Marketing Issues for HR
Marketing Domains & HR Issues Sanjeev Varshney
Some of the IssuesServices Marketing & Relationship Marketing International/Global MarketingDevelopment of Channel PartnersB2B Marketing
Definition of ServicesIdentifiable, intangible activities
that are the main objectof a transaction
designed to provide want-satisfaction to customersSupplementary Services
support the sales of a good or service
2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinServices Marketing Differs from Product MarketingFactors Affecting Product DiffusionIntangibleInseparableVariablePerishable
6This graph sets up the following discussion; if you wish to shorten this presentation, simply review these differences. The next slides go into greater detail.
Progression of Economic Value | Commodity->ExperiencePricing MarketPremiumStageExperience Deliver Service MakeGoods Extract CommoditiesCompetitive Position UndifferentiatedDifferentiatedDiscussion: Where do you think do MFL brands figure in the economic value chain?
Managing Service QualityCompared toExpectations of the customerHow work wasperformedQuality is defined by the customer
Service qualityat or aboveexpectation
Providing Great Service: The Gaps Model 2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinService GapKnowledge GapCustomer Expectation for service QualityMgmt perceptions of customer expectationsStandards specifying service to be deliveredActual service DeliveredCustomer perception of service qualityRetailer Communications about service qualityStandards gapDelivery GapCommunications Gap
9This slide sets up the discussion that follows and can be used as the basis for a shorter discussion.
Understanding Customer Expectations 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Expectations are based on knowledge and experience
Expectations vary according to type of service
Expectations vary depending on the situation
10Ask students: What are your expectations of the service provided by these two businesses. Will there be price differences? In what circumstances would you stay at each property?
Consumer Satisfaction an OverviewIt is the consumers fulfillment response (complete Consumption Experience)Satisfaction with events that happen during consumptionSatisfaction with final outcomesSatisfaction with level of satisfaction received
It is a judgment that a product or service feature, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulfillment, including levels of under-or overfulfillment.
Evaluating Service Quality 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reliability: The ability to perform the service dependably and accurately Responsiveness: The willingness to help customers and provide prompt service Assurance: The knowledge of and courtesy by employees and their ability to convey trust and confidence Empathy: The caring, individualized attention provided to customers Tangibles: The appearance of physical facilities, equipment, personnel and communication materials
12Class activity. Tell students: Assume you are expecting an important package from UPS. A delivery attempt was made, but you didn't hear the door bell, and missed it. You call the customer service line and they tell you not to worry, and that one of your options is to pick up the package at the terminal that evening. You tell them that you need the package before noon. So, they arrange for you to meet the delivery truck close to your house. You are delighted when you spot the clean brown UPS truck exactly where it is supposed to be. The friendly driver greets you by name, gets your package and you are on your way.Ask the students: which of the service building blocks of customer service applies to each aspect of this scenario
2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinThe Delivery Gap: Delivering Service Quality
Reduce Delivery GapsEmpowering EmployeesUse of TechnologyProvide Support & Incentives
13This slide again sets up the following discussion, which you may omit if you prefer to focus just on these dimensions.
2007 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinService RecoveryIncrease Service RecoveryListening to CustomersResolving Problems QuicklyProviding a Fair Solution
14This slide sets up the following discussion and can be used instead of the more detailed discussion that follows.
HR issues in Services Sector What is the crux of Customer satisfaction ?How many to hire (capacity problem for effective and efficient servicing) and of what quality(competencies)?What process to follow (what is the right process to prove good quality service? How to standardize functioning of employees (Benchmarking)How to train and on what to train the employees?How to control and check for performance and working of employees?Empowerment to what extent ?Motivation and Reward
What is Relationship Marketing ?
The Shift from Transaction-Based Marketing to Relationship Marketing Transaction-based marketingBuyer and Seller exchanges characterized by limited communications and little or no ongoing relationship between the partiesRelationship marketingDevelopment and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit
Comparing Transaction-Based Marketing and Relationship Marketing Strategies
Key to Relationship Marketing Internal marketingManagerial actions that help all members of the organization understand and accept their respective roles in implementing a marketing strategyEmployee satisfaction
Basic Foundations of Relationship Marketing Making promises
The Relationship Marketing ContinuumFirst Level: Focus on Price
Second Level: Social Interactions
Third Level: Interdependent Partnerships
Three Levels of Relationship MarketingCharacteristicLevel 1Level 2Level 3Primary bondFinancialSocialStructuralDegree of customizationLowMediumMedium to highPotential for sustained competitive advantageLowModerateHigh
ExamplesAmerican Airlines AAdvantage programHarley-Davidsons Harley Owners Group (HOG)Federal Express PowerShip program
Building Buyer-Seller RelationshipsMany customers are seeking ways to simplify their lives, and relationships provide a way to do thisCustomers find comfort with brands that have become familiar through their ongoing relationships with companiesSuch relationships often lead to more efficient decision-making by customers and higher levels of customer satisfaction
Relationship Marketing : Database MarketingRecord consumer transactions and behaviourObserve trends and classify customers into groupsSelect the best customers or groups (remember 80:20 principle)Calculate the life time value of their businessCreate a meaningful dialogue that builds a genuine loyaltyUse this to increase share of wallet/bill value/cross-sell and up-sell or even increase Positive word of mouth and frequency of visit
Customer Relationship Management The combination of strategies and tools that drive relationship programs, re-orientating the entire organization to a concentrated focus on satisfying customers
Managing Virtual Relationships
Retrieving Lost Customers
Components of CRM FrameworkOperational CRMInvolves front office customer touch points and focuses on capturing informationBack end of this plugs into ERP systems and supply chain management softwareAnalytical CRMWorks on data collected from operational CRM to understand consumer behavior betterInvolves data warehousing and data miningCollaborative CRMFacilitates interactions between customers and companies and between members of the company
Benefits of CRMHelps to manage customer expectationsIncreasing affluenceGreater awarenessCustomer diversityBetter technological advancesReduces organizations dependence on periodic surveys to gather dataService Benefits of CRM: most customers do not complaint
5% increase in retention had impacts as high as 95% on the net present value delivered by customersRepeat customers generate twice as much gross income as new customers
THE CRM StrategyCRM aims at integrating the front end customer facing systems with the back-end systemsInvolves top management along with all functional areas.Looks for customer oriented solutionRequires change managementGenerally done via means of implementation team drawn from all the functional areas.Important to involve team motivation and training.
CRM & Sales force Management Sales force Management CRMCampaign management Customer management
Scope of Sales ManagementPersonal Selling (industrial as well direct)Channel Sales Force management
Roles of a Sales ManagerPlaying a strategic roleWorking as a member of the corporate teamWorking as a Team LeaderA supervisor and a motivatorManaging multiple sales channelsBuild Buyer-seller relationships through technologyManaging Information
Shopper may or may not consume the product
Role of Sales ForceSales Force Brand Management Retailer
Shopper (one who involves in the act of purchase and buysConsumer (one who identifies the need and decides about the product)
Emerging Trends in Sales ManagementGlobal Per