Services Marketing v4

7/27/2019 Services Marketing v4

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M M M

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S MS M

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M M M M PP

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M C M EM C M E

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E C

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S OS O S? I S

C S

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A P S M I

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S? S?

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A R R


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C C

II

C C O !O !

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A R R

SS HH


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C C Intangibility:

Hard to explain and display Services if youcant see them

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r ces are cu o se - epen s oncustomers expectations

A R R


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C C Consumption:

Production (performing the service) &Consumption (using the service) - happens

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Many people involved in delivering a

service

mass production of services is hard to do

A R R


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C C Heterogeneity:

Services are not always delivered thesame way, So It is .

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very cu o s an ar ze

A Taxi driver cannot drive you to the office in exactly thesame time each day because the traffic patterns change

A R R


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C C S / :

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D ,

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C C Ownership:

Lack of Ownership

Service can be copied easily copyrights

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S PS P

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S M? S M? S M P

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L E RL E R

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All Rights Reserved

What is Strategy?


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What is Strategy? A Strategy is a long term plan of

action designed to achieve aparticular Goal, most often "winning".

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A Greek word stratgos, which derives

from two words: stratos (army) and ago

(ancient Greek for leading). Stratgosreferred to a 'military commander'

Strategic Management


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What is Strategic Management?

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Three strategic questions:

Where are we now? Where do we want to go?

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Business position Financial outcomes

Strategic outcomes

How we will get there?



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Art & science of formulating,implementing, and evaluating,

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cross-functional decisions thatenable an organization to achieve

its objectives.



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Strategic Management achieves a firms success

through integration

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Management

MIS

Production/OperationsFinance/Accounting

Research & Development

Marketing

Product Life Cycle


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y

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PLC Introduction Stage


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g

SalesSales

CostsCosts

ProfitsProfits

Low salesLow sales

High cost per customerHigh cost per customer

NegativeNegative

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ar e ng ec vesar e ng ec ves

ProductProduct

PricePrice

and trial

and trial

Offer a basic productOffer a basic product

Use cost-plusUse cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness amongearly adopters and dealersBuild product awareness amongearly adopters and dealers

PLC Growth Stage


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C G S g

SalesSales

CostsCostsProfitsProfits

Rapidly rising salesRapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

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ar e ng ec vesar e ng ec ves

ProductProduct

PricePrice

Offer product extensions,service, warrantyOffer product extensions,service, warranty

Price to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness and interest inthe mass marketBuild awareness and interest inthe mass market

PLC Maturity Stage


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y g

SalesSales

CostsCosts

ProfitsProfits

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending

Maximize profit while defending

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ProductProduct

PricePrice

market sharemarket share

Diversify brand and modelsDiversify brand and models

Price to match or bestcompetitorsPrice to match or bestcompetitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences andbenefitsStress brand differences andbenefits

PLC Decline Stage


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g

SalesSales

CostsCosts

ProfitsProfits

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk theReduce expenditure and milk the

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ProductProduct

PricePrice

brandbrand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution

Go selective: phase out

unprofitable outlets

Go selective: phase out

unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retainhard-core loyal customers

Reduce to level needed to retainhard-core loyal customers

External and Internal Analysis


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y

Analyze all the external andin rn l f r n v ri l h

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affect the organizationperformance

Internal Analysis


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y

organization analysis

Goals

Attainable at some specific future datethrough planned actions.

E. . 10% rowth in revenue in the next two

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years.

E.g. 5% cost reduction in the next fiveyears.

Focus

On what does the organization focusE.g. High quality, low prices, one market

Internal Analysis


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y

Culture

Innovation and risk takingOutcome orientation

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Attention to detailStability, conservativeness.

Internal Analysis


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Strengths

Attributes of the organizationthat are helpful to achieving the

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These attributes does not exist

in competing companies.

Internal Analysis


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Weaknesses

Attributes of the organization thatare harmful to achieving the

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These attributes does not exist in

competing companies.

Internal Analysis


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Examples of S & W

Resources: financial, intellectual, location Cost advantages from proprietary know-how

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Creativity (ability to develop new products) Valuable intangible assets: intellectual capital

Competitive capabilities

Effective recruitment of talented individuals

External Analysis


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Micro environment / Market analysis Market share

The proportion of the market that the company inable to capture

=

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Increasing market share can contribute tocompany growth, reputation, cost reduction

Sometimes its better not to increase the marketshare (e.g. operating at full capacity, price wars,

cost may increase if promotional expendituresincrease).

External Analysis


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Customer analysis

Number

how many customers are available in

the market

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Type

Individual or business, educated or not,

rich or average etc

Value drivers

Quality, price, safety, environment,

availability etc

External Analysis


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Decision process

Business (rational)

Individual (more emotional)

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longer and more complicated Concentration of customer base for

particular products

In one geographical area or more

Domestic and global markets

External Analysis


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After we finish the customer analysis stage

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we s ou s ar our mar e ng p ann ng

process



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SWOT analysis

is a strategic / marketing planning tool used

to evaluate the Strengths, Weaknesses,

Opportunities, and Threats.

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Helpful HarmfulInternal Strength Weakness

External Opportunities Threats



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SWOT matrix

Strengths Weaknesses

Opportunities S-O strategies W-O strategies

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Use strengths to take

advantage ofopportunities

Overcome weaknesses

by taking advantage ofopportunities

Threats S-T strategies

Use strengths to avoidthreats

W-T strategies

Minimize weaknessesand avoid threats



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External analysis - Macro environment

/SLEPT analysis include:Social

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LegalEconomical

PoliticalTechnological

Globalization

Marketing strategies


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Marketing Strategy

is a process that can allow an organizationto concentrate its (always limited)

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increase sales and achieve a sustainablecompetitive advantage.

A Viable Marketing Strategy


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Must have clearly defined markets

Must have a good match betweencorporate strengths and market

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needs Must have significant positive

differentiation in the key success

factors of the business

Corporate Growth Strategies


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Strategic Marketing Planning


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Segmentation


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Segmentation


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Segmentationis the process inmarketin of dividin a market into distinct

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subsets (segments) that behave in thesame way or have similar needs.


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Segmentation


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Consumer market segmentation

Segmentation can be done based on thefollowing basis

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eograp c segmen a on

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Segmentation


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Consumer decisions are affected by:

Cultural factors (values, behaviors) Social factors (family, groups)

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Personal factors (age, occupation,

lifestyle)

Psychological factors (beliefs, attitudes)

Segmentation


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Business market segmentation

Segmentation can be done based on thefollowing basis

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eograp c segmen a on

Customer type

Buyer behavior

Segmentation


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Small segments are often

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termed n c e markets orspecialty markets

Targeting


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Targeting


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After segmenting the market, we target the

segments that we think we can attain and

serve.

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For each segment we choose the mostappropriate marketing mix (product, price,

place, and promotion)

Targeting

ff


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Undifferentiated: target entire market with

one particular product.

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with products and promotions aimed toeach segment.

Concentrated: Target one particularsegment

Targeting


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Targeting errors trigger wrong results

Wrong results trigger less or no sales

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Less or no sales trigger investment

deterioration

Investment loss (in this case) could havebeen avoided by correct targeting


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Positioning


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Now we know our market

Now we know its segments

Now we know the targeted segment(s)

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Develop your position well to hit the targetsegment .. You cant miss.

How do you want consumers to see your

product.


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Positioning


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How is your product is better and different

than competing products ?

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By answering to market requirements best,

first, and always new


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Competitiveness Improvement

St t i t i ll


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Strategic management is all

about achieving sustainablecompetitive advanta e

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Fred David

If you dont have a competitiveadvantage dontdontcompete

Jack Welch, GE

Competitive Advantage

A thi th t fi d i ll llA thi th t fi d i ll ll


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Anything that a firm does especially wellAnything that a firm does especially well

compared to rival firmscompared to rival firms

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compe ve a van age ex s s w en e

firm is able to deliver the same benefits ascompetitors but at lower cost (cost

advantage), or deliver benefits that exceed

those of competing products

(differentiation advantage)


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Branding

Brand


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Effective Marketing Tools

Word of Mouth (Customer satisfaction)


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Word of Mouth (Customer satisfaction)

Public Relation Publicity (Press)

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Social Responsibility / events

Creative Ideas (new to the Market)

Online Marketing / eMarketing

Email Marketing


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Customers are people or businesses ororganizations who buy and/or use the

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The customer pays your salary and makesthe biggest portion of your income

statement

New Mantra of Marketing?

St t i C t C


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The old business model focused on creating

and distributing products, acquiringcustomers, either new ones or from

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Today, customers expect companies to adoptnew customer centric business models

CRM is the same as one to one marketing. This customer

Customer Relationship

Management (CRM)


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focused business model also goes by the namesrelationship marketing, real time marketing, customer

intimacy, and a variety of other terms.

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But the idea is the same: establish relationships with

customers on an individual basis, and then use theinformation you gather to treat different customersdifferently. The exchange between a customer and acompany becomes mutually beneficial, as customers

give information in return for personalized service thatmeets their individual needs.


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4 Ps enhancement with 4 Cs

An Enhancement of Marketing


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4 P s enhancement with 4 C s

The 4 Ps Strengthened by The 4 Cs

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Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication

Cost of acquiring customers

Importance of CRM


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Generally costs 5X as much to attract new customers

as it does to keep existing ones Reducing customer churn rate 5% can increase

rofits 25 - 95%

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Satisfied customers are great source of market

capitalization / improved ROI Number 1 reason for customer defections is poor

customer service.

ROI and Customer Satisfaction


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p g g

products and services at less costs

Attain all the necessary information of

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Less stress on employees Keep open communication channels

that enhance market research

Enhance organizational growth through

retaining customers

A Framework for CRM

Create Database


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Customer

ServiceCustomization

y y

Programs

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Reward

Programs

EventMarketing

Community

Building

CRM

Satisfaction

Tips

Clients should not all be treated in the same


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way, You should prioritize them according to

how profitable they are for you.The more you grow without the proper customer

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knowledge / management system, the more you

dont know who your customers are, you dontknow what their needs are, you are

disconnected with them, and you are

dissatisfying them.

Tips

Too many companies invest in CRM


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standards and even technology, while

ignoring the staff readiness issues that can

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implementation.CRM is about many different phases of the

overall institution lifecycle, client lifecycle,

and the relationship lifecycle.

Tips

Another common mistake made by big and


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small firms is understanding the resistance

to a new system, created by organizational

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.

cultural barriers, not system problems.Buy for the future; invest in information

accumulation for improvement.

MARKETMARKET


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The Functions of Marketing ResearchThe Functions of Marketing Research


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Descriptive function

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Diagnostic function

Predictive function

A R R

Why Market Research?Why Market Research?

The Importance of Marketing Research [1]

Guides companys communication with current &


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Guides company s communication with current &

potential customers Helps company identifying opportunities in the

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mar e p ace

Uncovers & identifies potential problems Minimizes the risk of doing business

Creates benchmarks and helps company

tracking their progress Determines the potential size of the market

A R R

Why Market Research?Why Market Research?

[2]

Helps company evaluating its success


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Helps company evaluating its success

Provides valuable information about marketsegments & customers shared characteristics

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power & buying habits

Provides valuable information about psychologicalaspects of the market

Provides valuable information about marketplace

competition Provides valuable information about environmental

factors

A R R


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The Importance of InformationThe Importance of Information


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Value

Decreased Uncertainty

Increased Likelihood of a

correct decision

Research expenditures

Delay of marketing

decision & possible

disclosure of information

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A R R

Improved marketing

performance & resulting

higher profitsIdentifying new trends or

niche markets

to rivals

Possible erroneous

research results

Market Research ProcessMarket Research Process

Define the Problem &

Research Objectives


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Develop the Research

Plan

Collect the Information

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A R R

Analyze the Information

Present the Findings

Make the Decision

StepStep 11: Define the Problem &: Define the Problem &

Research ObjectivesResearch Objectives

The objective of any research is to solve a

problem


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StepStep 22: Develop the Research Plan: Develop the Research Plan

An overall plan for obtaining the

information needed to address the


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information needed to address the

problem or issue

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Determining research cost

A R R

R PR P

D SD S Can use secondary data, primary

data, or both

Primary

Secondary


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Secondary data as a starting point

Secondary data has the advantages

Data collected for the

specific purpose at

hand

Data that has been

previously collected

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Primary data is sought whensecondary data do not exist, dated,incomplete, or unreliable.

A R R

Both Must Be:

Relevant

Accurate

Current

Impartial


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A R R

Research PlanResearch Plan

22-- Research ApproachResearch Approach Observational Research:

Observing relevant people, actions, or situations

Shopping behavior


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Shopping behavior

Focus-Group Research:

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x o en peop e

Objective, knowledgeable, and skilled moderator

Discussing product, service, organization, etc

Sample size is small

Survey Research:

Learning about peoples knowledge, beliefs, preferences, satisfaction, and so on

Suitable for descriptive researches.

A R R


22-- Research ApproachResearch Approach

Behavioral Data:


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Customers past purchasing behavior Store scanning data, and customer database

Purchases analysis reflects customers actual preferences

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Experimental Research:

Scientifically valid

Purpose to catch cause-and effect relationships

A R R


33-- Research InstrumentsResearch InstrumentsThe main research instruments for collecting primary data is:

Questionnaire:


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Questionnaire:

Consists of a set of questions asked to respondents.

The most commonl used instruments due to its flexibilit &

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relatively low cost

Needs to be carefully developed, tested, and debugged before theyare distributed

Questions, questions form, wording, and sequence must be carefully

chosen

Open-ended Vs. Closed-ended questions

A R R


44-- Sampling PlanSampling Plan

Who is to besurveyed?

Who is to besurveyed?

Probability orN b bilit

Probability orN b bilit


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surveyed?surveyed?Non-probability

sampling?

Non-probability

sampling?

Sample -

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A R R

How manyshould besurveyed?

How manyshould besurveyed?

How should thesample bechosen?

How should thesample bechosen?

representativesegment of the

population


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y

one or more marketing objectives. It can

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, ,

product line. It can cover one year

(referred to as an annual marketing plan),

or cover up to 5 years depending on

product and company age

Marketing Plan


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A marketing plan may be part of an overall

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us ness p an. o mar e ng s ra egy s

the foundation of a well-written marketingplan

Marketing plan outline

Executive summery

Description of product, goals


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p p , g

Situation analysis

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Company analysis goals, focus,

culture, strengths, weaknesses andmarket share

Customer analysis number, type,

value drivers, decision process,

concentration


Competitor analysis market position,

strengths, weaknesses, market shares


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Collaborators Subsidiaries, joint

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SLEPT analysis social, legal,environmental, political, technological


Market segmentation and targeting

Segment 1 description, % of sales,


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g p

wants, product usage, support

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Segment 2 - description, % of sales,wants, product usage, support

requirements, place, price sensitivity

Etc

Choose the target markets

Set alternative marketing strategies

Select marketing strategy and plan


Services Marketing v4

Documents

Transcript of Services Marketing v4