRM HRM SUPPORT SUPPORT Technology development Technology development ACTIVITIESACTIVITIESProcurementProcurement____________________________________________________________________Inbound logistics , operations, Inbound logistics , operations, outbound logisticsoutbound logisticsMarketing and Sales , Services Marketing and Sales , Services PRIMARY ACTIVITIESPRIMARY ACTIVITIES
MARGIN
Understanding and using the Value ChainUnderstanding and using the Value Chain
Identify and examine the costs and Identify and examine the costs and performance in each value- performance in each value- creating activity and look for ways creating activity and look for ways to improve itto improve it
Set benchmarks by assessing the Set benchmarks by assessing the competitor’s costs and performance competitor’s costs and performance to get a to get a competitive advantagecompetitive advantage
Proper coordination between Proper coordination between different departmentsdifferent departments
Each department in an Each department in an organisation creates walls that organisation creates walls that slow down the delivery of qualityslow down the delivery of quality
Some terms……Some terms……
Value delivery Network:Value delivery Network: A company’s supply chain and how it partners with A company’s supply chain and how it partners with
specific suppliers and distributors to make products specific suppliers and distributors to make products and bring them to marketsand bring them to markets
It also involves looking into the value chain of It also involves looking into the value chain of suppliers, distributors and customerssuppliers, distributors and customers
Goods are pulled by demand and pushed by supplyGoods are pulled by demand and pushed by supply Develop a quick response systemDevelop a quick response system
VALUE NETWORKVALUE NETWORK
A system of partnerships and A system of partnerships and alliances that a firm creates to alliances that a firm creates to source, augment and deliver its source, augment and deliver its offeringoffering
VALUE PROPOSITIONVALUE PROPOSITION
It is the whole cluster of benefits It is the whole cluster of benefits the company promises to deliver.the company promises to deliver.
VALUE PROPOSITION & VALUE VALUE PROPOSITION & VALUE DELIVERY SYSTEM WILL DELIVERY SYSTEM WILL DETERMINE CUSTOMER DETERMINE CUSTOMER LOYALTY TO A LARGE EXTENTLOYALTY TO A LARGE EXTENT
HIGH PERFORMANCE HIGH PERFORMANCE BUSINESSESBUSINESSES
Some companies navigate through problems Some companies navigate through problems to reach their value proposition and deliver to reach their value proposition and deliver predetermined goals.predetermined goals.
Key success factors:Key success factors:
a.a. StakeholdersStakeholders
b.b. ProcessesProcesses
c.c. ResourcesResources
d.d. OrganisationOrganisation
Stakeholders:Stakeholders: EmployeesEmployees CustomersCustomers ShareholdersShareholders SuppliersSuppliers PartnersPartners DistributorsDistributors
PROCESSESPROCESSES DepartmentalizationDepartmentalization DelegationDelegation Reengineering the work flowsReengineering the work flows New product developmentNew product development Building cross functional teamsBuilding cross functional teams
RESOURCESRESOURCES LabourLabour MaterialsMaterials MachinesMachines InformationInformation InfrastructureInfrastructure Money , capitalMoney , capital
Outsourcing for efficiency and profit Outsourcing for efficiency and profit maximisationmaximisation
CORE COMPETENCECORE COMPETENCE Term coined by Term coined by C.K.PrahladC.K.Prahlad It is an attribute that is a source of It is an attribute that is a source of
competitive advantage as it makes a competitive advantage as it makes a significant contribution to perceived significant contribution to perceived customer benefitscustomer benefits
Has applications to a wide variety of Has applications to a wide variety of marketsmarkets
It is difficult for competitors to imitateIt is difficult for competitors to imitate It accrues to companies that possesses It accrues to companies that possesses
distinctive capabilities.distinctive capabilities.e.g. Wal-Mart : product replenishment, e.g. Wal-Mart : product replenishment,
information system design and logisticsinformation system design and logistics
ORGANISATION AND ORGANISATION AND ORGANISATIONAL CULTUREORGANISATIONAL CULTURE
STRUCTURESTRUCTURE
POLICIESPOLICIES
CULTURECULTURE