Customer Orientation

Goals of Customer Orientation
A principle which marketing holds is that a company should view and organize its marketing activities from the consumers‟ point of view.

Maximize Consumption Maximize Consumer satisfaction Maximize Choice Maximize Quality of Life

Front-line people Middle Mgt Top Mgt

Modern Customer Oriented Organization

Customer Expectations
Expectations are formed from past buying experience, friends‟ and associates‟ advice, and marketers‟ and competitors‟ information and promises. Expectations and performance should match. Company raising too high expectations will disappoint the buyer. Company if sets too low expectations, will not attract customers.  Successful companies try to match the expectations and delivering performances.

Whether or not the offer lives up to the expectation affects the satisfaction and probability of purchasing the product.Customer 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. Customers estimate which offer will deliver the most perceived value. Total Customer value is the perceived monetary value of the bundle of economic. and act on it. . customers expect from a given market offering. and psychological benefits. functional.

obtaining. it is more than the core positioning of the offering. Total Customer Cost is the bundle of costs customers expect to incur in evaluating. Value Delivery System It includes all the experiences the customer will have on the way to obtaining and using the offering. energy. and psychic. using. and disposing of the given market offering . time. including monetary.Value Proposition Consists of the whole cluster of benefits the company promises to deliver. .

A seller who is at a customer perceived value disadvantage has Increase customer perceived value Decrease total customer cost Philosophy of High customer satisfaction subject to delivering acceptable levels of satisfaction to other stakeholders and total resources. .Seller must access the Total customer value and Total customer cost associated with competitor‟s offerings to understand how his offer rates in the buyer‟s mind.

. Buys more of companies new products .Customer Loyalty Commitment to re-buy a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behaviour. Talks favorably about the company and pay less attention to competing brands and less sensitive to price. and upgraded products. A highly satisfied customer becomes a loyal customer.

Accountable Marketing 4. 2.Investment in Building Loyalty Cost should not exceed gains Levels of investment in building loyalty 1. Proactive Marketing 5. Basic Marketing. . Partnership Marketing Markets with few customers and high profile margins. Reactive Marketing 3. most sellers will move towards partnership marketing.

 One may be easily satisfied most of the time and the other might be hard to satisfy but on this occasion satisfied.Link Between Customer Satisfaction and Loyalty not Proportional Customer satisfaction rated on 1 to 5 scale.repurchase and even good word about the company.low level satisfactionabandon the company and even badmouth. after sales service etc. creates an emotional bond „Highly satisfied‟ for different reasons. product performance. 1.  Delivery. 2-4 fairly satisfied – chances to switch to better offer if there 5 High satisfaction/delight. .

Satisfaction on product and quality Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Customer Profitability Revenue generated from a customer over time .(Cost incurred in attracting. . Delivered a quality product when customers‟ expectations are just met or exceeded. selling and servicing the customer) Customer Life time Value Describes the net present value of the stream of future profits expected over the customer‟s lifetime purchase.

Value Equity -Sub driver are quality.Customer Equity Is the total of the discounted life time values of all the firm‟s customers. . community building programs and knowledge building programs. customer awareness. Brand Equity -Customer brand awareness.higher the customer equity. Relationship Equity – Loyalty programs. special recognition and treatment programs. and customer perception of brand ethics. More loyal the customers . customer attitude towards the brand. price and convenience.

Reflect. Customer Migration Market.Mass customization Is the ability of a company to meet each customer‟s requirements-to prepare on a mass basis individually designed products .services. Eg: Nike shoes. programs. Permanent Capture Market 2. and communications. Markets divided on the basis of customer defection 1. Simple Retention Market P & G‟s website. .

Methods of Measuring Customer Satisfaction Periodic surveys Can track customer satisfaction directly. Monitoring customer loss rate Contacting customers who have stopped buying or switched to other suppliers. . Additional questions to measure repurchase intention and the willingness to recommend the company and brand to others. Do it in TV shops. You can pair up. Cloth shops etc. Mystery Shoppers Exercise Pose as a potential buyer and report on the strong and weak points experienced in buying the company’s and competitor’s product. Be ready for discussion in the class.

Customer Satisfaction Satisfaction depends upon the offer‟s performance in relation to the buyer‟s expectation. Performance < Expectations = Dissatisfaction. Performance = Expectations = Satisfaction Performance > Expectations = Highly Satisfied or Delighted . Satisfaction is a person‟s feelings of pleasure or disappointment resulting from comparing a product‟s perceived performance ( or out come) in relation to his expectations.

Databases and Database Marketing .

) current contacts. Accumulated through customer transactions. telephonic queries etc.Databases and Database Marketing Customer database: Is an organized collection of information about individual customers or prospects . . registration information. hobbies etc. competitive suppliers etc. demographics. buyer teams member names ( ages. mediagraphics and other useful information. past volumes. Contains customer‟s past purchases. prices and profits . Business Database: Contains business customers‟ past purchases. psychographics. birthdays.

. To deepen customer loyalty To reactivate customer purchases To avoid serious customer mistakes. resellers) for the purpose of contacting.Database Marketing: Is the process of building. Uses of databases  To identify prospects To decide which customer should receive a particular offer. maintaining and using customer databases and other databases (product. transacting and building customer relationships. suppliers.

Marketing Management Process .

. and managing the marketing effort.Marketing Management Process The process of analyzing marketing opportunities. Strategic plan defines the company’s overall mission and objectives. developing the marketing mix. selecting target markets.

Marketing Management Process Marketing Channel Suppliers Target Consumers Publics Factors Influencing Company Marketing Strategy Competitors .

and behavioural factors (purchase occasions.1. lifestyle). psychographic factors (social classes. . usage rates). Market segment: A group of consumers who respond in a similar way to a given set of marketing stimuli. Consumers can be grouped based on geographic factors. characteristics. or behaviour.Target Consumers Market Segmentation: The process of classifying customers into groups with different needs.

Market Positioning: Arranging for a product to occupy a clear . Eg: “Quality is job one” Ford.Market Targeting: The process of evaluating each market segment‟s attractiveness and selecting one or more segments to enter. and desirable place relative to competing products in the minds of the target consumers. distinctive. Eg: General Motors. . A large company may offer a complete range of products to serve all market segments. “Engineered like no other car in the world” Mercedes Benz. A product‟s position is the place the product occupies relative to competitors in the consumer‟s mind.

Place . Price. The set of controllable marketing variables that the firm blends to produce the response it wants in the target market. .Promotion.Marketing Mix After decided on the positioning strategy. company has to get ready for planning the Marketing Mix. “Four P‟s” – Product .2. Mix consists of everything the firm can do to influence the demand for its product.

.The four P‟s of the Marketing Mix Product Target Market Place Price Promotion Target Market A set of buyers sharing common needs or characteristics that the company decides to serve.

Product Quality Features Options Style Brand Name Packaging Sizes Services Warranties Returns .

Price List Price Discounts Allowances Payment Period Credit terms Place Channels Coverage Locations Inventory Transport Promotion Advertising Personal Selling Sales Promotion Publicity .

Managing the Marketing Effort The company want to design and put into action the marketing mix that will best achieve its objectives in its target markets. Market Implementation and Market Control. Market Planning. Involves four Marketing Management functions: Market Analysis.3. .

Different and detailed marketing plan is needed for each business. or brand. product. 3b. Analyze company strengths and weaknesses. .Marketing Planning Deciding on the marketing strategies that will help the company to attain the strategic objectives. Feeds information and inputs to the other marketing management functions. Marketing Analysis Company must analyze its markets and marketing environment to find out opportunities and to avoid environmental threats.3a.

Marketing Management Process Marketing Channel Suppliers Target Consumers Publics Factors Influencing Company Marketing Strategy Competitors .

Outlines the entire plan and the operational detail. costs. competitors and other forces in the macro environment. Contents of a marketing plan Executive summary and table of contents Brief summary of the main goals and recommendations. the market.Marketing Plan A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. . Situation analysis Relevant background data on sales.

How the market defined?. how fast it is growing? The trends? All info is used to carry out a SWOT analysis. marketing mix. how big it is?. and marketing expenditure level. . Defines the targeted group and their needs. Specific strategies for target markets. The product manager defines the mission and marketing and financial objectives. The “game plan” for attaining the objectives. Marketing Strategy Is the logic by which the business unit hopes to achieve its marketing objectives.

Financial Projections Sales forecast. corrective action. . Forecasted sales with volume by month and product category. Implementation Controls Monitoring and adjusting implementation of the plan. and break-even analysis. an expense forecast. Goals and budget set for each month.

where. .3c. who. 3d Marketing Control Measuring and evaluating the results of marketing strategies and plans. Ensure that marketing objectives are attained. making corrective actions.Marketing Implementation The process that turns marketing strategies and plans into marketing action in order to accomplish strategic marketing objectives. Effectively put the marketing plan to work on day to day or month to month activities. and how. Addresses when.

4. Company should consider the entire marketing environment when developing and positioning its offer to the target market. Includes forces that affects the companies ability to serve its consumers like company departments .suppliers competitors. and publics. channel members .The Marketing Environment Analyze the environment to avoid the threats and take advantage of opportunities. .

Marketing Management Process Marketing Channel Suppliers Target Consumers Publics Factors Influencing Company Marketing Strategy Competitors .

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