Metamarkets:Metamarkets: Markets in the Minds of the Markets in the Minds of the CustomerCustomer

Customers think of Customers think of activitiesactivities,firms think of ,firms think of productsproducts

e.g. The Home Ownership Experiencee.g. The Home Ownership Experience

Customers think ofCustomers think of logically relatedlogically related activity clusteractivity cluster

*Buying and financing a home*Buying and financing a home*Repair and Maintenance*Repair and Maintenance

•Home ImprovementHome Improvement

Home Ownership MetamarketHome Ownership Metamarket

Real Estate AgentsReal Estate Agents

BuildersBuilders

Municipal CorporationsMunicipal Corporations

Electricity CosElectricity Cos

PlumbersPlumbers

ElectriciansElectricians

Lawncare Service ProvidersLawncare Service Providers

ArchitectsArchitects

Interior DesignersInterior Designers

MetamarketsMetamarkets

Around major life events:Around major life events:WeddingWedding

ChildbirthChildbirth

EducationEducation

Career ChangesCareer Changes

RetirementRetirement

Around Major AssetsAround Major AssetsHome OwnershipHome Ownership

Automobile OwenershipAutomobile Owenership

Financial AssetsFinancial Assets

MetamediariesMetamediaries

Trusted Trusted third partiesthird parties that provide a that provide a single point of contact single point of contact betweenbetween

A community of customersA community of customers

AndAnd

A community of sellers in a marketplaceA community of sellers in a marketplace

Marketer and ProspectMarketer and Prospect

A marketer seeks a A marketer seeks a response response from a prospectfrom a prospect

Response could be in several forms:Response could be in several forms:

– PurchasePurchase

– VoteVote

– Expression of InterestExpression of Interest

– ContributionContribution

Needs,Wants and DemandsNeeds,Wants and Demands

Needs: Needs:

Basic Human RequirementsBasic Human RequirementsFoodFoodAirAirClothingClothingShelterShelterRecreationRecreationEducationEducationEntertainmentEntertainment

WantsWants

Needs directed to Needs directed to specific objects specific objects that that satisfy the needssatisfy the needs

An American and an Indian: Both need An American and an Indian: Both need food. American wants hamburger,Indian food. American wants hamburger,Indian wants rotiwants roti

Wants are Wants are shaped by one’s societyshaped by one’s society

DemandsDemands

Wants for specific products Wants for specific products backed by backed by ability to payability to pay

Point to RememberPoint to Remember

Marketers do not create needs,Marketers do not create needs,

They influence wantsThey influence wants

Value PropositionValue Proposition

Set of Benefits Set of Benefits offered by marketersoffered by marketers to to customers to satisfy their needscustomers to satisfy their needs

India-An attractive value proposition for India-An attractive value proposition for outsourceresoutsourceres

Set of Benefits:Set of Benefits:

Reduction of process costs by 40-60%Reduction of process costs by 40-60%

Abundant supply of qualified workforceAbundant supply of qualified workforce

Good English speaking skillsGood English speaking skills

Lower Establishment CostsLower Establishment Costs

Improving Telecom InfrastructureImproving Telecom Infrastructure

Government support for IT/ITESGovernment support for IT/ITES

Market OfferingMarket Offering

Value Proposition is not concreteValue Proposition is not concrete

Market Offering: A Tangible offer from a Market Offering: A Tangible offer from a companycompany

Combination of:Combination of:ProductProductAnd/or ServiceAnd/or ServiceInformationInformationExperienceExperience

BrandBrand

Offering from a Offering from a known sourceknown source

is a is a

NameName

TermTerm

DesignDesign

SymbolSymbol

Any other FeatureAny other Feature

That That identifiesidentifies one sellers’ goods and services as one sellers’ goods and services as distinctdistinct from from othersothers

Fundamentals of Customer ValueFundamentals of Customer Value

What customers care about?What customers care about?

What Vale Proposition appeals to them?What Vale Proposition appeals to them?

Value-The Dictionary MeaningValue-The Dictionary Meaning

““Worth” in usefulness or importance to the Worth” in usefulness or importance to the possessor”possessor”

Value…An assessmentValue…An assessment

An assessment of:An assessment of:

ALL THAT YOU GETALL THAT YOU GET

In return forIn return for

ALL THAT YOU GIVEALL THAT YOU GIVE

In an exchangeIn an exchange

Value….A better DefinitionValue….A better Definition

Perceived Worth Perceived Worth of a set of benefits of a set of benefits received in exchange for the received in exchange for the Total Cost Total Cost of of an offering,taking into consideration an offering,taking into consideration available available competing competing offerings and pricesofferings and prices

A new BMW buyerA new BMW buyer

What does she getWhat does she get

Benefits from the ProductBenefits from the Product

PerformancePerformance

ComfortComfort

SafetySafety

Benefits from ServiceBenefits from Service

FinancingFinancing

WarrantyWarranty

RepairsRepairs

Scheduled MaintenanceScheduled Maintenance

Roadside AssistanceRoadside Assistance

Emotional Benefits: Emotional Benefits: Social statusSocial status

A new BMW buyerA new BMW buyer

What does she give?What does she give?

Involvement in time,money,efforts in follwing activitiesInvolvement in time,money,efforts in follwing activities

Searching for right carSearching for right car

Searching for right dealerSearching for right dealer

Negotiating dealNegotiating deal

Arranging for FinanceArranging for Finance

Maintaining car over lifetimeMaintaining car over lifetime

Customer Value for a new BMW buyerCustomer Value for a new BMW buyer

Customer will assess these benefits Customer will assess these benefits

Weighed by Weighed by ImportanceImportance she gives to these benefits she gives to these benefits

Compared with Compared with Total Cost of buying and owning the carTotal Cost of buying and owning the car

Assessment of Value affected by:Assessment of Value affected by:

Other new cars in considerationOther new cars in consideration

Currently owned carCurrently owned car

Alternatives of public transportationAlternatives of public transportation

ExchangeExchange

Process of obtaining desired product from Process of obtaining desired product from someone by offering something in returnsomeone by offering something in return

Is a Value-creating processIs a Value-creating process

Exchange….Five ConditionsExchange….Five Conditions

At least two partiesAt least two parties

Each has something of Value to the otherEach has something of Value to the other

Each is capable of communicating and deliveryEach is capable of communicating and delivery

Each free to accept or reject the offerEach free to accept or reject the offer

Each believe it is appropriate/desirable to deal Each believe it is appropriate/desirable to deal with third partywith third party

TransactionTransaction

Said to take place when an exchange Said to take place when an exchange actually happensactually happens

An exchange where the two parties agree An exchange where the two parties agree upon terms and there is a upon terms and there is a trade of valuestrade of values

BarterBarter

Transaction involving trading of goods and Transaction involving trading of goods and services for other goods and servicesservices for other goods and services

Transaction-Several DimensionsTransaction-Several Dimensions

Agreed-upon ConditionsAgreed-upon Conditions

Time of AgreementTime of Agreement

Place of AgreementPlace of Agreement

TransferTransfer

Giver does not receive any tangible Giver does not receive any tangible returns:returns:

GiftsGifts

SubsidiesSubsidies

Charitable ContributionsCharitable Contributions

A marketer seeks responseA marketer seeks response

Behavioural Response from a prospect:Behavioural Response from a prospect:

An educational institute seeks enrolmentAn educational institute seeks enrolment

A business firm seeks purchaseA business firm seeks purchase

A political candidate seeks voteA political candidate seeks vote

Two-Way Exchange MapTwo-Way Exchange Map

Student Want List1. High Quality Faculty2.Contemporary course

Content3. Quality Physical

Infrastructure4. Placement Assistance

Amplify(Marketer)

Student(Prospect)

Amplify Want List1. Good Price

for services delivered2.On-time payment

3. Good WOM

Stages of the Exchange ProcessStages of the Exchange Process

Offer from Marketer to prospect

Analysis of others’ needs

Counteroffer from Prospect to marketer

ExchangeSuccessful

Exchange Unsuccessful

If there is agreement on T & C

If there is no agreement on

T & C

Relationship MarketingRelationship Marketing

Business Philosophy Business Philosophy which aims to develop which aims to develop strong relationships with a range of strong relationships with a range of stakeholders:stakeholders:

CustomersCustomers

SuppliersSuppliers

IntermediariesIntermediaries

Public OrganizationsPublic Organizations

Relationship CapitalRelationship Capital

Relationships are the new capitalRelationships are the new capital

Relationship Capital drives market valueRelationship Capital drives market value

Winning companies build relationship capitalWinning companies build relationship capital

Relationships Matter more than everRelationships Matter more than ever

Partner RelationshipsPartner Relationships

As transaction costs decrease, firms will As transaction costs decrease, firms will outsource more of their non core activitiesoutsource more of their non core activities

The core of the firm will shrink,while the The core of the firm will shrink,while the periphery will expandperiphery will expand

Relationships matter more than everRelationships matter more than ever

Customer RelationshipsCustomer Relationships

As markets saturate and new customers become As markets saturate and new customers become scarce,firms will need toscarce,firms will need to

Retain existing customers Retain existing customers more aggressivelymore aggressively

Generate more revenues Generate more revenues from each customerfrom each customer

Relationships matter more than everRelationships matter more than ever

Employee RelationshipsEmployee Relationships

To win the “war for talent”, firms will need to:To win the “war for talent”, firms will need to:

AttractAttract and and RetainRetain the best employees the best employees

Improve the Improve the productivity productivity of their employeesof their employees