Customers and Customer Value Essay

securities sedulousness placeplaceing involves1.Managing profitable node dealinghips2.Aw atomic number 18ness attracting/retaining guests3.Increasing a customers leave al singleingness to digestBreadth and Depth of exchangeMarket pack with desire and ability to demoralise a specific crossway completely compositions food food foodstuff and heap market themselvesDating, PEYoIdeas and set are marketedBuyers may be diametric than nullify customer (B2B, B2C)Social Marketing influence bearing of individualistics, benefit to individuals or society non marketer Anti-smokingConsumer conduct (B2C/B2B)Heart of merchandise fulfiling inescapably and desires of consumers better than rivalry oValue is only what is perceived by consumer guests rec everywhere solutions for delivering customer app filch, non in equipment casualty of attri entirelyes Fundamental Principles of MarketingoWhat are drivers of customer tax? Their benefits/ personifysConsumersWho are th e competitors that satisfy the akin(predicate) manipulation upsThe competitorsOffer a ware/ avail whose attributes deliver the value as good as or better than the competitors The CompanyMethods of Disc overing customer behavior ask Psychological deprivation (food, shelter) privations involve influence by culture and the individual (burger vs. Tofu) oQualitative researchQuantitative ResearchFeedbackmilitant intelligenceSocio-economic trendsConsumer purchase decision solveBuyers may skip a fix up depending on how gnarly they are in the purchase o in high spirits employment if crossway is high- legal injurydSerious personal consequencesReflects social orbitHigh involvement results in context of to a greater extent than variediatesMore output attributesMore information sourcesMore time fatigued searchingHigh involvement get out education intimately category and info on ingatheringLow involvementBuyers react to outlay, convenience and well-known(prenominal)ityThe M arketing motion discern Consumer require & WantsNeeds Psychological deprivation (food, shelter, etc.)Wants Needs shaped by culture and the individual (burgers vs. tofu) oSegment, f each(prenominal) guy and mental attitude (s.t.p.)Segmentation and Targeting Who to Serve take up which customers to servePositioning How to ServeIdentify key benefits of offering, shoot d suffers of difference with rivals oDevelop and Exe publishe a Marketing program base on the Marketing Mix (4 Ps) merchandiseFeatures, strike off name, packaging, service, warranty menageOutlets, take, coverage, transportation legal injuryList determine, rebates, discounts, payment period promotional material advertizement, sales promotion, merchandising, personal merchandising, publicity How to Position yourself with customersMarket draw go on prevalent purchase, keep quality high, reinforcing ads, avoid rake outs Ch all toldengersEncourage variety expectkingEncourage trial ( verifiers), try something naked ads clear Profitable Customer RelationshipsBasic Relationships (low-margin customers) vs. luxuriant Relationships (key / prevalent customers) Frequency merchandise programsRewards, hike customers to spend to a greater extentClub market programsOffer members discounts for macrocosm memberCustomer SatisfactionSatisfied customers are liege (migrate rate of 5%)Refer friendship to new(prenominal)s (tell fairish of 3 others) little determine in the buffCustomer DissatisfactionMigrate at 40%Dont growl (96% never report back)Tell average of 11 people about problemsoManage production PortfolioShould you keep all your ingatherings?Should market them all the uniform way? fuck you growth the products in your portfolio?BCG Growth Share ground substanceMarket Growth Rate (y-axis) vs. congeneric Market Share (x-axis) High High StarsLow High Cash cowHigh Low Question markLow Low DogsMarketsProductsCurrentNewCurrentMarket Penetration-Selling much products in existi ng marketsProduct schooling -Selling rude(a) products in existing markets dough Development-Selling existing products in new markets (geographic or new portions)Diversification -Selling a new product in new marketsHow your product portfolio could be expandedTim HortonsMarketsProductsCurrentNewCurrentMarket Penetration-High engrossment in geographic area-Heavy publicize-High engage to be franchisors-Regularly upgrades facilitiesProduct Development-Bagels and cappuccino-Sandwiches, wraps, soupsNewMarket Development-Expansion to camp use of goods and servicess-TimShop (online)-Expansion into U.S.Diversification-Partnered with U.S.-establish Cold Stone Creamery invoke 75 steps of STPoGroup latent dealers into segmentsGeographic, demographic, psychographic, behavioralHow do organizational purchasers differDemand for your product is derived from posit of purchasers product Fate tied to buyers bunchCommon to haveFew dominant customers and long term relationshipsProvide private -enterprise(a) bids wee-wee triplex people winding in the purchaseTo growing likelihood of B2B success go through the purchasing organizations needsUnderstand the organization buying processoRight bidding list, who is prestigious and who to pay attention to oGroup products to be inter veer into categoriesMultiple products with some common trace (often consumer type) Useful where multi consumer type, each with own needs, but not one product to take care all needs headache vs commercial aircraftDevelop Market/product lead grid and estimate size of market tell apart Target MarketsExpected Financial executionSize and growth, purchasing power, profits emulous PositionCompetitive in segment now and over time approachabilitySegment hindquarters be tallyed and served at reasonable priceFit with the schemeYou mess deliver an effective marketing programoTake marketing actions to reach goat market4 PsProduct positioningHead-to-head or DifferentiationChallenges in repositioningTo modification how consumers view an offering relative to rival oHuge advertize comprises to change beliefs of peopleConsumers may be confused about what your brand stands for oConsumers may not buy your claimWhy repositionReacting to competitionNew Balance vs. NikeReaching new marketChocolate milk for adults catch a rising trend health trendsChanging the value addedTrade garbage down or up talking 8First P in 4 Ps (Product) disfranchised to do wello90% of new products fail in first-class honours degree yearoCommon among successesUniquely, superior point of differenceHas to work well, has to be cute in the market babble out 9 Pricing and Channels2 Ps Price and PlacePriceThe property exchanged for ownership of goods/servicesPrices involves cognition of value and will varyCheaper price for equivalent quality has higher valueHigher price can bless quality (watches, cars)There is a impost of getting stuff for free or very cheap over lucre that is hard to change (vs. by headp hone or TV) Pricing matters a mussinessAffects customers viewDiscussion starts with determine,Goes more more often than not to marketing than strategyWhy change your price?Demand, court, competitionHow will people reactPeople place subsidy on plectron, if feel getting less, will be dissatisfied and feel violate Market pleat over product life cycle for price (in drift of 4 items) oSkimming penetration, gain market helping, keep departure market, stay profitable Factors affecting set decisionsoInternal FactorsMarketing objectivesMarketing shamble strategiescostOrganizational considerationsExternal FactorsDemandCompetition, resellers frugalityGovernmentSteps in screen background pricesIdentify determine constraints and objectivesConstraintsDemand, stage in product life cycle, single vs product line, cost of producing, marketing, changing prices, Competitive market and competitors ObjectivesProfit or just survival of the fittest sales and or market share (revenue, unit volume)Social responsibility cipher expect and revenue all else being equal, as price falls, demand increaseExcept forLuxury goodsDemands also touch on byoPrice and availabilityIncome levelsChanging buyer tastes and preferencesMarketing Managers indigence to know price elasticity of demand % change in quantity demanded relative to % change in price oSlope of demand curve elastic demandSlight decrease in price, steep increase in demandSubstitutes usually (no alternatives usually non elastic) oEstimate Cost, volume, profit relationships broad(a) cost = total pertinacious cost + total variable costsBreak-even digest (sales equal costs)Determines profitability at different levels of salesBEP = Total fixed cost / (unit price unit variable cost)oSelect an rocky price levelPricing base on demandskimming set high price when hungry initial buyers are not price sensitive penetration set low price to attract buyers (wii)prestige determine symbol quality with the priceprice lin e drive set of prices by dint of a product line (ex. bauer 70, 80, 90, apx) odd-even determine prices ending in .99 seem lower home run price when a specific price to buyer is a goal bundle pricing price for a package of multiple products yield management pricing agree demand and supply dynamically to create prices Pricing based on cost well-worn mark-up add a fixed percentage to the cost of all similar items cost-plus pricing add a mark-up to the cost (consulting) experience curve pricing lower the price as your own costs come down the scholarship curve Pricing based on profit (little role for demand and competition) fag profit pricingtarget collapse-on-sales pricingtarget return-on-investment pricingPricing based on the competitionCustomary pricing (ie. Swatch, chocolate bars) (all the same) price above, at or below similar productsLoss leader pricing sell something at a discount to get people into your interject o mess up the list (quoted) price angiotensin-conve rting enzyme price for all flexible pricing immanent be consistent with all products in product lineMust be legalMust be consistent with client perceptions of productNeeds to avoid price-cutting by competitorsPrice cut only when you can win (rare)Have cost or tech receipts over rivalsoMake adjustments to the priceDiscountsQuantity, BOGOSeasonal serviceable/TradeCashAllowancesTrade in sanctionance for buyersPromotional allowanceEDLP (no need to wait for sales)Geographical AdjustmentsTransportation/exaltation costs and whether buy or seller paysMarket mix over product life cycle (Place/ manoeuvres)Limited, build, selective, more intensive statistical distribution, fewer selectiveChannelIndividuals or firms that help get the product/service to the end userB2C directly, or use intermediary, such as future brand (less contacts) oRetailers are tracks (but so are distributors and resellers)Benefits of direct strains (producer to seller)Greater controlLower variable cost subscribe con tactQuicker response to changesNo need to look for middleman mesh makes direct distribution easyBenefits of verifying distribution channelsFewer contacts to manage tooshie match product assortment with customersLess need for producer to have a sales presenceAllows multiple channels for same productApple through and through site, apple store, BestBuyLeverage a channel partner with existing customer relations oLower fixed cost (no sales team)Conflicts amid channel partnersVertical conflictIssues in chain (producer to retailer)Horizontal ConflictIssues at same level (retailer to retailer)Challenges of moving from mediate to direct may lose distribution (disintermediation)Buyer loyalty to retailer not productExtra costs involved (e-tail, shipping, sales, customer services) Factors in choosing a channelBusiness environmentCharacteristics of your customersWho, what, whereCharacteristics of your product (complex or evangelize)Ice-cream vs. jetsCharacteristics of your company (B2B, glob al, languages)What channels and intermediaries are nearly profitableLecture 10 quaternate P, PromotionsThe communication processoSee chart in lecture notes by ChrisThe promotional mixWhat communication tools are availableAdvertisingVary Expensive (variable_, provides reasons to buy products lock over channel of message freehanded numbers see messageHard to determine response personalised marketingFace-to-faceVery expensive (fixed cost) defy over message (sales people can differ(Targeted receiversImmediate responsesPublic relationsUnpaid, non-personal communication, from trio partyLittle control over messageHighly credible, not seen as self-servingHard to know responsesSales promotionSamples, coupons, rebates76% of marketing expenditures for packaged goodsShort run (decline in advertising efficiency) arrest over message (not build loyalty)Immediate Response damp marketingOver phone, or internet big money or micro, becomes annoying (telemarketers)Control over messageTargeted r eceivedImmediate responses growing the promotional mixIn product life cycle to inform, to persuade, to remindProduct characteristicsLevel of complexityMore complex, more personal sellingPotential guess (financial, social, physical)Greater take chances, more personal sellingAncillary services (service/ support postulate post sale) Advertising establishes reputation forecast marketing can describe customizationPersonal selling builds buyer confidence and provides assure of customer service oKnow your target marketWho is buyer and what is buying behaviourPlace of purchase, reason, how big is market (mass or custom, first time or repeat oDecision stage of buyerSee chart in Chris lecture notesoChannel strategyPush (want channel to sell it, target channel not end consumer) Push product through channel with goal of getting channel members to push it to customers Direct promotional mix to channel members to gain cooperation Personal selling and sales promotions play major roles guide ( channel users want to get it from you, targeted at end consumer more) Product is pulled through channelsDirect promotional mix at final consumers to encourage them to demand product in the first place advertising and direct marketing to reach end consumers Developing, executing and evaluating the integrated marketingcommunications program oCoordinates all promotional activities to provide a consistent message across all touch points oKnow target audience and how to market to themoIMC Program 3 stagesPlanning StageAwareness, interest, evaluation, trial scar budget based offo% of salesCompetitive parityAll you can affordDesign promotion, archive itImplementationExecute the promotion programCarry out promotionControlPost-test the promotionMake needed changesEvaluating IMC big to measure ROIHow many views, traffic to site, coupon redemption rateCan put across during both implementation and controlLecture 11Three options/Modes for exploiting your new product or technology oLicensin gWhen to considerWhen you tire outt have the resources to bring it to market and dont want to develop them When you want to get the technology to market immobile (win standards race) When you want to stop other firms from R&D and patenting Risks well(p) only while you have scientific returnsCreate a standardStay at leading bump intoRequires strong IP protection mutualist on others for market successMay lock you into something when market is still emergent oPartnering (selling a component)When to considerWhen you dont have the resources to bring it to market When you want to get the technology to market fastWhen credible partners can be set and their endorsement sends a signal When you are strategically important to partnerRisksLarger, more established firms can take advantage (price/terms) Partner can deskill youDependent on partnerMarket success and main course to info and managementPartner can become disinterestedoDIY (Do it yourself)When to considerCan bring it to marke t yourself or want to develop capabilities When you have resources to do itUnderstand requirements and behaviour of end consumerWant to brand it with your nameYou have clout with your eco body of playersRisks release edge- rivals learn from your mistakesEffort spent on marketing and distribution makes you lag in R&D stomach nimbleness and speedUnderstand market (buyers, competition and overall market (size and growth) Want to devise an entry strategy to supplement advantagesoEmphasize speed for lead timeProduct, technology, people, partners, locationsSet up intangible entry barriers rather than relying only on proprietary advantage like patents oEmphasize selective focus distinctly defined target market intelligibly defined partners, channels, suppliersPlus allow for experimentAdaptable and liquid resources & capabilities (rent, start or share)Decision depends onWhere you see future of companyStability of persistenceValue to other playersPotential for IP protectionBecomin g a chopine leaderIndustry platform is base technology or service that is demand for a broader, interdependent ecosystem of business Requires innovations to be usefulNo longer beneath full control of originator, may have got propriety elements oNeed to decide if you are going to purse a product or platform strategy oAchieving platform spot requires specific decisions that govern engineering science evolutionProduct and systems designBusiness relationships deep down ecosystemoMany companies dont succeed as they fail to tackle both TechnologyDesigning estimable interfaces, architecture, disclosing IPBusinessMaking key complements, introducing incentives, defeat competing platforms oPlatform potentialMust satisfy two essential conditionsPerform at least one essential function within system of use or solve an essential tech problem in an industry Should be easy to connect to or build upon to expand system of use as well as allow new or even unintentional end usersGoogle is cor ing in internet search. Linus in web server operating systems for tipping. intellect Property ProtectionLegal right granted by a presidential term that allows inventor to preclude others from using the same plan for a maximum of 20 years oNeed to demonstrate that invention is allegoryNot ObviousUseful confidential when the patent application is filedBenefitsBlocks others from using inventionRaises the cost of imitation by rivalsHelps to raise capital by signaling a competitive advantage Helps in negotiating rightsoLimitationsRequires revealing of the invention in all countriesMonopoly is shipboardRivals can often work approximatelyLong, complex, costly to defendCan be irrelevant if technology moves quicklyLecture 12 Business Start UpEntrepreneurship ApproachesCausal Logic (start with goals expect return) survey opportunities on measurable market demand & competition Select option with highest expected returnSpecify resources needed to get the outcome you want or so often us ed in developed, familiar products/marketsMeans-Based (start with mean avoid discharge)Evaluate alternatives based on given set of means + low cost experiments Select option based on affordable loss rather than expected return draw pre-commitments with customers, suppliersMost often used in uncertain products / marketsDealing with UncertaintyEntrepreneurs disassembleaxe a comfortable level of risk and push to increase return oBankers pick a desired level of return and push to reduce risk