MBA 4th Sem Marketing Managment

8/6/2019 MBA 4th Sem Marketing Managment

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Master of Business Administration MBA Semester 4

Subject: Marketing Management

Subject code: Mk0006

Services Marketing and Customer Relationship Management


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Assignment Set 1

Q.1 Mention the different types of services with few examples and briefly give a note on

service sector.

Ans.: Different types of services:

The underlying objective in any service classification scheme is to get a deeper understanding of

the service product. Despite the diversity in the range of service products, it is possible to

classify and explore them on the basis of certain factors.

There have been more than sixteen studies regarding the classification schemes.Naturally, some are worthwhile in developing marketing strategies, with others suffer

shortcomings. Christopher Lovelock identifies certain issues as important in theclassification of services. He points out that:

a) Service industries continue to be dominated by operations, with the service managers

insisting that their tasks and challenges in their industry are unique and have nothing in

common with those from other service industries.

b) A managerial mind set evident in many service argues that the marketing of a service industry

has nothing in common with the marketing of another service industry. For example, the

marketing of an airline service has nothing in common with marketing of a banking service or a

financial service.

c) Classification schemes should offer strategic marketing insights so as to have managerial

value. Any other simple classification would be insufficient.

Payne identifies a wide range of factors, which are used in various classification schemes. They

are:

a) Type of services,

b) Type of seller,

c) Type of purchaser,


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d) Demand characteristics,

e) Rented versus owned services,

f) Degree of intangibility,

g) Buying motives,

h) Equipment based versus people based,

i) Amount of customer contact,

j) Service delivery requirements,

k) Degree of customization and

l) Degree of labour intensity.

A simple form of classification is to list out the service industries, like transpiration,banking, health care, education etc. Obviously, such listing is not helpful to identify the

features relevant to the marketing of services. Recent researchers have sought to classifythe service in a more meaningful manner that gives insight into the strategic dimensions

of service marketing.

Various classification schemes, clubbing various groups of services that share marketingcommonalties, rely on good marketers to gain strategic marketing insights. The

underlying aim for such classification scheme is to gain a deeper understanding of theservice product. Service products are education, legal services, management constancy,

accounting travels etc., In spite of such diversities, the services can be classified and onthe basis of some criteria they can be explored to provide a deeper insight into the nature

of services.

Service Sector:

The American Marketing Association defines services as activities, benefits or

satisfactions, which are offered for sale and are provided with the sale of goods. Thisdefinition is considered to be too broad as products also offer benefits and satisfaction to

customers. So, there were attempts to differentiate physical products from services bydefining characteristics, which are present in service but are not found in case of

products.

Kotler defines a service as any act or performance that one party can offer to another

that is essentially intangible and not results in the ownership of anything. Its productionsmay or may not be same to a physical product. Adrian Payne defines it as an activity

which has some intangibility associated with it, which involves some interaction withproperty with it, which involves some interaction with customers or with property in their

possession, and does not result in a transfer of ownership. A change in condition may


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occur and production of the service may or may not be closely associated with a physicalproduct.

A more mundane definition in the Indian context is provided by section 2 (r) of the

Monopolies and Restrictive Trade Practices Act, 1969. Under the said statute a service

means service which is made available to potential users and includes the provision offacilities in connection with banking, financing, insurance, chit fund, real estate,transport, processing, supply of electrical or other energy, board or loading or both,

entertainment, amusement or the purveying of news or other information.

Stanton defines services and identifies factors, which distinguish products from services,which are accepted by most of the commentators. According to Stanton Services are

those separately identifiable, essentially intangible activities that provide want-satisfaction, and that are not necessarily tied to the sale of a product or another service.

To produce a service may or may not require the use of tangible. However, when suchuse is required, there is no transfer of the title (Permanent ownership) to these tangible

which distinguish goods. Stanton emphasizes four characteristics, which distinguishservice from products. They are, intangibility, inseparability, heterogeneity and

penetrability and fluctuating demand. Kotler also emphasizes on intangibility, variabilityand perishability.

A service is an activity which has some element of intangibility associated with it, whichinvolves some interaction with customers or with property in their possession, and does

not result in a transfer of ownership. A change in condition may occur and production ofthe service may or may not be closely associated with a physical product.

Q.2 According to you, what are the customer expectations and customer responses if they

dont receive the desired service quality? If you were the service provider, how would you

address customer complaints and conflicts?

Ans.: Customer Expectation ofservices

Companies often have different perspectives on customer service. These include:

All the activities required to accept process, deliver and fulfill customer orders and to follow up

on any activity that has gone wrong.

Timeliness and reliability of delivering products and services to customers in accordance with

their expectations.


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A complex of activities involving all area of the business which combine to deliver the

companys products and services in a fashion that is perceived as satisfactory by the customer

and which advances the companys objectives.

Total order entry and all communications with customers, all invoicing and total control of

defects.

Timely and accurate delivery of products and services ordered by customers with accurate

follow up and enquiry response including timely delivery of invoice.

These alternative views illustrate the extent to which the meaning of customer service varies

considerably from one company to another.

The more pragmatic view of customer service is broader than any of these definitions and that it

is concerned with the building of bonds with customers and other markets or groups to ensure

long-term relationships of mutual advantage, which reinforce the other marketing, mix

elements. Customer service can thus be seen as an activity, which provides time, and placeutilities for the customer and which also involves pre transaction and post-transaction

considerations relating to the exchange process with the customer.

Customer Responses:

Quality can be viewed from two perspectives internal and external. Internal quality is based on

conformance to specifications. External quality is based on relative customer perceived quality.

It is essential that quality is measured from the customer perspective, not from what managers

within a company think their customer views are!

Parasuraman and his colleagues have developed a model, which helps to identify the gaps

between the perceived service qualities, that customers receive and what they expect. The

model identifies five gaps: 1. Consumer expectation management perception gap.

2. Management perception service quality expectation gap.

3. Service quality specifications service delivery gap.

4. Service delivery external communications to consumers gap.

5. Expected service perceived service gap.

Customer complaints, conflicts andsolution:

Addressing customer complaints are part of running anybusiness. No matter howsuccessful your business is, you will occasionally deal with a dissatisfied customer.

Rather than viewing a complainer as a nuisance, look at his complaint as an opportunity


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to learn how to improve your product or service. Be open to hearing what he has to sayand be proactive in your response.

1 Have an action plan for customer complaints. When a customer complains, what she is really

doing is telling you how you can improve your service. Have a system in place so customer-

service employees can document complaints. Create a customer-grievance form youremployees can fill out when a customer is unhappy. Management should collect the grievance

forms periodically and review them to identify recurring complaints.

2 Survey all customers for feedback on their buying experience. There are a number of ways to

do this. You can have survey forms that can be filled out and dropped in a container. Or you can

hand customers a survey form as they leave the store, offering incentives such as a 10 percent

discount if they bring or mail it back. You could also have an online survey that offers a printable

store coupon when completed. Your survey form can be as simple as the customer choosing a

level of satisfaction from one to five in any given area of service, but leave space for additional

comments.

3 Make adjustments based on customer feedback and complaints. Knowing what customers are

complaining about will not help you reduce complaints unless you are willing to make changes.

Have a brainstorming session with managers and employees to see what changes can be made

to prevent customers dissatisfaction.

4 Train employees to provide excellent service. A well-treated customer is less likely to complain

than a poorly treated one. The last thing a business owner wants is to have a customer become

frustrated by a rude employee. Employees should be trained to treat customers with excellence

and be given some leeway in their ability to address customer needs.

Examples of Preventive Customer Complaint Management Initiatives at Individual Businesses:

A pizza chain widely advertises that when its pizzas do not arrive within a certain time the pizza

is free. By establishing an up-front policy about delivery and offering clear. Compensation for

when the commitment is not met, customers have an assured outcome (Either pizza on time or

free pizza). Customers know in advance what to expect so complaints are minimal, and the on

time or free policy becomes an important competitive advantage.


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Q.3. Construct a service gap for an imaginary service based company assuming that

there are several gaps found in its functioning.

Ans.: Suppose there are five gaps:

1. Consumer expectation management perception gap.

2. Management perception service quality expectation gap.

3. Service quality specifications service delivery gap.

4. Service delivery external communications to consumers gap.

5. Expected service perceived service gap.

Gap 5 is the service quality shortfall as seen by the customers, and gaps 1-4 are shortfalls

within the service organization. Thus gaps 1-4 contribute to gap 5.

These gaps are given in the following figure.


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Q.4. Explain the concept ofservice design andservice delivery inservicesmarketing.

Ans.: Service Design:

Service Design is the activity of planning and organizing people, infrastructure,communication and material components of a service, in order to improve its quality, the

interaction between service provider and customers and the customer's experience. Forexample, a restaurant may choose to have a Service Design agency change the way its


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menu is set out, or change the layout of the restaurant to improve the customer'sexperience. Customers can mean paying patrons, but also can be within an organization,

so long as they are the direct recipients of a service e.g. an organization implements anew payroll interface for its staff - therefore the staff are effectively 'customers' of the

payroll interface. To do this, Service Design methodologies are used to plan and organize

people, infrastructure, communication and material components used in a service. Theincreasing importance and size of the service sector, both in terms of people employedand economic importance, requires services to be accurately designed in order for service

providers to remain competitive and to continue to attract customers.

The design (or redesign) of a service may involve re-organizing the activities performedby the service provider (Back office), e.g. how letters from customers are processed

internally; and/or the redesign of interfaces and interactions that customers use to contactthe service provider (Front office) e.g. website, in person, telephone, blogs etc.

Service Design is increasingly used by blue-chip private and public sector organizations

as a means of creating the step change their customers require in terms of serviceexperience. Service Design agencies apply design tools, techniques and thinking to

service challenges, either to improve existing services or to create new ones. Typically,the work is based upon deep insights gathered by shadowing service users. This

technique produces more accurate insights into the usability of a service than traditionalremote surveys because what people say they do is frequently different to what they

actually do. Concepts and ideas generated are captured in sketches or in serviceprototypes. The strong visual element, combined with the opportunity to test and rapidly

change services and interfaces, delivers real value in today's competitive markets.

The active participation of customers and other actors traditionally considered as external

to a firms boundary emphasize the need for a proper design activity that organizes theinteraction among those actors, thus planning sequences of events, material and

information flows. Furthermore the involvement of non technical actors, such ascustomers, implies that the activity of service design be analyzed not only from a

functional perspective (with the aim of optimizing flows and resources and reducing timeof operations) but also from the emotional perspective (creating meaningful events,

motivating customers, communicating the service). Because of those considerationsservice design became the focus of studies and research in the discipline ofdesign,

initially as part of the activities related to web design and Interaction Design, and later asan autonomous professional and research area.

Service Delivery:

Positioning involves both launching new brands into the marketplace (new brandpositioning), and repositioning old brands. It is concerned with the differentiation of

products and service and ensuring that they do not degenerate into a commodity. Tomaximize its potential, a company should position itself in its core market segments,

whether it is objective or subjective, differentiated in a positive way over competingofferings.


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Positioning is particularly importance for services in the market. As a result ofcompetitive pressure, the huge offering of services within each market sector is

increasingly confusing the customer. These offerings are communicated by a vast numberof advertising messages promoting different features of the services. The key to a

successful positioning strategy is to promote the feature, which the company is best at,

and which exactly matches the needs of the customer.

Because of intangibility and other features associated with services, consumers find that

differentiation of services can be more difficult and complex. Successful positioningmakes it easier for the customer to see a company services as being different from others

and exactly what is wanted.

Positioning is a strategic marketing tool, which manages to determine what their positionis now, what they wish it to be and what actions are needed to attain it. It permits market

opportunities to be identified, by considering positions, which are not met bycompetitors products. It therefore, helps influence both product development and the

redesign of existing products. It also allows consideration of competitors possible movesand responses so that appropriate action can be taken. The concept is often considered at

the product level although it is also relevant at the market segment, the reason for buyingyour services and thus underlines the whole marketing strategy. It also offers guidelines

for development of a marketing mix with each element of it being consistent with thepositioning.

Q. 5 a. What isservices marketing? Explain its importance.

Ans: Service marketing and its important:

There are a number of marketing managements that have special significance for services

marketing. It is worth commenting on some of those aspects, as they are important indeveloping an awareness of problems and key issues in services marketing.

Productivity andQuality

In striving to gain and maintain competitive advantage, both productivity and quality are

of key importance. However, the nature of services implies that it is difficult to avoid atrade-off situation, when improvements in service productivity can lead to sacrifices in

the level of quality. This is most sensitive in productivity and can lead to sacrifices in thelevel of quality. This is most sensitive also in services marketing where people are the

service delivers. If a bank cashier or travel agent needs to process customers morequickly to improve productivity, how can organizations ensure that is no resulting drop in

quality?

The American Marketing Association defines services as activities, benefits or

satisfactions, which are offered for sale and are provided with the sale of goods. This


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definition is considered to be too broad as products also offer benefits and satisfaction tocustomers. So, there were attempts to differentiate physical products from services by

defining characteristics, which are present in service but are not found in case ofproducts.

Kotler defines a service as any act or performance that one party can offer to anotherthat is essentially intangible and not results in the ownership of anything. Its productionsmay or may not be same to a physical product. Adrian Payne defines it as an activity

which has some intangibility associated with it, which involves some interaction withproperty with it, which involves some interaction with customers or with property in their

possession, and does not result in a transfer of ownership. A change in condition mayoccur and production of the service may or may not be closely associated with a physical

product.

A more mundane definition in the Indian context is provided by section 2 (r) of theMonopolies and Restrictive Trade Practices Act, 1969. Under the said statute a service

means service which is made available to potential users and includes the provision offacilities in connection with banking, financing, insurance, chit fund, real estate,

transport, processing, supply of electrical or other energy, board or loading or both,entertainment, amusement or the purveying of news or other information.

Stanton defines services and identifies factors, which distinguish products from services,which are accepted by most of the commentators. According to Stanton Services are

those separately identifiable, essentially intangible activities that provide want-satisfaction, and that are not necessarily tied to the sale of a product or another service.

To produce a service may or may not require the use of tangible. However, when suchuse is required, there is no transfer of the title (Permanent ownership) to these tangible

which distinguish goods. Stanton emphasizes four characteristics, which distinguishservice from products. They are, intangibility, inseparability, heterogeneity and

penetrability and fluctuating demand. Kotler also emphasizes on intangibility, variabilityand perishability.

A service is an activity which has some element of intangibility associated with it, which

involves some interaction with customers or with property in their possession, and doesnot result in a transfer of ownership. A change in condition may occur and production of

the service may or may not be closely associated with a physical product.

Put in the simple terms, services are deeds, processes and performances. The coreofferings of hospitals, hotels, banks and utilities comprise primary deeds and actions

performed for customers. Services are produced not only by service business such asthose just described but are also integral to the offerings of many manufactured goodsprocedures. For example, car manufacturers offer warranties and repair services for their

cars, Computer manufactures offer warranties, maintenance contracts and training. All ofthese services are examples of deeds, processes and performances.


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b. Is there any need to segment services? Give reasons for your answer.

Ans.: Yes, service segmentation is especially important for services in the current

competitive marketplace. Service industries are suffering from increasing competition

both in the number of competitors and in the proliferation of service offerings. Market

segmentation helps prevent the waste of valuable resources by directing effort into thoseareas that will help achieve success.

Service products are frequently not clearly differentiated. Market segmentation offers theopportunity of gaining competitive advantage, in a highly contested market, through

differentiation. The market segmentation approach involves identification of the benefitswhich different homogeneous groups seek, allowing relevant features and requirements

to be determined and used as a source of service differentiation.

Different customers have different needs. A hotel, which aims to satisfy the prestige

executive market, needs to consider the specific requirements of this segment. These

might include full secretarial and office facilities, conference amenities, twenty-four hourcatering, a fitness facility and late check out options. Successful marketing identifiesspecific needs and preferences for services, and then develops strategies to satisfy these

preferences.

A single service or product cannot meet the needs of all customers, but it can meet theneeds of a specific group of customers. A service business should be positioned to serve

particular segments of the attractive parts of the market, so that it can serve themeffectively and produce the greatest profit.

The segmentation process, shown in the figure is concerned to divide a heterogeneous

process and follows four broad steps:

i) The definition of the market to be addressed.

ii) The identification of alternative bases for segmentation.

iii) An examination of these based and the choice of the best base or base for segmentation.

iv) The identification of individual market segments, an assessment of their attractiveness and

the selection of specific target market.

Once the market segment has been selected, the process of target marketing involves

developing a positioning for the target segments selected and then developing amarketing mix for each target market.


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Q. 6. Examine the recent issues inservices marketing.

Ans: Recent issues in marketing:

Service Marketing Management

There are a number of marketing managements that have special significance for services

marketing. It is worth commenting on some of those aspects, as they are important indeveloping an awareness of problems and key issues in services marketing.

Productivity andQuality

In striving to gain and maintain competitive advantage, both productivity and quality areof key importance. However, the nature of services implies that it is difficult to avoid a

trade-off situation, when improvements in service productivity can lead to sacrifices inthe level of quality. This is most sensitive in productivity and can lead to sacrifices in the

level of quality. This is most sensitive also in services marketing where people are theservice delivers. If a bank cashier or travel agent needs to process customers more


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quickly to improve productivity, how can organizations ensure that is no resulting drop inquality?

Service quality is measured on two levels:

Technical Quality the overall efficiency with which a bank handles its customeraccounts in terms of prompt statements, rates of interest offered and so on.

Functional Quality the way the service is actually delivered; this includes personal

courtesy, the service environment in terms of comfort and dcor, and the customers ownrole.

The importance, which is attached to functional and technical quality, depends on the

type of service, and the benefit sought by the consumer.

Services Marketing Triangle

A useful way to conceptualize the questions and decisions that need to be made is

presented in the services marketing triangle.

Company (Management)

The triangle suggests that there are three types of marketing that must be successfullycarried out in a service organization to succeed, and that all of them revolve around

making and keeping promises to customers.

On the right side of the triangle are the external marketing efforts that the firm engagesin, to set up its customers expectations and make promises to customers regarding what

is to be delivered. Anything that communicates to the customers before service deliverycan be viewed as part of this external marketing function. In service firms, there are many

factors that communicate to customers beyond the traditional elements of advertising,special promotions, sales, and public relations, for example, the firms personnel and the

physical facilities themselves.

On the bottom of the triangle is what has been termed interactive marketing, or what

some refer to as real-time marketing. Here the actual service delivery takes place-the


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firms employees interact directly with customers. It is at this point that the promise isdelivered or not delivered. Having a positive link between what is promised through the

external marketing in the world is useless if promises cannot be kept.

The left side of the triangle suggests the critical role played by internal marketing, which

enables employees to keep the promises that have been made to customers. Internalmarketing refers to the activities the firm must carryout; to train, motivate, and reward itsemployees. Unless service employees are able and willing to deliver on the promises

made, the firm will not be successful keeping its promises and the services marketingtriangle will collapse. Internal marketing hinges on the assumption that employee

satisfaction and customer satisfaction are inextricably linked.

What the triangle implies is that all three sides are critical to successful servicesmarketing and management. Without one of the sides in place in the triangle, the total

marketing effort cannot be supported. Each side represents significant challenges formost service businesses, and as we proceed through the text we will find approaches and

strategies for dealing with all three.

1) Marketing Implications

Intangibility presents several marketing challenges. Services cannot be inventories, and

therefore fluctuations in demand are often difficult to manage. For example, there istremendous demand for resort accommodations in Simla/Ooty in May, but little demand

in December. Yet resort owners have the same number of rooms to sell year-round.Services cannot be patented legally, and new service concepts can therefore be

communicated to competitors. Services cannot be readily displayed or easilycommunicated to customers, so quality may be difficult for consumers to assess.

Decisions about what to include in advertising and other promotional materials arechallenging, as is pricing. The actual cost of a unit of service is hard to determine and

the price/ quality relationship is complex.

2. Inseparability

Services are created and consumed simultaneously and generally they cannot be

separated from the provider of the service. The service provider customer interaction is aspecialty of service marketing.

Unlike the tangible goods, service cannot be distributed using conventional channels.

Inseparability makes direct sales as the only possible channel of distribution and thusdelimits the markets for the sellers services. This characteristic also limits the scale of

operation of the service provider. For example, a doctor can give treatment to limitednumber of patients only in a day.

This characteristic also emphasizes the importance of the quality provided to clients inservices. This poses another management challenge to the service marketer. For example,


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an airline company may provide excellent fight service, but a discourteous onboard staffmay keep the customer permanently off that company.

There are exemptions also to the inseparability characteristic. A television coverage,

travel agency or stock broker may represent and help marketing the service provided by

another service firm.

Marketing Implications

Because services often are produced and consumed at the same time, mass production isdifficult if not impossible. The quality of service and customer satisfaction will be highly

dependent on what happens in real time, including actions of employees and theinteractions between employees and customers.

3. Heterogeneity

This characteristic is referred to as variability by Kotler. We have already seen thatservices cannot be standardized. They are highly variable depending upon the provider,the time and place where they are provided. A service provided on a particular occasion

is somewhat different from the same service provided on other occasions. Also thestandard of quality perceived by different consumers may differ accordingly. For

example, the treatments given in a hospital to different persons on different occasionscannot similar. Consumers of services are aware of this variability and by their

interaction with other consumers they also get influenced or influence others in theselection of service provider.


The services are heterogeneous across time, organizations, and people ensuring consistentservice is fully controlled by the service supplier; such as the ability of the consumer to

articulate his or her needs, the ability and willingness of personnel to satisfy those needs,the presence (or absence) of other customers, and the level of demand for the services.

4. Perishability and Fluctuating Demand

Perishability refers to the fact that a seat in an airplane or in a restaurant, an hour of alawyers time, or telephone line capacity not used cannot be reclaimed and used or resold

at a later time. This is in contrast to goods that can be in inventory or resold another day,

or even returned if the consumer is unhappy.


A primary issue that marketers face in relation to service perishability is the inability to

inventory. Demand forecasting and creative planning for capacity utilization is thereforeimportant in challenging the decision areas. The fact that services cannot typically be

returned or resold also implies a need for strong recovery strategies when things do go


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wrong. For example, while a bad haircut cannot be returned, the hairdresser can andshould have strategies for recovering the customers goodwill if and when such a

problem occurs.

ASSIGNMENT SET-2

Q.1 Mention the 5 engines of e-CRM and explain the process involved.

Ans.: 5 engines of e-CRM:Properly configured, these five engines collectively form a

robust, scalable, and flexible platform for e-CRM. Prefabricated and custom-madesoftware can be seamlessly integrated into the platform to provide a virtual shopkeeper to

millions of customers. Equipped with such infrastructure, companies can continuallycreate significant customer value at Internet speed, automating the who, what, when,

where, and how of sales and marketing.

Engine 1: The Customer-centric Information Store

e-CRM initiatives depend on a 360-degree customer view. A Customer-centric

Information Store integrates data from disparate information sources such as web sites,transactional systems, operational databases, call centers, enterprise resource planning

systems, and third party data. This engine enables companies to recognize and respondaccurately to customers, whether they purchase products through a physical store;

telephone a call center; or browse a web site. Consequences of an incomplete customerview are often harsh. Presenting customers with inappropriate offers that dilute loyalty

and trust stall e-CRM efforts.

Developing a Customer-centric Information Store requires large-scale integration ofdisparate data from multiple sources. Three factors are critical to its success:

* Scalability: Companies tend to underestimate the volume of data that is required fordeveloping a comprehensive 360degree view of customers and visitors. Clickstream data

alone can consume several gigabytes every day. Transactional data, third party, and ERPdata add exponentially to the volume. Detailed, atomic level capture and retrieval of

every customer's profile, preferences, and transaction history places additional capacitydemands on the technology architecture. Companies must plan for terabyte-sized

Customer-centric Information Stores.

Flexibility: The Customer centric Information Store must accommodate multiple datamodels and database architectures and allow for integration with other back-end


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information systems. Without this flexibility, the usefulness of this engine will diminishover time. Customer information stores are dynamic, growing entities that have to keep

up with every customer's interaction with the company.

* High Performance: Speed and accuracy of access to customer-centric information is

essential for enabling a true value exchange with customers. Likewise, the ability toaggregate information at differing levels of abstraction (e.g., transaction, customer, andzip code) makes it possible to discern patterns of customer behavior (e.g., sizes of

clothing sold by zip code). In automotive engineering, sports car engines provide theability to drive at high speeds, turn around tight corners precisely, and deliver flawless

performance on bylines, country roads, or highways. Similarly, a high performanceCustomer-centric Information Store provides accurate information that can be captured in

any part of the information store at any level of granularity with maximum flexibility andresponsiveness to demand.

Engine 2: The AnalysisAnd Segmentation Engine

Building trusted customer relationships depends on accurate customer segmentation. TheAnalysis and Segmentation Engine performs business analysis, segmentation, and

prediction so that customer interactions take place in an appropriate and personalizedmanner. Without this engine, e-CRM lacks the intelligence to be effective--even if it has

massive volumes of customer-centric information.

There are three major categories of analysis and segmentation techniques: OnlineAnalytical Processing (OLAP), Data Mining, and Statistics. Briefly, OLAP tools perform

complex queries on a database, Data Mining tools discover unforeseen associations usingpattern-matching algorithms, and Statistical tools perform complex mathematical

operations on sets of data. Each technique has its strengths.

No one technique covers the gamut of e-CRM applications. E-CRM requires acombination of Statistics, Data Mining, and OLAP solutions to perform rapid, accurate,

and consistent customer segmentation. The new breed of analysis and segmentation isbuilt on iterative, "Collaborative" ROLAP (Relational OLAP) tools and ads the best

features of Statistical and Data Mining analysis techniques. Together, they iterate to afinal answer to analytical questions. E-CRM marketing campaigns are inherently iterative

since they require ad-hoc questions about customer preferences, demographics, andtransaction patterns. With Collaborative ROLAP, campaign formulation evolves through

experimentation and discovery. Iteration takes place between a server, where data isstored, and the "middle tier" applications that are used for complex analytical operations.

This approach is essential for extracting maximum benefit from an integrated Customer-centric Information Store. The hybrid will successfully hypothesize, target a sub-segmentof customers, and verify results.

Engine 3: The Personalization Engine


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New technology makes it possible to personalize products and services for large numbersof customers in a cost-effective manner by lowering the marginal cost of personalization.

Until now, personalized attention and service were labor intensive and not scalable toserve a large customer base without high costs. Naturally, most companies provide

personalized attention to a small group of selected clients who are "worth it." Today,

everyA

mazon.com customer gets personal recommendations for books--in large part dueto Amazon's personalization technology. The addition of thousands of customers toAmazon's base has a minimal marginal effect on their cost to sustain this high level of

service. This "scalable" personalization is unprecedented in business history.

Achieving this level of one-to-one service requires a robust Personalization Engine.Engine 3 identifies appropriate messages and offers necessary tools to create valued one-

to-one customer relationships with millions of customers. It builds customer profiles,enables customized products and services offerings, and fosters trusted relationships. The

Personalization Engine leverages the Customer-centric Information Store to provide a"virtual storekeeper" who knows each customer, looks out for their needs, and knows

when and how to reach them.

Classic approaches to personalization fall into three broad categories: Rules-based,Collaborative Filtering, and Inference Models. Customer Experience Personalization

(CEP) utilizes all three approaches in conjunction with large volumes of information tocreate a uniquely holistic experience for each individual customer.

CEP is proactive and data driven. For example, regular National Weather Service reportson pollen count could be used in conjunction with patient profiles to alert specific asthma

patients to renew their allergy medication. This is superior to personalization that solelyrelies on static information about customer transaction patterns. Customers and visitors

dislike information clutter. Given a chance, they will clearly indicate their preferences forthe type of information they like to receive, the periodicity of subsequent communication,

and the device for reaching them. This information is a powerful tool to enhance the levelof personalization of customer experience. For example, a bank to package news of an

impending rate hike can leverage a customers self-stated interest in receiving news onFederal interest rate changes with an offer for a low-interest credit card or home equity

loan. A good Personalization Engine should include a set of tools to create subscriptionservices and interfaces that provide "in-a-box" capability.

Engine 4: The Broadcast Engine

Continuous customer interaction and value exchange require 24/7 access to customers.

While the web is becoming increasingly pervasive, few customers are on-line all day.However, they are increasingly reachable through other communication devices. A recentMETA Group study projects that the average number of communication devices per

consumer will quadruple in the next three years.

Growing appetite for non-web communication is not just a consumer phenomenon, but abusiness shift, as well. Corporate use of wireless technology is increasing dramatically.


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Successful e-CRM requires an engine that reaches millions of customers wherever theyare: at home, via phone, or TV set-top box; at work; via e-mail; or on the road, via WAP

phone or pager. A scalable Broadcast Engine that is built on an open architecture andsupports all communication devices enables this level of customer interaction.

Engine 5: The Transaction Engine

An effective Transaction Engine promotes information exchange between every customer

and the enterprise. Like the small town shopkeeper who often conversed with hiscustomers and remembered significant details, the Transaction Engine maintains

customer contact and transmits information to the Customer-centric Information Store forlater use. Leveraging the other four e-CRM Engines, the Transaction Engine develops

informed lifelong customer relationships.

The Transaction Engine facilitates the value exchange and provides a single interface to

any set of information sources. The Transaction Engine also acts as a third-party purchase

facilitator for the consumer. The consumer provides relevant preferences via any deviceand the Transaction Engine vends the relevant information. Smart consumers wanttrustworthy product information before every potential purchase. To gain confidence in

their product purchases, customers will interact with many vendors to gather information,conduct comparative analysis, and then decide which products to buy. The Transaction

Engine promotes and ultimately brokers customer transactions.

The Transaction Engine manages the flow of information and services through eachcustomer device and provides appropriate value-added features and functionality. This is

achieved by integrating closely with the Broadcasting and Personalization Engines.

Companies will have billions of interactive customer contacts a year. They have to avoidinundating customers with unwanted information and services. Through the utilization of

subscription methods (via web, wireless, or voice) customers can sign up for uniqueinteractive information services based on their own preferences. The Transaction Engine

performs this function, keeps track of the customer subscriptions, and uses thisinformation to initiate interactions with individual customers.

Q.2 Explain the concepts of customer retention and Customer lifetime value with its

applicable strategies.

Ans.: Customer Retention:Customer Retention is the activity that a selling organisation

undertakes in order to reduce customer defections. Successful customer retention startswith the first contact an organisation has with a customer and continues throughout the

entire lifetime of a relationship.A companys ability to attract and retain new customers,is not only related to itsproduct or services, but also strongly related to the way itservices its existing customers and the reputation it creates within and across the

marketplace.


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Customer retention is more than giving the customer what they expect, its aboutexceeding their expectations so that they become loyal advocates for yourbrand.

Creating customer loyalty puts customer value rather than maximizing profits andshareholder value at the center of business strategy[1]. The key differentiator in a

competitive environment is more often than not the delivery of a consistently high

standard of customer service.

1.Past and Current customer behavior is the best predictor of Future customer

behavior. Think about it. In general, it is more often true than not true, and when itcomes to action-oriented activities like making purchases and visiting web sites,

the concept really shines through.

We are talking about actual behavior here, not implied behavior. Being a 35-year-oldwoman is not a behavior; its a demographic characteristic. Take these two groups of

potential buyers who surf the Net:

People who are a perfect demographic match for your site, but have never made apurchase online anywhere

People who are outside the core demographics for your site, but have purchasedrepeatedly online at many different web sites

If you sent a 20% off promotion to each group, asking them to visit and make a first

purchase, response would be higher from the buyers (second bullet above) than thedemographically targeted group (first bullet above). This effect has been demonstrated

for years with many types of Direct Marketing. It works because actual behavior is betterat predicting future behavior than demographic characteristics are. You can tell whether

a customer is about to defect or not by watching their behavior; once you can predictdefection, you have a shot at retaining the customer by taking action.

2. Active customers are happy (retained) customers; and they like to "win." Theylike to feel they are in control and smart about choices they make, and they like to feel

good about their behavior. Marketers take advantage of this by offering promotions ofvarious kinds to get consumers to engage in a behavior and feel good about doing it.

These promotions range from discounts and sweepstakes to loyalty programs and higher

concept approaches such as thank-you notes and birthday cards. Promotions encouragebehavior. If you want your customers to do something, you have to do something for

them, and if its something that makes them feel good (like they are winning theconsumer game) then theyre more likely to do it.

Retaining customers means keeping them active with you. If you don't, they will slip

away and eventually no longer be customers. Promotions encourage this interaction ofcustomers with your company, even if you are just sending out a newsletter or birthdaycard.


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The truth is, almost all customers will leave you eventually. The trick is to keep themactive and happy as long as possible, and to make money doing it.

3. Retention Marketing is all about:

Action Reaction Feedback Repeat.

Marketing is a conversation, as the Clue-Train Manifesto and Permission Marketing havepointed out. Marketing with customer data is a highly evolved and valuable

conversation, but it has to be back and forth between the marketer and the customer, andyou have to LISTEN to what the customer is saying to you.

For example, let's say you look at some average customer behavior. You look at everycustomer who has made at least 2 purchases, and you calculate the number of days

between the first and second purchases. This number is called "latency" - the number ofdays between two customer events. Perhaps you find it to be 30 days.

Now, look at your One-Time buyers. If a customer has not made a second purchase by30 days after the first purchase, the customer is not acting like an "average" multi-purchase customer. The customer data is telling you something is wrong, and you should

react to it with a promotion. This is an example of the data speaking for the customer;you have to learn how to listen.

This site and the Drilling Down bookare all about how to discover, manage, and listen to

customer data. The data is speaking for the customer, telling you by its very existence (ornon-existence) there has been an action (or non-action) waiting for a reaction.

Customer Life time value:

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or

lifetime value (LTV) is the net present value of the cash flows attributed to the

relationship with a customer. The use of customer lifetime value as a marketing metrictends to place greater emphasis on customer service and long-term customer satisfaction,

rather than on maximizing short-term sales. One of the first accounts of it is in the 1988book Database Marketing, and includes detailed worked examples.

Customer lifetime value has intuitive appeal as a marketing concept, because in theory it

represents exactly how much each customer is worth in monetary terms, and thereforeexactly how much a marketing department should be willing to spend to acquire each

customer. In reality, it is difficult to make accurate calculations of customer lifetimevalue. The specific calculation depends on the nature of the customer relationship.

Customer relationships are often divided into two categories. In contractual or retentionsituations, customers who do not renew are considered "lost for good". Magazine

subscriptions and car insurance are examples of customer retention situations. The othercategory is referred to as customer migrations situations. In customer migrationsituations, a customer who does not buy (in a given period or from a given catalog) is still

considered a customer of the firm because she may very well buy at some point in the


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future. In customer retention situations, the firm knows when the relationship is over.One of the challenges for firms in customer migration situations is that the firm may not

know when the relationship is over (as far as the customer is concerned).

Everyone wants to retain his or her existing customers. Few companies, however, are

implementing positive strategies aimed at retention. Most companies are organized foracquisition. Their advertising and sales programs are designed to find and promote theirproducts and services to new customers. The companies are organized on a product or

brand basis, not on a customer segment basis. While they all have customer servicedepartments, and most have a customer service toll free number, they lack an integrated

marketing strategy that is directed at retention, and that defines retention as themeasurement of success. In this article, we will explore the meaning of a retention

strategy, showing how it can be set up, and how lifetime value can be used to measure it.

Q.3 What do you understand by customer definedservice standards? Explain its

relevant inservices marketing.

Ans.: Customer definedservice standards:

A customer service standard is the interaction between abusiness and its customers.

Customer service standards are excellence, response time, accessibility, delivery time andcommitment. All business leads back to the customer in one form or another, so it is

imperative that companies continuously strive to improve the level of service theydeliver. Customer service standards must be constantly monitored and incorporated into

the strategic planning of the company.

Excellence in Customer ServiceHandle customers with care and reap the rewards long after the service has been given.

Business image by Clark Duffy from Fotolia.com


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You must meet and exceed expectations and guarantee a quality product.

Timely

How a product is delivered is what the customer will remember.Two business -men

holding clock image by Ricardo Verde Costa from Fotolia.com

Deliver your product or service efficiently. Categorize response time. For instance, if the request

is for general information, respond to the customer no later than 24 hours after receipt of his

request.

Accessible

Be accountable, providing a contact for inquiries.telephone image by

MATTHIEU FABISIAK from Fotolia.com

Periodically contact the customer to assess any need or special request. Provide feedback and

ideas and hear what the customer wants. Use this a tool for improving customer service.

Committed

Communicate to your customers your committment and loyalty and they will

do the same in most cases.Handshake image by Du...an Zidar from Fotolia.com

Be professional, courteous and responsible to the customer

Factorsnecessary for appropriate service standards.

-Standardization of service behaviors and actions.

Expert services cannot be standardized viz; Accounting, consulting, engineering,dentistry, etc.

Recurring tasks can be standardized viz; checking in patients, weighing, billing,

collecting payment, etc.

Hard customer defined standards. Things that can be counted, timed, or observedthrough audits (time, numbers of events)


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Soft customer defined standards.

Opinion-based measures that cannot be observed and must be collected bytalking to customers (perceptions, beliefs)

Q.4. Mentor Institute provides educational support services to different colleges anduniversities. Now, they want to start consulting services for distance education

programmes and career counseling. Suggest some steps on how to market their

consulting services once it gets initiated.

Ans.: Steps for marketing:The process of setting objectives consists of the following

three levels:

1. Level 1: Setting broad marketing objectives. The broad marketing objectives would

be concerned with long-term profitability, and be related to the organizational objectives.

2.Level

2: Setting objectives for key result area. Here the objectives are defined moreprecisely and specifically relating to different functions.

3. Level 3: Setting subjective to support the broad objectives; these objectives would be

based on sales volume goals, geographical expansion, and service offering extension.


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Marketing objectives help determine where the organisation want to go and also provideyardsticks by which it can measure its performance. Marketing objectives should meet

several criteria, and should be:

Relevant the marketing objective should be relevant in relation to the corporate

mission and objectives.

Specific it should focus on clear and identifiable goals.

Measurable the objective should be quantified.

Time Bound it should have an achievement day attached to it.

Challenging objectives should be realizable, but should stretch people in achievingthem.

Focused marketing objectives should focus on issues relating to both the markets products and services, which the company wishes to address.

Marketing objectives and strategies to achieve the target include:

Increased productivity

Sales force effectiveness;

More efficient distribution;

Pricing strategies; and

Improved customers service

Increased revenues from:

Market penetration;

Service development;

Market development; and

Diversification

Decrease expenses:

Scale related; and

Non-scale related


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Each of these elements needs to be systematically investigated to determine its potentialimpact on reducing the identified gap. Further there is Estimated Expected Results and

Identify Alternative Mixes in Service Quality. They are

a) Estimated Expected Results inservice quality:

The purpose of examining the expected results from the marketing strategies is to ensurethat marketing strategies will actually deliver the desired marketing objectives. Once the

strategies have been determined and decisions made about the marketing mix to bedeveloped in each market segment, the financial implications of the strategies need to be

evaluated. Estimating expected results involves the detailed review of sales revenues,cost of sales, marketing costs, operating expenses and overhead expenses. The financial

analysis should show that the strategy would produce anticipated results. The marketingstrategies need to be examined further to see how they can be redeveloped to achieve the

desired results. This, like all steps in the marketing plan, may be an interactive process.

b) Identify Alternative Mixes inservice quality:

The purpose of considering alternative mixes is to discover if more effective marketing

strategy is available before the plan is implemented. A marketing manager may evaluatea number of mixes, using both analysis and trial and error to find the best use of available

resources, before selecting the final marketing mix to be implemented as marketingprogrammes.

If the proposed marketing strategy is not likely to achieve the desired level of expected

results, other marketing strategies will need to be considered. However, even if theproposed marketing strategies will deliver the desired results, alternative marketing mixes

should also be investigated to determine if they could deliver improved results. Thus,several further sets of marketing strategies should be developed and evaluated.

At this point the development of contingency plans should be considered. Although it isnot possible to establish a contingency plan for every eventuality, the impact of different

sets of assumptions should be assessed and, where appropriate, broad contingency plansneeds to be considered. In spite of best intentions, changed situations can force marketing

strategies to be altered.

It is especially important that responsibility for determining why variances have occurred,and for taking appropriate corrective action. It is delegated to specific managers to ensure

that plan objectives can be met by marshalling the necessary resources and by takingpositive and timely action.

Phase IV: Resource Allocation and Monitoring

The list phase in the marketing planning process is resource allocation and monitoring.This involves two final steps: marketing programmes; and monitoring control and review.


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Marketing Programs for Service Quality

The purpose of marketing programmes is to ensure that all firms staff know what actionsthey are responsible for and to determine how to allocate physical and financial resources

available to secure success in each marketing segment.

Each element of the marketing mix will have its own specific programmes, which in turnwill be linked to specific marketing objectives. Marketing programmes are similar to

marketing objectives and strategies in that they should do the following:

Have an established timetable and be able to be carried out within a defined period of

time.

Identify the resources needed to carry them out.

Provide for monitoring and control of performance.

Programmes should clearly describe the resources needed to accomplish marketing

strategies and the time horizon in which to achieve them. Programmes provide theopportunity for all members of the marketing team to work together in an integrated

manner.

Programmers involve the development of a practical, fact based, results orientedapproach, which act as a road map for management to implement marketing activities. A

detailed marketing budget needs to be prepared at this point to ensure that the necessarybudget allocations reflecting projected costs are available to carry out the programmes.

Afurther task within programmes is the development and prioritization of importantmarketing activities, subjects and tactics. This involves the preparation of marketing

activities, sub activities and tactics. This involves the preparation of marketing

programme timetables to help ensure that key tasks are accomplished on schedule.

Marketing programmes need to be closely linked with the final stage of monitoring

control and review to ensure success.

Q. 5 Duress Components Ltd.wants to use technology in its CRM system. Kindly

help the company with suitable suggestions.

Ans.: Developing technology for CRM:

A service company should focus especially on customer service and keep customersatisfaction levels under constant review. Usually there is a need for a complaint system,

which allows unhappy customers to be identified, and corrective action taken. Above all


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else, a service company needs to stay in touch with the changing needs of the customersin terms of customer service.

Channels

Achannel, according to the

American Marketing

Association, is the structure of intracompany organization units and extra company agents and dealers wholesale and retail,

through which a commodity, product or service is marked. It includes all the stages and

organizations through which a product passes between its points of production andconsumption. In the process, three participants, viz., the service provider, intermediaries

and customers are involved. The principal function of a distribution channel is to providea link between the production and consumption by filling away the gaps/discontinuities

existing.

The discontinuities mentioned above may arise from a number of causes/some of them are:

1) Geographic separation

2) Time (in services fluctuations in supply and demand are generally unlikely and so this factor

may not have much relevance),

3) Information,

4) Ownership (this also has little importance in services as transfer of legal title to ownership

rarely occurs),

5) Sorting.

A channel may be simple when there is a single, direct transaction between producers andconsumers. This form of distribution is common in some service sectors (e.g. professional

services).

When there is a concentrated production and the consumers are widely diffused, different

channels develop and coexist with a variety of intermediaries such as advertising agencies which

act as brokers for a number of related services including media buying, print and production.

Travel agents act as middlemen for airlines, hotels and leisure services. A recruitment agency

provides a service as intermediary between employer and employee.

The broad channel options for services are outlined in the following figure and include:

Direct sales e.g. accounting and management consulting services.

Agent or broker, insurance broker, estate agent and travel agent.

Sellers and buyers agents or brokers, e.g. stockbrokers and affinity groups.

Franchises and contracted service deliverers e.g. fast food, car services and dry-cleaning.


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This illustrates that although many services are intangible and inseparable and direct salesmay be the appropriate channel, services can be distributed by considerable number of

other channel options. In financial services sector range of distribution options are beingused. These include the following.

Direct face-to-face sales

Use of tied or untied sales representatives

Direct mail

Telemarketing

Computer networked distribution

Professional service firms, e.g. estate agents and consultants

Cable TV

One approach to considering the channels is how they compare with those of the competitors,

is suggested by Light. His framework has these main sectors:

The channel participants and their relationship

The various functions that participants perform using material and technological supports.

The service they create.

Location and Channel Choice

The choice of both distribution and channels for service largely depends on the particular

requirements of the market and the nature of the service itself. Technology has someinstances, changed the advantage to be gained by proximity of a service to the customers


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market. For example, electronic banking has removed the need for banks to deliver theirservices. Many banking transactions can now be performed easily without personal

contact. Technology has allowed changes in the location decision in many serviceindustries, but the decision o where and how to distribute services is often still dependent

on the needs of the customers.

Services delivery channels are often the service providers. This highlights the importanceof the selection of the appropriate delivery channel.

CRM uses the electronic media to operate and simplify customer related business

processes, reducing the cost of customer facing operations. While achieving the CRMsprimary goal is to enhance the customer experience, it ensures that various companies

share a single view of the customers, and that the customers get a single view of thecompany.

CRM derives from CRM techniques, which leveraged call center and direct marketing

technology to market mass-produced goods and services to small market sub-segments.CRM expands on this technology by using next generation segmentation and analysistechnologies, comprehensive customer interaction data multi-channel communications

and one-to-one interactions to market customized products and services to ever-moreprecise segments.

CRM is essentially the adoption of CRM in the commerce environment and helps build

and sustain customer relationships using the net. It is a net based business strategy thatrequires development of a set of integrated software applications to deal with all aspects

of customer interactions like sales, marketing, field support and customer service. Itprovides closed loop integration between the outbound marketing efforts and the inbound

customer responses to these, by analyzing them for efficient business operations. Thus, aCRM exercise would mainly focused upon acquiring new customers, enhancing

profitability of existing customers, segment high value customers and maximize lifetimevalue of profitable customers.

In simplest terms CRM provides companies with a means to conduct interactive,

personalized and relevant communications with customers across both electronic andtraditional channels. It utilizes a complete view of the customer to make decisions about

messaging, offers and channel delivery.

It synchronizes communications across otherwise disjoint customer-facing systems. It

adheres to permission-based practices respecting individuals preferences regarding howand whether they wish to communicate with you and it focuses on understanding how the

economics of customer relationships affect the business.

Thus precisely, CRM is customer centric on-line business model that optimizes thecustomer experience across all phases of the on-line customer life-style, using a

personalized and customized approach to interact with prospects and customers.


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Q. 6 a. What do you mean by CRM? Is it important in services marketing?

Ans.: CRM Definitions

CRM (Customer relationship management), which means The relationship managementof a customer by an organization

CRM means The Goal of keeping the customers for the long term benefit of anorganization

CRM means Acquiring, Developing and retaining satisfied royal customer, achieving

profitable growth and creating economic value in companys brand.

Finally CRM means the establishing, the developing, the strengthening, and the trusting

of good values among the customer for companys brand.

CRM is not a new concept but an age-old practice, which is on the rise because of thebenefits it offers, especially in the present market scenario.

So, CRM today is a discipline as well as set of discreet software and technologies which

focuses on automating and improving business process associated with managingCustomer Relationship in the areas of sales, marketing, customer service and support. It

helps the companies understand, establish and nurture long term relationships with clientsas well as help in retaining current customers.

The most important step that an organization has to take in the direction of CRM is tocreate an interdisciplinary team to review how the organization interacts with each

customer and determines how to extend and improve the relationship.

Importance of CRM:

Increase in customer partnering

Expansion of customer base

Reduction in advertisement and other sales promotion expenses

Generation of more and more loyal customers

Easy introduction of new products

Reduction in customer recruitment cost


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Increase in customer partnering

Increase in the number of profitable customer

Another emerging concept in CRM is maintaining and creating a relationship with the

existing customers and new customers.

The company causes customer problems solving and timely attention of their grievancesand the politeness for the acceptance of the mistakes. Many managers believe that

customers are the key to profitability considering the traditional organization. Moreoverthe customers timely help in their problems and product-based descriptions will be

present trend in the customers. The customers are the main focal point for theorganizations to sort out the problems of the products, its growth, and its competition and

so on. Hence the customer is the decider of the growth of the company.

b. Give a note on integratedservice marketing mix.

Ans.: Integratedservices marketing mix:

It is the coordination and integration of all marketing communication tools, avenues,

functions and sources within a company into a seamless program that maximizes theimpact on consumers and other end users at a minimal cost.

Integrated marketing communications (IMC) is a process for managing customer

relationships that drive brand value primarily through communication efforts. Such

efforts often include cross-functional processes that create and nourish profitablerelationships with customers and other stakeholders by strategically controlling orinfluencing all messages sent to these groups and encouraging data-driven, purposeful

dialog with them. IMC includes the coordination and integration of all marketingcommunication tools, avenues, and sources within a company into a seamless program in

order to maximize the impact on end users at a minimal cost. This integration affects allfirm's business-to-business, marketing channel, customer-focused, and internally directed

communications.

Integrated marketing Components:

yThe Foundation - corporate image and brand management; buyer behavior; promotionsopportunity analysis.

y Advertising Tools - advertising management, advertising design: theoretical frameworksand types of appeals; advertising design: message strategies and executional

frameworks; advertising media selection. Advertising also reinforces brand and firm

image.


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y Promotional Tools - trade promotions; consumer promotions; personal selling, databasemarketing, and customer relations management; public relations and sponsorship

programs.

y Integration Tools - Internet Marketing; IMC for small business and entrepreneurialventures; evaluating and integrated marketing program.

The Internet has changed the way business is done in the current world. The variables of

segmentation, targeting and positioning are addressed differently. The way new productsand services are marketed have changed even though the aim of business in bringing

economic and social values remain unchanged. Indeed, the bottom line of increasingrevenue and profit are still the same. Marketing has evolved to more of connectedness,

due to the new characteristics brought in by the Internet. Marketing was once seen as aone way, with firms broadcasting their offerings and value proposition. Now it is seen

more and more as a conversation between marketers and customers. Marketing effortsincorporate the "marketing mix". Promotion is one element of marketing mix.

Promotional activities include advertising (by using different media), sales promotion(sales and trades promotion), and personal selling activities. It also includes Internet

marketing, sponsorship marketing, direct marketing, database marketing and publicrelations. Integration of all these promotional tools, along with other components of

marketing mix, is a way to gain an edge over a competitor.

The starting point of the IMC process is the marketing mix that includes different types

of marketing, advertising, and sales efforts. Without a complete IMC plan there is nointegration or harmony between client and customers. The goal of an organization is to

create and maintain communication throughout its own employees and throughout itscustomers.

Integrated marketing is based on a master marketing plan. This plan should coordinate

efforts in all components of the marketing mix. A marketing plan consists on thefollowing steps:

Situation analysis

Marketing objectives

Marketing budget

Integrated marketing communications aims to ensure consistency of message and the

complementary use of media. The concept includes online and offline marketingchannels. Online marketing channels include any e-marketing campaigns or programs,

from search engine optimization (SEO), pay-per-click, affiliate, email, banner to latestweb related channels for webinar, blog, micro-blogging, RSS, pod cast, Internet Radio,

and Internet TV. Offline marketing channels are traditional print (newspaper, magazine),mail order, public relations, industry relations, billboard, traditional radio, and television.

A company develops its integrated marketing communication programmer using all theelements of the marketing mix (product, price, place, and promotion). Integrated


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marketing communications plans are vital to achieving success. The reasons for theirimportance begin with the explosion of information technologies. Channel power has

shifted from manufacturers to retailers to consumers.


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MBA 4th Sem Marketing Managment

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