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Paradigm Shift in Marketing

Paradigm Shifts in Marketing

Paradigm Shift: Shift from transactions to relationship focus with emphasis on customer relationships and formation and management of strategic alliances Fundamental Requirements:
Focus on customer driven marketing practices Focus on profitability Focus on strategic marketing practices

Three Requirements
a) Focus on customer driven marketing practice: Innovation and customer oriented business decisions b) Focus on profitability: On value rather than sales volume. c) Focus on strategic marketing practices:STP.

Competitive advantage through Relationship Marketing

Relationship Marketing : Attracting ,maintain, and in multiservice organization ,enhancing the customer and relationships,thus increasing loyalty of profitable customers. As in information era ,business reengineering ,automation ,downsizing ,financial restructuring ,efficient fund reduced manpower and financial cost. RM is having potential to improve productivity through efficiencies and effectiveness.

Continued. IT development, data warehousing, data mining have made possible to maintain 1-1 relationship. Also through personnel management, call centres,interactive voice ,online dial up connections ,websites. These help to gain info about customer needs and buying behavior to design and develop services.

RM and Consumer Markets

Consumer like to reduce choices by engaging ongoing loyalty relationship with marketers. Form of commitment made by consumers to patronize selected products, services and marketers rather than options. Regarding product Brand loyalty and brand equity Regarding Service If services and provider are inseparable. Like Healthcare and doctors

Continued.. To achieve greater efficiency in decision making to reduce information processing to achieve cognitive consistency and to reduce perceived risks associated with future choices. Engage as norms set by family, peer groups,govt. mandates, religious tenets, employer influence and marketer induced policies

RM and Industrial Markets

Business Market:Long selling cycles,diff sets of deccision makers & influencers E-commerce,Electronic Market Places Info and documentation Vendor comparison Day to day trading to reduce inventory For Commodity : Low value and little differnce,hence open market purchase For top customers: Rising customer acquisition cost,maturing markets commoditisation and lower vendor to focus on building loyalty as to develop long term relationship with customers

CRM Concepts
Focusing on key customers and building strong relationships Proactively generate high level of customer satisfaction with interaction with customer. Anticipate customers need by careful study of environment ,customer processes and behavior . Building closer ties with customer, sometimes by integrating systems Crafting value perception for customer. The customer see relationship with vendor as something that brings value and adds competitive advantage.

KAM as important part of CRM in B2B Marketing

Key Account : Profit, prestige ,reference value, permit access to new markets and technologies and might be a small or large org or operating locally or globally. a) KAM for customer segmentation:
Growth in profits as compared to growth in sales Characteristics of Key account Cost of servicing each customer vis--vis contribution Impact of losing key account on bottom line of the firm

Continued. b) Customer Retention Strategy: Building customer loyalty and higher level of satisfaction. c) Growth and Development Strategy: Building KAM ,is to combine customer retention with building customer share.

CRM and Growth of Services Marketing

Telecom Sector Airlines Industry Retail Industry Financial Services

Evolution of Marketing Theory

a) b) c) d) e) f) g) h) i) j) k) Self Sufficiency stage Simple Barter stage The local Markets stage Money Economy stage Early Capitalism stage Production Oriented stage Sales Oriented stage Marketing Oriented stage Consumer Oriented stage Society oriented stage Management Oriented stage

Transactional /Relationship Marketing

Transactional Marketing Approach Orientation to single sales Discontinuous customer contact Focus on product features Reducing price based on sensitivity analysis with right promotional measure No measures to build the ongoing business After sales support is poor as it is seen as cost Do the deal and disappear Relationship Marketing Philosophy Orientation to customer retention Continuous customer contact Focus on customer value Promotes value and explain the benefits Measures like membership, clubs like frequent flyer to build on the going business After Sales support is excellent, as it is seen as investment Negotiate win-win and stay around to benefit later on from the same customer in terms of revenue and profitability Data mining to develop and enhance relationship High emphasis on customer service

Adding new customers with the existing customer Limited emphasis on customer service

4 Ps of Marketing Mix
a) b) c) d) Product Mix Price Mix Place Mix Promotion Mix

Extended Ps of Marketing Mix

People Process Physical Evidence