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1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy
Major Drivers of the New Economy– Digitalization and ConnectivityDigitalization and Connectivity– Disintermediation and Disintermediation and
ReintermediationReintermediation– Customization and Customization and
CustomerizationCustomerization– Industry ConvergenceIndustry Convergence
1-2Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Table 2-1: Old Economy vs. New Economy
Old Economy New Economy
Organize by product units
Focus on profitable transactions
Look primarily at financial scorecard
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction measurement
Overpromise, underdeliver
Organize by customer segments
Focus on customer lifetime value
Look also at marketing scorecard
Focus on stakeholders
Everyone does the marketing
Build brands through behavior
Focus on customer retention and growth
Measure customer satisfaction and retention rate
Underpromise, overdeliver
1-3Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Figure 2-1: The Supplier-Customer Relationship: Traditional and New Economy Structures
1-4Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy
How Marketing Practices are Changing: Customer Relationship Marketing– Reduce rate of customer defection– Increase longevity of customer relationship– Enhance growth potential through cross-
selling and up-selling– Make low profit customers more profitable
or terminate them– Focus disproportionate effort on high value
customers
1-5Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Mass Marketing vs. One-to-One MarketingMass Marketing vs. One-to-One Marketing
Mass Marketing One-to-One Marketing
Average customer
Customer anonymity
Standard product
Mass production
Mass distribution
Mass advertising
Mass promotion
One-way message
Economies of scale
Share of market
All customers
Customer attraction
Individual customer
Customer profile
Customized market offering
Customized production
Individualized distribution
Individualized message
Individualized incentives
Two-way messages
Economies of scope
Share of customer
Profitable customers
Customer retention
1-6Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
Adapting Marketing to the Adapting Marketing to the New EconomyNew Economy
Four steps for One-to-One MarketingFour steps for One-to-One Marketing
Don’t go after everyone, identify prospects.
Define customers by their needs and their value to the company.
Individual interaction with customers builds stronger relationships.
Customize messages, services, and products for each customer.
1-7Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
PERSONAL SELLING IN INFORMATION AGE
INDUSTRIAL--1950sINDUSTRIAL--1950s
INFORMATION--PRESENTINFORMATION--PRESENT
Evolution from industrial to information economy
1-8Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
SHIFT TO INFORMATION ECONOMY
Advances in transport and manufacturingStrategic resources are capital and natural resourcesProducts and factories define the businessSales success means meeting quotas
Advances in information technologyStrategic resource is information
Business defined by customer relationsSales success depends on adding value
INDUSTRIAL INFORMATION
1-9Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
EVOLUTION OF PERSONAL SELLING
MARKETING ERA 1950s CONSULTATIVE SELLING ERA 1960s-1970s STRATEGIC SELLING ERA 1980s PARTNERING ERA 1990s-Present
1-10Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
MARKETING AND CONSULTATIVE ERAS
MARKETING – Sales team as source of strategic Sales team as source of strategic
information on…product--market--information on…product--market--serviceservice
CONSULTATIVE– Emphasis on need identificationEmphasis on need identification– Transactional sellingTransactional selling– Information sharing & negotiation Information sharing & negotiation
replace manipulationreplace manipulation
1-11Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
STRATEGIC AND PARTNERING ERAS
STRATEGIC – Emphasis on strategic market plan Emphasis on strategic market plan – Tactics to achieve strategic planTactics to achieve strategic plan– Product positioning vital Product positioning vital
PARTNERING– Customer, not product, as driving Customer, not product, as driving
forceforce– Emphasis on strategies that create Emphasis on strategies that create
customer valuecustomer value
1-12Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
PERSONAL SELLING:DEFINITION
PERSON-TO-PERSON COMMUNICATION WITH PROSPECT
– DEVELOPING RELATIONSHIPS– DISCOVERING NEEDS– MATCHING PRODUCTS WITH NEEDS– COMMUNICATION OF BENEFITS– A PROCESS THAT ADDS VALUE
1-13Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
SELLINSELLING G
MODELMODEL
1-14Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
INTERRELATIONSHIP OF BASIC STRATEGIES
1-15Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
EFFECTIVE EFFECTIVE RELATIONSHIP STRATEGY RELATIONSHIP STRATEGY
FOUR KEY GROUPS FOUR KEY GROUPS
1-16Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
E-COMMERCE AND COMPLEX SALE
Complex sales involve several forms of information technology
supportTools include:– electronic product catalogselectronic product catalogs– contact management systemscontact management systems– Internet applicationsInternet applications– presentation packages like this onepresentation packages like this one
1-17Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
VALUE CREATION
Value = creative improvements enhancing customer experience Consumer economy rewards sales people who add value at each stepWhen customer not aware of value added by salespeople – focus may shift to price
1-18Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
RELATIONSHIPS ADD RELATIONSHIPS ADD VALUEVALUE
Customers perceive value added when they feel comfortable with salespersonCertain salesperson traits help create perception of value– AccountabilityAccountability– HonestyHonesty– Sincere concern for customer welfareSincere concern for customer welfare
1-19Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
WIN-WIN PHILOSOPHYWIN-WIN PHILOSOPHY
CUSTOMER SATISFACTION PRIMARY
FIRST STEP IN DEVELOPMENT OF RELATIONSHIP STRATEGY
BOTH PARTIES EXIT SALE FEELING SATISFIED
1-20Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
WIN-WIN vs. WIN-LOSEWIN-WIN vs. WIN-LOSEWIN-WIN TYPES
-- Help others solve their problems
-- Fix what caused the problem
-- Make life joyous for all concerned
-- Learn from past, live in present, set future goals
-- Honor commitments
WIN-LOSE TYPES -- See a problem in
every solution-- Fix the blame
-- Let life happen, are not proactive
-- Live in the past
-- Make promises they never keep
1-21Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
CHARACTER AND CHARACTER AND INTEGRITYINTEGRITY
Character includes high personal standards, integrity, honesty, and moral fiber
Integrity involves achieving congruence between what you know, say, and do
1-22Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
CUSTOMER RELATIONSHIP CUSTOMER RELATIONSHIP MANAGEMENT CRM - MANAGEMENT CRM -
SOFTWARESOFTWARE
CRM enhances relationship qualityPromotes rapid and effective client communication Written records help avoid miscommunication
1-23Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
EVOLUTION OF PARTNERING
Buzzword of 1990s, business reality in 2000s“Strategically developed long-term relationship that solves customer’s problems”Relationship selling relies on customized approach to each clientEnhanced with high ethical standards and sales automation
1-24Vijay Bhandari - Senior Faculty-Consultancy - NMIMS [email protected]
PARTNERING—HIGHEST PARTNERING—HIGHEST FORMFORM
Strategically developed high quality, long-term relationship focusing on solving customer problems
Must be viewed as process, not an event