Customers

1
Customers

• 10/7, 2008

2
Network of the Marketing Mix
Functions
Tools
Relative Performance
Transaction- based Exchange
F.E.E.D.
4 Ps or Others
Value Creation
Long-term Relationship- based Exchange
Trust
Exchange
Marketing Mix
Objectives
Outcome
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FEED Values to Customers

• Fulfilling Benefit Requirements
• Establishing Total Acceptable Transaction Costs
• Engaging in Product-Inherent Value Message
  Communication
• Delivering Process-Inherent Transaction
  Facilitators

4
Bringing Customers Into the Boardroom

• The failure of marketing strategy is a crisis
  that requires attention at the higher level of
  the organization-from the corporate board itself
• In a survey of large U.S. companies, more than
  one-third reported that their boards spend less
  than 10 of their time discussing marketing or
  customer-related issues
• Top-line revenue growth, especially organic
  growth, ultimately boosts shareholder value, so
  investor increasingly demand it
• Responsibility for brand equity still resides in
  the marketing function
• The fundamental nature of marketing has changed
  so rapidly that many companies have not kept
  pace, making them vulnerable to savvy competitors
  and unable to capitalize on new growth
  opportunities

5
Strategic Alternatives
Long-term profits
Growth in sales or market share
Efficiency, short-run profits
Market development
Market penetration
Decrease inputs
Increase outputs
New segments
Existing customers
Reduce costs
Increase price
Convert nonusers
Competitors customers
Improve asset utilization
Improve sales mix
New product development
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Customers

• Customers
• Current customers of a given product
• Customers of competitors
• Current noncustomers of the product category
• Buyers vs. Users
• Initiator
• Influencer
• Decider
• Purchaser
• User

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An Understanding of Customers

• Who buys and uses the product?
• What customers buy and how they use it?
• Where customers buy?
• When customers buy?
• How customers choose?
• Why they prefer a product?
• How they respond to marketing programs?
• Will they buy it (again)?

8
Customer Value

• The customers perception of the total the total
  benefits to be derived from a product or service
  versus the total perceived costs of acquisition
  and ownership
• Customer typically have some implicit
  preconception about the right ratio of beenfits
  to costs
• Having compared avaialble alternatives, customers
  select the one that they think will give them
  best value
• Value is a relative concept it is perceived
  relative to competitor offerings

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Customer Value (II)

• Customer Value Perceived Benefits Perceived
  Costs
• Perceived Benefits Functional Benefits Social
  Benefits Personal Benefits Experiential
  Benefits
• Perceived CostsMonetary Costs Temporal Costs
  Psychological Costs Behavioral Costs

Shopping Costs or Transaction Costs
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Value Proposition
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Value Propositions in Business Markets
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Consumer Buying Behavior

• Refers to the buying behavior of people who buy
  goods and services for personal use.
• These people make up the consumer market.
• The central question for marketers is
• How do consumers respond to various marketing
  efforts the company might use?

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Model of Buyer Behavior
14
Model of Business Buyer Behavior
15
The Current Trend in Marketing

• For most of its history, marketing has been a
  creative, right-brain discipline that puts a
  premium on innovative, out-of-the-box thinking
• Expertise in the left-brain fields of IT,
  finance, and data analysis is no longer optional
  in marketing departments
• Information technology has become central to the
  intensive and critical data gathering and
  analysis companies use to segment customers,
  track their behaviors, and calculate their
  lifetime values
• IT is driving the rapid evolution of strategies
  for targeting these precisely monitored and
  measured customers these strategies include
  multichannel marketing, dynamic pricing, and
  microsegmentation

16
Marketing Performance

• Many marketing managers will tell you that
  marketing performance cant be measured-or at
  least doing so is of little strategic value
• Popular metrics such as customer satisfaction,
  acquisition, and retention have turned out to be
  poor indicators of customers true perceptions or
  the success of marketing activities
• Customer satisfaction could be a business driver
  in the case of a high-volume product with a high
  repeat-purchase rate, such as a soft drink