1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Adapting Marketing to the...

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1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy

Major Drivers of the New Economy– Digitalization and ConnectivityDigitalization and Connectivity– Disintermediation and Disintermediation and

ReintermediationReintermediation– Customization and Customization and

CustomerizationCustomerization– Industry ConvergenceIndustry Convergence

1-2Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Table 2-1: Old Economy vs. New Economy

Old Economy New Economy

Organize by product units

Focus on profitable transactions

Look primarily at financial scorecard

Focus on shareholders

Marketing does the marketing

Build brands through advertising

Focus on customer acquisition

No customer satisfaction measurement

Overpromise, underdeliver

Organize by customer segments

Focus on customer lifetime value

Look also at marketing scorecard

Focus on stakeholders

Everyone does the marketing

Build brands through behavior

Focus on customer retention and growth

Measure customer satisfaction and retention rate

Underpromise, overdeliver

1-3Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Figure 2-1: The Supplier-Customer Relationship: Traditional and New Economy Structures

1-4Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy

How Marketing Practices are Changing: Customer Relationship Marketing– Reduce rate of customer defection– Increase longevity of customer relationship– Enhance growth potential through cross-

selling and up-selling– Make low profit customers more profitable

or terminate them– Focus disproportionate effort on high value

customers

1-5Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Mass Marketing vs. One-to-One MarketingMass Marketing vs. One-to-One Marketing

Mass Marketing One-to-One Marketing

Average customer

Customer anonymity

Standard product

Mass production

Mass distribution

Mass advertising

Mass promotion

One-way message

Economies of scale

Share of market

All customers

Customer attraction

Individual customer

Customer profile

Customized market offering

Customized production

Individualized distribution

Individualized message

Individualized incentives

Two-way messages

Economies of scope

Share of customer

Profitable customers

Customer retention

1-6Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy

Four steps for One-to-One MarketingFour steps for One-to-One Marketing

Don’t go after everyone, identify prospects.

Define customers by their needs and their value to the company.

Individual interaction with customers builds stronger relationships.

Customize messages, services, and products for each customer.

1-7Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

PERSONAL SELLING IN INFORMATION AGE

INDUSTRIAL--1950sINDUSTRIAL--1950s

INFORMATION--PRESENTINFORMATION--PRESENT

Evolution from industrial to information economy

1-8Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

SHIFT TO INFORMATION ECONOMY

Advances in transport and manufacturingStrategic resources are capital and natural resourcesProducts and factories define the businessSales success means meeting quotas

Advances in information technologyStrategic resource is information

Business defined by customer relationsSales success depends on adding value

INDUSTRIAL INFORMATION

1-9Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

EVOLUTION OF PERSONAL SELLING

MARKETING ERA 1950s CONSULTATIVE SELLING ERA 1960s-1970s STRATEGIC SELLING ERA 1980s PARTNERING ERA 1990s-Present

1-10Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

MARKETING AND CONSULTATIVE ERAS

MARKETING – Sales team as source of strategic Sales team as source of strategic

information on…product--market--information on…product--market--serviceservice

CONSULTATIVE– Emphasis on need identificationEmphasis on need identification– Transactional sellingTransactional selling– Information sharing & negotiation Information sharing & negotiation

replace manipulationreplace manipulation

1-11Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

STRATEGIC AND PARTNERING ERAS

STRATEGIC – Emphasis on strategic market plan Emphasis on strategic market plan – Tactics to achieve strategic planTactics to achieve strategic plan– Product positioning vital Product positioning vital

PARTNERING– Customer, not product, as driving Customer, not product, as driving

forceforce– Emphasis on strategies that create Emphasis on strategies that create

customer valuecustomer value

1-12Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

PERSONAL SELLING:DEFINITION

PERSON-TO-PERSON COMMUNICATION WITH PROSPECT

– DEVELOPING RELATIONSHIPS– DISCOVERING NEEDS– MATCHING PRODUCTS WITH NEEDS– COMMUNICATION OF BENEFITS– A PROCESS THAT ADDS VALUE

1-13Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

SELLINSELLING G

MODELMODEL

1-14Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

INTERRELATIONSHIP OF BASIC STRATEGIES

1-15Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

EFFECTIVE EFFECTIVE RELATIONSHIP STRATEGY RELATIONSHIP STRATEGY

FOUR KEY GROUPS FOUR KEY GROUPS

1-16Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

E-COMMERCE AND COMPLEX SALE

Complex sales involve several forms of information technology

supportTools include:– electronic product catalogselectronic product catalogs– contact management systemscontact management systems– Internet applicationsInternet applications– presentation packages like this onepresentation packages like this one

1-17Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

VALUE CREATION

Value = creative improvements enhancing customer experience Consumer economy rewards sales people who add value at each stepWhen customer not aware of value added by salespeople – focus may shift to price

1-18Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

RELATIONSHIPS ADD RELATIONSHIPS ADD VALUEVALUE

Customers perceive value added when they feel comfortable with salespersonCertain salesperson traits help create perception of value– AccountabilityAccountability– HonestyHonesty– Sincere concern for customer welfareSincere concern for customer welfare

1-19Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

WIN-WIN PHILOSOPHYWIN-WIN PHILOSOPHY

CUSTOMER SATISFACTION PRIMARY

FIRST STEP IN DEVELOPMENT OF RELATIONSHIP STRATEGY

BOTH PARTIES EXIT SALE FEELING SATISFIED

1-20Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

WIN-WIN vs. WIN-LOSEWIN-WIN vs. WIN-LOSEWIN-WIN TYPES

-- Help others solve their problems

-- Fix what caused the problem

-- Make life joyous for all concerned

-- Learn from past, live in present, set future goals

-- Honor commitments

WIN-LOSE TYPES -- See a problem in

every solution-- Fix the blame

-- Let life happen, are not proactive

-- Live in the past

-- Make promises they never keep

1-21Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

CHARACTER AND CHARACTER AND INTEGRITYINTEGRITY

Character includes high personal standards, integrity, honesty, and moral fiber

Integrity involves achieving congruence between what you know, say, and do

1-22Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

CUSTOMER RELATIONSHIP CUSTOMER RELATIONSHIP MANAGEMENT CRM - MANAGEMENT CRM -

SOFTWARESOFTWARE

CRM enhances relationship qualityPromotes rapid and effective client communication Written records help avoid miscommunication

1-23Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

EVOLUTION OF PARTNERING

Buzzword of 1990s, business reality in 2000s“Strategically developed long-term relationship that solves customer’s problems”Relationship selling relies on customized approach to each clientEnhanced with high ethical standards and sales automation

1-24Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com

PARTNERING—HIGHEST PARTNERING—HIGHEST FORMFORM

Strategically developed high quality, long-term relationship focusing on solving customer problems

Must be viewed as process, not an event