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Master of Business Administration MBA Semester 4 MK0006 Services Marketing and Customer Relationship Management Assignment Set 1

Q.1 Mention the different bases for segmentation with appropriate examples.

Ans. Bases for Segmentation in Consumer Markets Consumer markets can be segmented on the following customer characteristics.

Geographic Demographic Psychographic Behavioralistic

Geographic Segmentation The following are some examples of geographic variables often used in segmentation.

Region: by continent, country, state, or even neighborhood Size of metropolitan area: segmented according to size of population Population density: often classified as urban, suburban, or rural Climate: according to weather patterns common to certain geographic regions

Demographic Segmentation Some demographic segmentation variables include:


Age Gender Family size Family lifecycle Generation: baby-boomers, Generation X, etc. Income Occupation Education Ethnicity Nationality Religion Social class

Many of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several stages, for example, full-nest I, II, or III depending on the age of the children. Psychographic Segmentation Psychographic segmentation groups customers according to their lifestyle. Activities, interests, and opinions (AIO) surveys are one tool for measuring lifestyle. Some psychographic variables include:

Activities Interests Opinions Attitudes Values

Behavioralistic Segmentation Behavioral segmentation is based on actual customer behavior toward products. Some behavioralistic variables include:

Benefits sought Usage rate Brand loyalty User status: potential, first-time, regular, etc. Readiness to buy Occasions: holidays and events that stimulate purchases

Behavioral segmentation has the advantage of using variables that are closely related to the product itself. It is a fairly direct starting point for market segmentation. Bases for Segmentation in Industrial Markets In contrast to consumers, industrial customers tend to be fewer in number and purchase larger quantities. They evaluate offerings in more detail, and the decision process usually involves more than one person. These characteristics apply to organizations such as manufacturers and service providers, as well as resellers, governments, and institutions. Many of the consumer market segmentation variables can be applied to industrial markets. Industrial markets might be segmented on characteristics such as:

Location Company type Behavioral characteristics

Location In industrial markets, customer location may be important in some cases. Shipping costs may be a purchase factor for vendor selection for products having a high bulk to value ratio, so distance from the vendor may be critical. In some industries firms tend to cluster together geographically and therefore may have similar needs within a region. Company Type Business customers can be classified according to type as follows:

Company size Industry Decision making unit Purchase Criteria

Behavioral Characteristics In industrial markets, patterns of purchase behavior can be a basis for segmentation. Such behavioral characteristics may include:

Usage rate Buying status: potential, first-time, regular, etc. Purchase procedure: sealed bids, negotiations, etc.

Q.2 Discuss the challenges involved in services marketing.

Ans. Those who work in a service business often face greater marketing challenges than those who offer tangible products. The service marketer typically does not have the advantage of demonstrating the physical features of a product, so it may be difficult for the prospect to comprehend the benefits of the service. Additional creativity is often required to market services successfully.

Marketing Intangibles

Unlike the marketing of products, which allows the prospect to use five senses as part of the evaluation process, selling services requires an explanation of an intangible product. As a result, it may be harder to envision how the service can benefit your potential customer. The prospect also may have difficulty determining if the value of the service is worth the asking price.

Developing Trust

Marketers of services may have a more difficult time in developing the trust of the prospect. For example, an insurance agent is essentially marketing a promise that his company will deliver when it comes time to pay a claim. If the agent does not appear trustworthy or if his company has a poor reputation, he will have a hard time convincing the prospect to purchase a policy.

Extra Competition

Service companies are not only competing against other companies in the same market, but sometimes against their prospects as well. For example, a company that markets a bookkeeping service for small businesses may run into a situation where the prospect decides to do the accounting as a way of minimizing expenses.

Emphasizing Service Instead of Features

Marketers of services need to focus on the customer service aspect of what they are selling, as opposed to the features. For example, instead of emphasizing a multi-car discount or first accident forgiveness, which are offered by many insurance companies, the agent should make the prospect feel that personal attention will be given in the time of need to ensure that the policy provisions are executed properly.

Creating a Need

Service marketers may have more of a challenge in creating a need for what they are selling. While an individual may understand the necessity to purchase a new car, such as when a current vehicle breaks down, the business owner may not understand why the purchase of advertising is necessary. The salesperson must create a need for the service by showing examples of how other businesses increased revenues with an advertising campaign.

Q.3. What do you mean by customers service perception and how to influence customer perceptions?

Ans. Customer Expectation of services Companies often have different perspectives on customer service. These include: All the activities required to accept process, deliver and fulfill customer orders and to follow up on any activity that has gone wrong. Timeliness and reliability of delivering products and services to customers in accordance with their expectations. A complex of activities involving all area of the business which combine to deliver the companys products and services in a fashion that is perceived as satisfactory by the customer and which advances the companys objectives.

Total order entry and all communications with customers, all invoicing and total control of defects. Timely and accurate delivery of products and services ordered by customers with accurate follow up and enquiry response including timely delivery of invoice. These alternative views illustrate the extent to which the meaning of customer service varies considerably from one company to another. The more pragmatic view of customer service is broader than any of these definitions and that it is concerned with the building of bonds with customers and other markets or groups to ensure long-term relationships of mutual advantage, which reinforce the other marketing, mix elements. Customer service can thus be seen as an activity, which provides time, and place utilities for the customer and which also involves pre transaction and post-transaction considerations relating to the exchange process with the customer. Customer Responses: Quality can be viewed from two perspectives internal and external. Internal quality is based on conformance to specifications. External quality is based on relative customer perceived quality. It is essential that quality is measured from the customer perspective, not from what managers within a company think their customer views are! Parasuraman and his colleagues have developed a model, which helps to identify the gaps between the perceived service qualities, that customers receive and what they expect. The model identifies five gaps: 1. Consumer expectation management perception gap. 2. Management perception service quality expectation gap. 3. Service quality specifications service delivery gap. 4. Service delivery external communications to consumers gap. 5. Expected service perceived service gap. Customer complaints, conflicts and solution: Addressing customer complaints are part of running any business. No matter how successful your business is, you will occasionally deal with a dissatisfied customer. Rather than viewing a complainer as a nuisance, look at his complaint as an opportunity to learn how to improve your product or service. Be open to hearing what he has to say and be proactive in your response. 1 Have an action plan for customer complaints. When a customer complains, what she is really doing is telling you how you can improve your service. Have a system in place so customer-service employees can document complaints. Create a customer-grievance form your employees can fill out when a customer is unhappy. Management should collect the grievance forms periodically and review them to identify recurring complaints. 2 Survey all customers for feedback on their buying experience. There are a number of ways to do this. You can have survey forms that can be filled out and dropped in a container. Or you can hand customers a survey form as they leave the store, offering incentives such as a 10 percent discount if they bring or mail it back. You could also have

an online survey that offers a printable store coupon when completed. Your survey form can be as simple as the customer choosing a level of satisfaction from one to five in any given area of service, but leave space for additional comments. 3 Make adjustments based on customer feedback and complaints. Knowing what customers are complaining about will not help you reduce complaints unless you are willing to make changes. Have a brainstorming session with managers and employees to see what changes can be made to prevent customers dissatisfaction. 4 Train employees to provide excellent service. A well-treated customer is less likely to complain than a poorly treated one. The last thing a business owner wants is to have a customer become frustrated by a rude employee. Employees should be trained to treat customers with excellence and be given some leeway in their ability to address customer needs. Examples of Preventive Customer Complaint Management Initiatives at Individual Businesses: A pizza chain widely advertises that when its pizzas do not arrive within a certain time the pizza is free. By establishing an up-front policy about delivery and offering clear. Compensation for when the commitment is not met, customers have an assured outcome (Either pizza on time or free pizza). Customers know in advance what to expect so complaints are minimal, and the on time or free policy becomes an important competitive advantage.

Master of Business Administration-MBA Semester 4 MK0006 Services Marketing and Customer Relationship Management Assignment Set 2

Q.1 Create an appropriate marketing mix for telecommunications organisation. Ans. Marketing Mix of Reliance communications Reliance Communications (NSE: RCOM, BSE: 532712), formerly known as Reliance Infocomm, along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). Reliance Communications Limited, founded by Dhirubhai H Ambani (19322002), is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of Indian rupee64,000 crore (US$13.6 billion), cash flows of Indian rupee13,000 crore ($2.8 billion), and a net profit of Indian rupee8,400 crore ($1.8 billion). The Equity Shares of RCOM are listed on Bombay Stock Exchange Limited and National Stock Exchange Limited. The Global Depository Receipts and Foreign Currency Convertible Bonds are listed on Luxembourg Stock Exchange and Singapore Stock Exchange respectively.

Product Reliance mobile always faced the problem of weak network. So to correct the major have invested over Rs 300 crore to upgrade to NGIP (Next Generation IP) network. Product has to sell itself. Now they are launching about more than 1100 network towers to provide more coverage to its customers. Price There are many ways to price a product. The pricing policy/ strategy vary in various situations. In case of Reliance mobiles they have priced their product at a very low price & they also come up with new plans. Place Another element of Marketing Mix is Place. Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. Reliance Mobiles do not

find it very difficult to find the distribution channel because they are the old players and distribute their product in India. Promotion Another one of the 4Ps is promotion. This includes all of the tools available to the marketer for marketing communication. Reliance has recently started doing heavy promotions. Physical Evidence Physical Evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. As Reliance mobile provide various rental plans. People Reliance always valued their customers. They provide a very cheap call rates affordable to the lower class. Process Process is another element of the extended marketing mix, or 7Ps.There are a number of perceptions of the concept of process within the business and marketing literature. Q.2 What is CRM? Explain the emerging concepts in CRM. Ans. Customer relationship management (CRM) is a widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes principally sales activities, but also those for marketing, customer service, and technical support [1]. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.[2] Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.[3]. Measuring and valuing customer relationships is critical to implementing this strategy. Emerging concepts in CRM. Increase in customer partnering Expansion of customer base Reduction in advertisements and other sales promotion expenses Generation of more and more loyal customers

Easy introduction of new products Reduction in customer recruitment cost Increase in customer partnering Increase in the number of profitable customer

Another emerging concept in CRM maintaining and creating a relationship with the existing customers and new customers. Customer problems solving and timely attention of their grievances and the politeness for the acceptance of the mistakes are caused by the company. Many managers believe that customers are the key to profitability considering the traditional organization. Moreover the customers timely help in their problems and products based descriptions will be present trend in the customers. The customers are the main focal point of the organizations to sort out the problems of the products, its growth, and its competition and so on. Hence the customer is the deciders of the growth of the company. Q.3 How to formulate and implement effective CRM strategies? Ans. How to Develop a Winning CRM Strategy The core of Customer Relationship Management (CRM) is developing a great relationship with your customers. It's about a lot more than just having your contacts organized and having your demographics understood, although these things can certainly help. There are many ways that you can develop a CRM strategy that really works: 1) Really develop emotional bonds with your customers. If your staff can show empathy and sympathy when customers contact them, your customers will feel much more satisfied with the communication they receive from your company. To develop empathy between your customers and your staff, work with your staff to determine some of the frustrations customers may face, and make sure that staff understand that their paycheck comes from customers, not really from the company. How well customers are satisfied and how well they feel comfortable with the company determines whether you can afford to pay your staff. Make sure that your staff understand this and understands that dealing with customers on a personal level -- even when those customers are frustrated or angry -- is what allows your employees to live in their home and keep their families fed. 2) Consider whether your company needs scripts or not. Some companies enjoy having scripts for telephone calls and enjoy having canned responses for e-mail correspondence. This automates responses and allows customers to get similar quality care no matter who they talk to on your team. While some experts advocate scripts as a great way to ensure that a company grows, other experts claim that scripts get in the way of the staff developing a good relationship with the customer. Depending on how well

your staff ad libs, you may wish to introduce or remove scripts in order to provide better customer service. 3) Develop VIP services. Your best customers and your most valuable customers should get preferred service. This may include special pricing, special promotions, and especially special treatment on the phone and via e-mail. You can use the Relenta CRM system to set up a VIP department that allows you to take care of your most valued customers especially well. You can train your staff to answer your VIP customer calls faster and answer the e-mails more quickly as well. This helps VIP customers remain satisfied with the company and keeps them purchasing from your business. 4) Keep your staff enthusiastic about CRM. CRM strategies will simply not work if only management believes in the business strategy. One excellent way to ensure that all your team members believe in CRM and are enthusiastic about the concept is to tie benefits, raises, and other incentives with CRM performance. Another option is to use a very simple CRM program that delivers plenty of features but doesn't overwhelm your staff. A program such as Relenta CRM doesn't require you to install lots of software on company computers and doesn't require your staff to learn a great deal about a completely new program. Relenta CRM is as simple to use as a standard e-mail program, but offers useful databases of contacts, calendars, file sharing, and everything else needed to implement an effective CRM strategy.

Implementing CRM Strategies

The familiar refrain of CRM failure is a hard one to avoid these days with so many industry watchers pointing to flawed strategies among customers, vendors and consultants as the reasons for an overwhelming lack of success. Researchers such as Gartner Group and Meta Group have chronicled failure rates of 5570% for CRM implementations in general, and point to a lack of clear strategy as a key contributor to this dismal industry track record. So, it would seem only rational to turn to these same industry watchers for their answers to the obvious questions that arise out of this: which CRM strategies work, and why? To find out just what CRM strategies are paying off and why these tactics are the cornerstones to success, SearchCRM tracked down five industry experts for their best advice to the masses. What follows is the first in a three-part series on their top tips for effective CRM strategies. Tip 1: Tackle business issues before choosing a technology.

Almost all of the experts agreed that most CRM buyers get confused into thinking that technology is the answer to their problems when in most cases, core businesses processes need to be rethought to better serve customers. "CRM is not about technology. It is about the interplay of strategy, tactics, processes, skills and the technology that supports these areas. In fact, CRM can be done without technology. But it cannot scale without technology. Therefore, firms need to place the emphasis on a balance of these five areas," said Scott Nelson, analyst for Gartner Group, Stamford, Conn. Tom Topolinski, an analyst with Gartner research division Dataquest, agreed. "Consider your current sales, marketing, support and service processes," he said. "[Ask yourself] will this new system fit into them or mandate that they be changed? How much change can I afford? What is driving our current customer philosophy? Will the new system fit into this or mandate change to how we treat our clients?" Tip 2: Explain real business needs to vendors/partners before investing. In speaking to analysts about CRM's disappointment, it becomes immediately clear that a distinct lack of communication between many organizations and their vendor partners has factored heavily into the climate of disenchantment. "Communicate the business issues to your prospective vendors," said David Bradshaw, an analyst at London-based researcher Ovum. "The best suppliers will ask smart questions and come up with smarter solutions that you can by yourself. So don?t cramp their style by dictating technology, instead demand proposals that make business sense." Other analysts concurred that having the right game plan before committing to a vendor will equate to a much higher chance at success. "Be proactive," suggested Denis Pombriant, analyst at Boston-based Aberdeen Group. "Always perform a baseline study of your situation before inviting vendors into the process or perform the study as part of the sales process with a few select vendors. This process was once called needs analysis and was directed by the vendor. The result was identification of problems that the vendors felt qualified to solve which may or may not have been congruent with the actual business problems of the purchasing organization." Tip 3: Keep the customer as priority no. 1. The point of CRM is getting closer to your customers but many analysts feel internal organizational issues often overshadow this goal. "Never lose focus on your customers," Ovum's Bradshaw advised. "Make things better for them, not worse, or they?ll vote with their feet. Customers are smart enough to know that notices beginning ?For your convenience?? usually mean the opposite!"

According to Gartner's Nelson, the customer should be the number one focus throughout developing any CRM strategy. "Organize around the customer and not products or geographies," the analyst said. "All the investment made in systems will not help you if you continue to be structured around products. Customers do not understand your firm's political structures. Don't make them." Tip 4: Eat the elephant in small pieces. Almost all of the experts agreed that having the right schedule should go a long way toward achieving more effective CRM. "Take manageable, deliberate steps towards your ultimate goal of enterprise-wide CRM," offered Ovum's Bradshaw. "Make it work in one area at a time, and make sure you have demonstrable results before moving on. If you can go for the ?easy wins? first, that?s great, but it isn?t always an available option. For example, getting to clean, consistent customer data is never easy, but it is vital." Many of the tipsters suggested taking a "wave approach" that looks at the big picture but deals with various elements as they come up. "CRM is iterative," said Gartner's Nelson. "It often takes a while to see the results. One of the easiest traps to fall into is 'once and done.' CRM is not like that. Firms should think in terms of iterative waves, where they learn more about the customer, and improve their sales, marketing and service abilities with each iteration." Tip 5: Keep it enterprise. Another common theme among the analysts is the war cry to keep top-level executives involved in the CRM process from start to finish, and to emphasize that the enterprise approach cannot fall prey to issues of departmental independence. "Too many executives don?t know what CRM is, and what it really means to their organization, before they start writing big checks," said Allen Bonde, president of the Boston-based Allen Bonde Group. "Once they do [understand CRM], then you need to build consensus among business and IT managers on how to achieve it."