Lecture

#14

Formulating Business Marketing

Strategy (Understanding the
Complete Customer Experience)

Dr. Pawan Kumar

 Lecture Outcome

 Ability to implement the nuances of complete

customer experience and service quality aspects in
B2B marketing
 Understand the roles that service quality, customer
satisfaction and loyalty assume in service market
success
 Examine the factors in formulating service marketing
strategy

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 Test your Knowledge
………………includes all that is linked up in memory about
the brand. It could be specific to attributes, features,
benefits or looks of the brand.

a. Brand attitude

b. Brand Associations

c. Brand relationship

d. Brand image

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Sony laptops have a sticker on them which says
‘Intel inside’. This is an example of what?

A. corporate branding
B. dual branding
C. piggyback branding
D. multibranding
E. co-branding

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 Let’s Discuss
What is Customer’s Experience?
Why Customer Experience is important?
How can we bolster the B2B Buyer’s Experience?

Situation 1:
When a company buys a high-end document processor
from Xerox or Canon, it is buying a physical product with a
bundle of associated services. Describe some of the
services that might be associated with such a product.
Develop a list of the elements or points of interaction that
might be reflected in a customer experience map. How can
buyers evaluate the quality or value of these services?

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 Case Study: SafePlace Corporation

1. Describe the core service concept and benefits that

SafePlace provides to a hotel and its guests. How would
you describe these benefits?
2. What steps could John Fannin take to fuel the growth of
SafePlace?
3. Assess the prospects for SafePlace in the education
market and suggest a potential strategy the firm might
follow to penetrate this market.

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 Bolstering The B2B Buyer's Online Experience
Posted on September 3, 2020
• https://www.pymnts.com/news/b2b-payments/2020/bolstering-the-b2b-
buyer-online-experience/

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 From Products to Solutions
Many companies also think that the best way to
win customers is to develop a superior product and
continually work to make it better.
In other words, they start with the product &
services first and consider customer relations as an
afterthought.
This is an error in thinking!
A better approach is to understand the customer by
mapping out experiences.

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 Customer Experience Maps
 One way to understand the customer better is to “Map” out
experiences at various “touchpoints.”

 Touchpoints are spots where a seller has direct or indirect contact

with the customer about the product or service over time.

 The map points out what is most important in the

seller/customers’ experience.
 Ultimate Goal of Experience Map
The ultimate goal of an Experience Map is to identify:
1. The value that customers place on different levels of
performance for each element of the experience.
2. The customers’ minimal expectations for each element.
3. The customers’ perception of the firm’s performance
versus that of key competitors.
 Once the map is developed, the next step is to meet with
the customer and pare down the list to the most critical
issues.
 Customer Experience Life Cycle Map
Figure 9.1 The First Step in Understanding a Customer’s Experience is to Develop a Life Cycle Map

A representative set of customer-company interactions

Product
Relationship Provider Account Order Problem Account
reception Payment
initiation evaluation setup placement resolution maintenance
and use

The company The customer The customer The customer The customer The customer The customer The customer
exposes the gets initial price obtains selects the tracks order files a claim receives and maintains
customer to its and lead-time materials for product status and obtains validates the profile
marketing quotes account setup resolution invoice information
message The customer The company
The customer The customer places the order and the The customer The customer The customer
The customer puts out an RFP provides (fills out the customer notifies the makes the maintains
seeks relevant account profile order form arrange the company of a payment supplies
information The customer information final delivery problem and
evaluates The customer terms obtains The company
providers and The company prepares resolution provides
negotiates confirms setup specialty The customer general support
terms and and activation documents receives and The customer (not related to
pricing when required inspects the seeks an problems)
The company (for example, product invoice
The customer performs for rush adjustment The customer
selects the courtesy follow- delivery) The customer and obtains obtains ongoing
provider up refuses or resolution price quotes
The company accepts the
The customer and the product
requests customer
product arrange initial
information delivery terms

SOURCE: David Rickard, “Winning by Understanding the Full Customer Experience,” The Boston Consulting Group, Inc., 2007, p. 6. Accessed at
http://www.bcg.com
 B2B CX Insights

https://www.youtube.com/watch?v=EY2F47K9PGA
CX Success Stories in B2B..
1. IBM
IBM assigns each customer a team of specialists to
help them integrate IBM Cloud Storage into their
existing processes by training them on the best
applications for their business. When customers truly
understand the product, they are more engaged. IBM
regularly asks for feedback from its B2B customers to
improve its products, which contributes to the company’s
high customer retention rate.
https://www.forbes.com/sites/blakemorgan/2019/06/04/the-10-best-b2b-
customer-experiences/#52d9294f53f5
 Second success story in B2B: CX
2. General Electric
GE operates two customer experience centers in Pittsburgh
and Munich that showcase its many capabilities. Potential
customers can visit the centers to see GE’s manufacturing
systems in action and discuss a personalized plan with
customer experience representatives. Instead of just telling
potential customers about their products, the customer
experience centers allow companies to see exactly how GE
could help their business grow.

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 Product- to a Solution-Centered
Approach

Don’t start with product first. Instead, start with

understanding the customer’s problem and end with
products and services that solve that problem.

The exchange should not be transaction-based but rather

be an interactive exchange with the objective of
developing a relationship around c0-creating value with
the customer.
 From a Product to a Solutions Perspective

Product Perspective Solutions Perspective

Value Win by creating innovative Win by creating and delivering

Proposition products and enriching superior customer solutions
features of existing products
Value Value is created by the firm Value is co-created by the customer
Creation and the firm
Designing Start with the product or Start with the customer problem, and
Offerings service, and then target then assemble required products and
customer segments services to solve the problem
Company- Transaction-based Interaction-based and centered on
Customer the co-creation of solutions
Relationship
Focus on Quality of internal processes Quality of customer-firm interactions
Quality and company offerings
 customer’s role in New services
 Customer adaptiveness refers to the degree to which a customer
is willing to adjust its routines and processes to accommodate a
supplier’s products.
 Solution effectiveness is enhanced if the customer provides
information and guidelines concerning the priorities and
sensitivities of various stakeholders in the customer firm.
 Solution effectiveness can be enhanced if the customer provides
counseling to a supplier concerning the unique elements of its
operations.
 Benefits of Solution Marketing

It offers:

I. New avenues of growth

II. New ways to differentiate
III. Higher customer loyalty
How Services Differ from Goods
Inseparable
Inseparable––produced
produced and
and
consumed
consumed simultaneously
simultaneously

Non-standardized
Non-standardized
Heterogeneous
Heterogeneous

Perishable –
Use it or Lose it

Intangible –
Lacks ownership
Business services that are intangible-dominant market offerings.
Few services are totally intangible – they often contain
elements with tangible properties.
 Service Quality
What is a good service?
A good service is

one that meets or exceeds the customer’s

expectations.

Therefore, marketers should position their service a

bit below what they, in fact, can deliver.

Under-promise and over-deliver!

5 Dimensions of Service Quality
 Customer Satisfaction and Loyalty

Customer-linking processes that affect satisfaction:

1. Basic elements of the product or service that
customers expect all competitors to provide.
2. Basic support services, such as technical assistance
or training, that makes product more effective.
3. A recovery process for quickly fixing product or
service problems.
4. Extraordinary services that so excel in solving
customers’ unique problems or in meeting customer
needs that these services make the product or service
seem customized.
 Discussion: Why Service Recovery
is important ?
Sometimes there are problems.

The firm did not do everything it promised.

What should they do?

The way to address this is to institute a service recovery

strategy.
 Service Recovery Strategy
 Service recovery strategy encompasses procedures,
policies, and processes that firms use to resolve customer
service problems promptly and effectively.

 One way of resolving a discrepancy is to negotiate the

resolution.

 “What’s it going to take for you to be very satisfied with

the resolution of this complaint?”
 Zero Defections
 There is no such thing as zero defections, however providing high quality
service has an effect of keeping customers longer.

 It is beneficial in terms of sales and profits because:

1. The firm can charge more.
2. The cost of doing business is reduced.
3. Long-term customers provide word-of-mouth advertising.

 Therefore, the strategy is to:

1. Track defections to find out “why.”
2. Recognize that continuous improvement is not a cost but an investment in
a customer that generates profits.
3. Measure return on quality.
 Marketing Mix for Service Firms
Meeting the needs for the service market
requires an integrated marketing strategy that:

1. Selects a target segment.

2. Customizes the service marketing mix (4 P’s).
3. Promotes a relationship vs. a transactional
approach.
4. Emphasizes the total buyer-seller interaction
process.
Conceptualizing the Service Product
 Service & Delivery

 For tangible products that demand service, both the service

performance and the delivery system create and deliver product
benefits to the customer.

 For example: The tangible product (copy machine) needs to be

cleaned and serviced. If either the service or delivery system
fails, the product fails. If both are good, then customers consider
the total package good.
 Hybrid Offering
Combination of one or more goods and one or more
services that together offer more customer benefits than if
the good and service were available separately
The installed base of products at customer organizations
represents a unique asset for most manufacturing firms.
Four resources:
1. Installed base;
2. Product development assets;
3. Sales force; and
4. Field service organization

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Distinctive Capabilities to Launching Hybrid
Offerings

• Service-related data processing and interpretation

capability
• Execution risk assessment and mitigation
capability
• Design-to-service capability
• Hybrid offering sales capability
• Hybrid offering deployment capability
Hybrid Service Offerings Classification
• Product life cycle services
• Asset Efficiency services
• Process support services
• Process delegation services
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Poll…

Gap Analysis is associated with:

A.Product quantity
B.Product quality
C.Service quality
D.Service quantity
E.All of these