1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected] Adapting Marketing to the...

1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]

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


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


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



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


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



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.


PERSONAL SELLING IN INFORMATION AGE

INDUSTRIAL--1950sINDUSTRIAL--1950s

INFORMATION--PRESENTINFORMATION--PRESENT

Evolution from industrial to information economy


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


EVOLUTION OF PERSONAL SELLING

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


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


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


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


SELLINSELLING G

MODELMODEL


INTERRELATIONSHIP OF BASIC STRATEGIES


EFFECTIVE EFFECTIVE RELATIONSHIP STRATEGY RELATIONSHIP STRATEGY

FOUR KEY GROUPS FOUR KEY GROUPS


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


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


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


WIN-WIN PHILOSOPHYWIN-WIN PHILOSOPHY

CUSTOMER SATISFACTION PRIMARY

FIRST STEP IN DEVELOPMENT OF RELATIONSHIP STRATEGY

BOTH PARTIES EXIT SALE FEELING SATISFIED


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


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


CUSTOMER RELATIONSHIP CUSTOMER RELATIONSHIP MANAGEMENT CRM - MANAGEMENT CRM -

SOFTWARESOFTWARE

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


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


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

1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected] Adapting Marketing to the...

Documents

Transcript of 1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected] Adapting Marketing to the...