marketing management session 2 - group 1
TRANSCRIPT
Session 2 Marketing Management
GROUP 1ARRIBE-CATUNGAL-GARCIA-MEDINA
Chapter 5 Creating Long-term Loyalty
Relationships#mayForever
CHARMIE DUNGCA ARRIBE, MD
Chapter Questions• What are customer value, satisfaction, and
loyalty, and how can companies deliver them?
• What is the lifetime value of customers, how can marketers maximize it?
• How can companies attract and retain the right customers & cultivate strong customer relationships?
• What are the pros & cons of database marketing?
Building Customer Value, Satisfaction & Loyalty
#CustomerDelight
Figure 5.1 Kotler 14th edition
Figure 5.1 Organizational Charts
What is Customer Perceived Value?
Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
Figure 5.2 Determinants of CPV Kotler’s 14th edition
Figure 5.2 Determinants of Customer Perceived Value
Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost
Steps in a Customer Value Analysis
• Identify major attributes and benefits that customers value
• Assess the qualitative importance of different attributes and benefits
• Assess the company’s and competitor’s performances on the different customer values against rated importance
• Examine ratings of specific segments• Monitor customer values over time
What is Loyalty?#keepthemLoyal
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.
Table 5.1 Kotler 14th edition
Top Brands in Customer Loyalty for 2010
1. Apple iPhone2.Clairol (hair color)3.Samsung4.Mary Kay5.Grey Goose Vodka6.Clinique7.AVIS8.Walmart9.Google10.amazon.com
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The Value Proposition
The whole cluster of benefits the
company promises to deliver
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Measuring Satisfaction#SatisfactionGuaranteed
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive Performance
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What is Quality?#TotalQuality
Quality is the totality of features andcharacteristics of a product or
service that bear on its ability to satisfy
stated or implied needs.
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Maximizing Customer Lifetime Value
#ToTheMaxxx
Customer Profitability
Customer Equity
LifetimeValue
Figure 5.3 Kotler 14th edition
Figure 5.3 Customer-Product Profitability Analysis
Estimating Lifetime Value#SpendALifetime
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What is Customer Relationship Management?
#ReleationshipsBeLike
CRM is the process of carefully managing detailed information about individual customers and all customer touchpoints to maximize customer loyalty.
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Framework for CRMIdentify prospects and customers
Differentiate customers by needs and value to company
Interact to improve knowledge
Customize for each customer
Attracting & Retaining Customers
Customer Retention Data#akinkanalang
• Acquiring new customers cost 5X more than satisfying & retaining current ones
• average company losses 10% of its customers each year
• 5% reduction in the customer defection rate can increase profits by 25 - 85%
• profit rate tends to increase over the life of the retained customer due to increased purchases, referrals, price premiums, & reduced operating costs to service
Kotler 14th edition
Managing Customer Base
Reduce the rate of defection
Increase longevity
Enhance “share of wallet”
Terminate low-profit customers
Focus more effort on high-profit customers
Building Loyalty#KeepThemLoyal
• Create superior products/services for target market• cross departmental planning is key for customer
satisfaction & retention• Integrate the “Voice of the Customer” in all business
decisions• Organize a database of information on individual
customer needs/preference/conatacts• Make accessible easy to customer to reach company
staff• assess the potential frequency programs• Run award programs recognizing outstanding
employees
Loyalty Programs
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Customer Database & DB Marketing
#MarketersMustKnow• Customer database
• Database marketing
• Mailing list
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Data mining#DataMiningGoal
To identify prospects
To target offers
To deepen loyalty
To reactivate customers
To avoid mistakes
Kotler 14th edition
Don’t Build a Database When
• The product is a once-in-a-lifetime purchase
• Customers do not show loyalty
• The unit sale is very small
• The cost of gathering information is too high
• There is no direct contact between seller and ultimate buyer
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Perils of CRM• Implementing CRM before creating a
customer strategy
• Rolling out CRM before changing the organization to match
• Assuming more CRM technology is better
• Stalking, not wooing, customers
Chapter 6Analyzing Consumer
MarketsMARIZEL CATUNGAL, MD
Will address the ffg questions:• How do consumer characteristics influence buying
behavior?
• What major psychological processes influence consumer responses to the marketing program?
• How do consumers make purchasing decisions?
• In what ways do consumers stray from a deliberative, rational decision process?
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Figure 6.1 Model of Consumer Behavior
Will address the ffg questions:• How do consumer characteristics influence buying
behavior?
• What major psychological processes influence consumer responses to the marketing program?
• How do consumers make purchasing decisions?
• In what ways do consumers stray from a deliberative, rational decision process?
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What Influences Consumer Behavior?
Cultural Factors
Social Factors
Personal Factors
#EverythingAboutYou
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1. What is Culture?Culture is the fundamental determinant of a person’s wants
and behaviors acquired through socialization processes with family and other key institutions.
Cultural values such as achievement and success, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness.
Different countries, different views, different values.Marketers should understand cultural values in every
country to understand how to best market products and find opportunities for new products.
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SubculturesNationalities
Religions
Racial groups
Geographic regions
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Social Classes
Upper uppersLower uppersUpper middlesMiddle class
Working classUpper lowersLower lowers
Social class members show distinct product and brand preferences in many areas, and differ in media preferences
Upper-class prefers magazines and books; news and drama
Lower-class prefers TV; reality shows and sports
Language difference
Social Classes
http://www.financialplanningph.com/mayaman-ka-na-ba/
#HiClassWaClassBuyMaxx
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2. Social Factors
Referencegroups
Social roles Statuses
Family
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Reference GroupsMembership groups
Primary groups
Secondary groups
Aspirational groups
Dissociative groups
Reference Groups
OPINION LEADERS: highly confident, socially active, frequent users, sought for guidance in buying decision- celebrities, politicians, athletes
#I’llBuyWhatHeBuys
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Family Distinctions Affecting Buying Decisions
• Family of Orientation• Parents and siblings
• Family of Procreation• Person’s spouse and
children• Wife- main purchasing agent
• Dutch Boy’s “twist and pour paint” for women
#OrderNiMisis
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Roles and Status
People choose products that reflect and communicate their role and their actual or desired status in society. Marketers must be aware of the status-symbol potential of products and brands.
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3. Personal Factors
Age
Values
Life cyclestage
Occupation
Personality
Self-concept
Wealth
Lifestyle
#It’sAllAboutYou
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The Family Life Cycle
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Brand Personality
Sincerity-down to earth, honest, wholesome, cheerful
Excitement-daring, spirited ,imaginative, up-to-date
Competence-reliable, intelligent, successful
Sophistication-upper-class and charming
Ruggedness-outdoorsy and tough
https://austudentkevin.wordpress.com/2015/04/26/nikes-brand-personality/
#CreateBrandPersona
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Lifestyle Influences
Multi-tasking
Time-starved
Money-constrained
#ThisIsMyLifeMyTimeMyMoney
LOHAS (lifestyles for health and sustainability) Market Segments
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Figure 6.1 Model of Consumer Behavior
Will address the ffg questions:• How do consumer characteristics influence buying
behavior?
• What major psychological processes influence consumer responses to the marketing program?
• How do consumers make purchasing decisions?
• In what ways do consumers stray from a deliberative, rational decision process?
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Key Psychological Processes
Motivation
MemoryLearning
Perception
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1. Motivation
Freud’sTheory
Behavioris guided by subconsciousmotivations
Maslow’sHierarchyof Needs
Behavioris driven by the lowest, unmet need
Herzberg’sTwo-Factor
Theory
Behavior isguided by motivating
and hygienefactors
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2. Perception
Selective Attention
Subliminal Perception
Selective Retention
Selective Distortion
#WagKulangSaPansin
3. LEARNING- teaches marketers that they can build demand for a
product by associating it with strong drives, using motivating cues and providing positive reinforcement
4. MEMORY- brand knowledge as a node in memory- Brand associations- all brand-related thoughts,
feelings, perceptions, images, experiences, beliefs, attitudes etc
#MaalaalaMokaya
Will address the ffg questions:• How do consumer characteristics influence buying
behavior?
• What major psychological processes influence consumer responses to the marketing program?
• How do consumers make purchasing decisions?
• In what ways do consumers stray from a deliberative, rational decision process?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Figure 6.4 Consumer Buying Process
Problem Recognition
Information Search
Evaluation
Purchase Decision
PostpurchaseBehavior
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Consumer Buying Process
Marketer’s job is to understand the behavior at each stage.
The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumer’s levels of post purchase product satisfaction, use and disposal, and the company's actions.
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Figure 6.5 Successive Sets Involved in Consumer Decision Making
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Table 6.4 A Consumer’s Evaluation of Brand Beliefs About Laptops
Will address the ffg questions:• How do consumer characteristics influence buying
behavior?
• What major psychological processes influence consumer responses to the marketing program?
• How do consumers make purchasing decisions?
• In what ways do consumers stray from a deliberative, rational decision process?
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Figure 6.6 Steps between Evaluation of Alternatives and Purchase Decision
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Non-Compensatory Models of Choice
• Conjunctive• Lexicographic• Elimination-by-aspects
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Consumer’s decision to modify, postpone or avoid a purchase decision is influenced PERCEIVED RISKS:
Functional
Physical
Financial
Social
Psychological
Time
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Figure 6.7 How Customers Use and Dispose of Products
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Other Theories of Consumer Decision Making
Involvement• Elaboration Likelihood Model
• Low-involvement marketing strategies
• Variety-seeking buying behavior
Decision Heuristics• Availability• Representativeness• Anchoring and adjustment
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Mental Accounting
• Consumers tend to…• Segregate gains• Integrate losses• Integrate smaller losses with larger gains• Segregate small gains from large losses
Chapter 7Analyzing Business
MarketsALEJANDRO GARCIA, MD
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Chapter Questions
• What is the business market, and how does it differ from the consumer market?
• What buying situations do organizational buyers face?
• Who participates in the business-to-business buying process?
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Chapter Questions
• How do business buyers make their decisions?
• How can companies build strong relationships with business customers?
• How do institutional buyers and government agencies do their buying?
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What is Organizational Buying?
Organizational buying refers to the decision-making process by which formal organizations establish the need for purchased products and services, and identify, evaluate, and choose among alternative brands and suppliers.
What is the business market and how does it differ from the consumer
market? #changeme #ibahinmoko• Fewer, larger buyers
• Close supplier-customer relationship
• Professional purchasing
• Multiple buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Geographically concentrated buyers
• Direct purchasing
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What Buying Situation do organisational buyers face? #buyingbigtime
Straight rebuy
Modified rebuy
New task
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Chapter Questions
• What is the business market, and how does it differ from the consumer market?
• What buying situations do organizational buyers face?
• Who participates in the business-to-business buying process?
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#thebuyingcenterInitiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
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Chapter Questions
• How do business buyers make their decisions?• How can companies build strong relationships
with business customers?• How do institutional buyers and government
agencies do their buying?
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Stages in the Buying Process: Buyphases
#buywiselynotfrivorously
• Problem recognition• General need description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine specification• Performance review
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Table 7.2 Buygrid Framework
How can companies build strong relationships with business
customers? #relationshipgoals• Create more value for both parties
• Building trust
• availability of alternatives
• importance of supply
• complexity of supply
• supply market dynamism
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Stockless purchase plans
Vendor-managedinventory
Continuous replenishment
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Establishing Corporate Trust and Credibility
Expertise
LikeabilityTrustworthiness
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Factors Affecting Buyer-Supplier Relationships
Availability of alternatives
Supply marketdynamism
Complexity ofsupply
Importance ofsupply
How do institutional buyers and government agencies do their buying?
#palakasan
• Institutional markets (schools, hospitals, prisons, etc.) provide goods and services to people in their care.
• Require a great deal of paperwork from vendors
• Tend to favor open bidding and domestic companies
CHAPTER 8 IDENTIFYING MARKET SEGMENTS
AND TARGETSElizabeth Anne Yturralde-Medina
Chapter Questions• What are the different levels of market
segmentation?• How can a company divide a market into
segments?• How should a company choose the most
attractive target markets?• What are the requirements for effective
segmentation?
HASHTAG AWAY• #whoarepeopleinyourneighborhood• #GenerationXYZ• #wearethemasteroftheuniverse• #collectandcollectthenselect • #whosesideareyouon• #eyesontheprize• #ikawakokayotayonglahat• #babyImworthit• #YourWISHismycommand• #feelingclose
Effective Targeting Requires Marketers:
• Identify and profile distinct groups of buyers who differ in their needs and preferences
• Select one or more market segments to enter• Establish and communicate the distinctive
benefits of the market offering
What is a Market Segment?
• A market segment consists of a group of customers who share a similar set of needs ad wants.
Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
BASES FOR SEGMENTING CONSUMER MARKETS
• GEOGRAPHICAL SEGMENTATION #whoarepeopleinyourneighborhoodMarket is divided into different geographical units– Nations, states, regions, countries, cities or
neighborhoods– Company operates in one , two or all with variations– PRIZM Clusters– Geoclustering
GEOGRAPHICAL SEGMENTATION EXAMPLES
• Foreign– Hilton Hotels,Starbucks
• Local– Banana catsup, papaya soap
Demographic Segmentation
Life Stage
Gender
Income
Generation
Social Class
DEMOGRAPHIC SEGMENTATION examples
• Foreign: Crest
• Local: Ponds products
DEMOGRAPHIC SEGMENTATION examples (gender)
DEMOGRAPHIC SEGMENTATION examples (INCOME)
DEMOGRAPHIC SEGMENTATION (Generation) #GenerationXYZ
DEMOGRAPHIC SEGMENTATION(Race & Culture) #wearethemasteroftheuniverse
PSYCHOGRAPHIC SEGMENTATION
• Psychology and demographics to understand consumers
• Consumers are grouped by psychological/personality traits, lifestyle or values
The VALS Segmentation System
Behavioral SegmentationDECISION ROLES Behavioral Variables
Initiator Occasions
Influencer Benefits
Decider User Status
Buyer Buyer-Readiness
User Loyalty Status
Usage Rate
Attitude
BEHAVIORAL SEGMENTATION EXAMPLES
The Brand Funnel Illustrates Variations in the Buyer-Readiness Stage
• Aware• Ever tried• Recent trial• Occasional user• Regular user• Most often used
Loyalty Status#whosesideareyouon
Switchers
Shifting loyals
Split loyals
Hard-core
Behavioral Segmentation Breakdown
Bases for Segmenting Business Markets
MARKETING TARGETING
#collectandcollectthenselect
Steps in Segmentation ProcessNeeds-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-MixStrategy
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
Preference Segments
• Homogeneous preferences exist when consumers want the same things
• Diffused preferences exist when consumers want very different things
• Clustered preferences reveal natural segments from groups with shared preferences
PORTER’S FIVE FORCES
Four levels of Micromarketing
Segments
Local areas Individuals
Niches
EVALUATING AND SELECTING THE MARKET SEGMENTS
#eyesontheprize
Patterns of Target Market Selection
FULL MARKET COVERAGE#ikawakokayotayonglahat
Undifferentiated vs differentiated
Patterns of Target Market Selection
NICHE/ SINGLE SEGMENT CONCENTRATION#babyImworthit
MULTIPLE SEGMENT SPECIALIZATION
• SELECTIVE SPECIALIZATION
INDIVIDUAL MARKETING Customerization
#YourWISHismycommand
• combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice
INDIVIDUAL MARKETING EXAMPLES
• Foreign–Signature custom bike shops,Nike ID, adidas customize it
• Local– PCX Express, personalized items
LOCAL MARKETING/ MICROMARKETING#feelingclose
• Tailor to fit to local customer groups• “GRASSROOTS MARKETING”
– Getting as close and personally relevant
The Long Tail Equation• Chris Anderson explains :
– The lower the cost of distribution, the more you can economically offer without having to predict demand;
– The more you can offer, the greater the chance that you will be able to tap latent demand for minority tastes; and
– Aggregate enough minority taste, and you may find a new market.
THANK YOU