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Marketing Domains & HR Issues Sanjeev Varshney

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Page 1: Marketing Domains & HR (2)

Marketing Domains & HR Issues

Sanjeev Varshney

Page 2: Marketing Domains & HR (2)

Some of the Issues

• Services Marketing & Relationship Marketing • International/Global Marketing• Development of Channel Partners• B2B Marketing

Page 3: Marketing Domains & HR (2)

Services Marketing

Page 4: Marketing Domains & HR (2)

Definition of Services

Identifiable, intangible activities

that are the main objectof a transaction

designed to provide want-satisfaction to customers

Identifiable, intangible activities

that are the main objectof a transaction

designed to provide want-satisfaction to customers

Supplementary Services

support the sales of a good or service

Supplementary Services

support the sales of a good or service

Page 5: Marketing Domains & HR (2)

Goods-Services Continuum

Page 6: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Services Marketing Differs from Product Marketing

Factors Affecting Product Diffusion

Intangible

Inseparable

Variable

Perishable

Page 7: Marketing Domains & HR (2)

Progression of Economic Value | Commodity->Experience

Pricing Market Premium

StageExperience

Deliver Service

MakeGoods

Extract Commodities

Competitive Position

Undifferentiated

Differentiated

Discussion: Where do you think do MFL brands figure in the economic value chain?

Page 8: Marketing Domains & HR (2)

Managing Service Quality

Compared toExpectations of the customer

How work wasperformed

Quality is defined by the customer

Helpformulateexpectations

Measureexpectationlevel

Service qualityat or aboveexpectation

Page 9: Marketing Domains & HR (2)

Providing Great Service: The Gaps Model

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Service Gap

Knowledge Gap

Customer Expectation for service Quality

Mgmt perceptions of customer expectations

Standards specifying service to be delivered

Actual service Delivered

Customer perception of service quality

Retailer Communications about service quality

Standards gap

Delivery Gap

Communications Gap

Page 10: Marketing Domains & HR (2)

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

Page 11: Marketing Domains & HR (2)

Consumer Satisfaction an Overview

• It is the consumers fulfillment response (complete Consumption Experience)–Satisfaction with events that happen during consumption–Satisfaction with final outcomes–Satisfaction 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.

Page 12: Marketing Domains & HR (2)

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

Page 13: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Delivery Gap: Delivering Service Quality

Reduce Delivery Gaps

Empowering Employees

Use of Technology

Provide Support & Incentives

Page 14: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Service Recovery

Increase Service Recovery

Listening to Customers

Resolving Problems Quickly

Providing a Fair Solution

Page 15: Marketing Domains & HR (2)

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

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What is Relationship Marketing ?

Page 17: Marketing Domains & HR (2)

The Shift from Transaction-Based Marketing to Relationship Marketing

• Transaction-based marketing– Buyer and Seller exchanges characterized by

limited communications and little or no ongoing relationship between the parties

• Relationship marketing– Development and maintenance of long-term,

cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit

Page 18: Marketing Domains & HR (2)

Comparing Transaction-Based Marketing and Relationship Marketing Strategies

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Key to Relationship Marketing

• Internal marketing– Managerial actions that help all members of the

organization understand and accept their respective roles in implementing a marketing strategy

• Employee satisfaction

Page 20: Marketing Domains & HR (2)

Basic Foundations of Relationship Marketing

• Making promises

• Enabling Promises

• Keeping Promises

Page 21: Marketing Domains & HR (2)

The Relationship Marketing Continuum

• First Level: Focus on Price

• Second Level: Social Interactions

• Third Level: Interdependent Partnerships

Page 22: Marketing Domains & HR (2)

Three Levels of Relationship Marketing

Characteristic Level 1 Level 2 Level 3

Primary bond Financial Social Structural

Degree of customization

Low Medium Medium to high

Potential for sustained competitive advantage

Low Moderate High

Examples American Airlines’ AAdvantage program

Harley-Davidson’s Harley Owners Group (HOG)

Federal Express’ PowerShip program

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Building Buyer-Seller Relationships

• Many customers are seeking ways to simplify their lives, and relationships provide a way to do this

• Customers find comfort with brands that have become familiar through their ongoing relationships with companies

• Such relationships often lead to more efficient decision-making by customers and higher levels of customer satisfaction

Page 24: Marketing Domains & HR (2)

Relationship Marketing : Database Marketing

• Record consumer transactions and behaviour• Observe trends and classify customers into groups• Select the best customers or groups (remember 80:20

principle)• Calculate the life time value of their business• Create a meaningful dialogue that builds a genuine

loyalty• Use this to increase share of wallet/bill value/cross-

sell and up-sell or even increase Positive word of mouth and frequency of visit

Page 25: Marketing Domains & HR (2)

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

Page 26: Marketing Domains & HR (2)

Components of CRM Framework

• Operational CRM– Involves front office customer touch points and focuses on

capturing information– Back end of this plugs into ERP systems and supply chain

management software• Analytical CRM

– Works on data collected from operational CRM to understand consumer behavior better

– Involves data warehousing and data mining• Collaborative CRM

– Facilitates interactions between customers and companies and between members of the company

Page 27: Marketing Domains & HR (2)

Benefits of CRM• Helps to manage customer expectations

– Increasing affluence– Greater awareness– Customer diversity

• Better technological advances• Reduces organizations dependence on

periodic surveys to gather data• Service Benefits of CRM: most customers do

not complaint5% 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

Page 28: Marketing Domains & HR (2)

THE CRM Strategy

• CRM aims at integrating the front end customer facing systems with the back-end systems

• Involves top management along with all functional areas.• Looks for customer oriented solution• Requires change management• Generally done via means of implementation team drawn

from all the functional areas.• Important to involve team motivation and training.

Page 29: Marketing Domains & HR (2)

CRM & Sales force Management

Sales force Management

CRM

Campaign management

Customer management

Page 30: Marketing Domains & HR (2)

Sales Management

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Scope of Sales Management

• Personal Selling (industrial as well direct)• Channel Sales Force management

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Roles of a Sales Manager

• Playing a strategic role• Working as a member of the corporate team• Working as a Team Leader• A supervisor and a motivator• Managing multiple sales channels• Build Buyer-seller relationships through technology• Managing Information

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Shopper may or may not consume the product

Role of Sales Force

Sales Force Brand

Management

Retailer

Shopper (one who involves

in the act of purchase and

buys

Consumer (one who identifies

the need and decides

about the product)

Page 34: Marketing Domains & HR (2)

Emerging Trends in Sales Management

• Global Perspective• Technology Revolution• CRM• Sales force Diversity• Team selling approach• Managing Multi-channels• Partner Relationship Management• Ethical and social issues• Sales Professionalism

Page 35: Marketing Domains & HR (2)

Need for Change

• Increase the base of the customer and build relationships

• Tap the Potential of the sales person• Improve the level of engagement of the sales

person

Page 36: Marketing Domains & HR (2)

Operational Decisions in Sales Management

• Sales Force Recruitment• Territory Design• Target Setting• Sales force Motivation• Managing the Channel• Performance Evaluation and designing the career path• Training and developing the sales force

Page 37: Marketing Domains & HR (2)

Personal Selling as Promotion

Flexible

Costly

Difficult toattract quality

people

Minimizewaste

Focused

Goal issale

Page 38: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Personal Selling and Marketing Strategy

• Can customize the message for a specific buyer

• Assists in creating strong supply chain relationships

• Increased customer loyalty through relationship selling

• Gather research input from customers

• Crucial to the success of CRM

Page 39: Marketing Domains & HR (2)

When Personal Selling is Used

MARKET

Concentrated:

Geographically

In few industries

In several

large customers

PRODUCTValue not apparent

High unit cost

Technical

Requires demonstration

Fitted to customer’s need

Introductory stage

of the Product Life Cycle

Page 40: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Value Added by Personal Selling

Salespeople educate and provide advice

Salespeople save time and simplify buying

Page 41: Marketing Domains & HR (2)

Changing Patterns in Personal Selling

Automation

TelemarketingRelationship

Selling

InternetSelling

Page 42: Marketing Domains & HR (2)

Staffing and Operating a Sales Force

Recruitment & Selection

Assimilation

Training

Motivation

Compensation

Supervision

Performance Evaluation

Market Potential Estimation

Work Load Analysis

Man Power Planning

Page 43: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Recruiting and Selecting Salespeople

• Personality• Optimism• Resilience• Self-motivation• Empathy

Page 44: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Training

• All sales people benefit from training about: – Selling and negotiation

techniques– Products and service

knowledge– Technologies used in the

selling process– Time and territory

management– Company policies and

procedures

Page 45: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Motivating and Compensating Salespeople

Financial rewards Nonfinancial rewards

Page 46: Marketing Domains & HR (2)

Objective of compensation componentsS.No. Component Objective

1 Salary • Motivate effort on non-selling activities• Adjust for differences in territory potential• Reward experience and competence

2 Commissions • Motivate a high level of selling effort• Encourage sales success

3 Bonuses • Direct effort towards Strategic objectives• Provide additional rewards for top

performers• Encourage sales success

4 Sales Contests • Stimulate additional effort targeted at specific short term objectives

5 Benefits • Satisfy sales people security needs• Match competitive offers

Page 47: Marketing Domains & HR (2)

Proportion of Salary S.No. Condition Lower Higher

1 Importance of Sales persons skills considerable Slight

2 Reputation of sales person’s company Little known Well known

3 Company’s reliance on advertising and other sales promotion activities

little Much

4 Competitive advantage of product little Much

5 Importance of providing customer service slight Considerable

6 Significance of total sales volume as a primary selling objective

greater Lesser

7 Incidence of technical or team selling little much

8 Importance of factors beyond the control of salesperson

slight considerable

Page 48: Marketing Domains & HR (2)

Generalized Framework for Compensation Package

Sales Response function (product type/ market conditions

Market development required

No market Development required

Sales is an individual activity

High competition 50% fixed and 50% slab system

25% fixed and 75% variable

Medium Competition

75% fixed and 25% bonus

50% fixed and 50% variable

Low Competition Fixed Fixed

Sales is a group activity

Fixed plus productivity based bonus

Fixed

Page 49: Marketing Domains & HR (2)

PLC & Compensation

• Introduction: A large fixed salary plus large variable component

• Growth: A large fixed salary plus small variable component

• Maturity: A small fixed salary plus large variable component

• Decline: A large fixed component plus very large variable component

Discuss the Issues

Page 50: Marketing Domains & HR (2)

Caselet 1• A Company is in the business of biscuits and snacks. It has a wide range of

products and has been adding atleast 1-2 new products each year. However, in the process sale of its oldest and the largest selling brand xyz has stagnated. Research reports reveal that this stagnation is due to the lost interest of the sales man in the product and the pressure and incentives for every new launch. This brand of the company comprises 18% of the companies turnover and is the market leader in the category. Therefore management has fixed following incentive plan for its salesforce to boost the sale of its oldest products:For meeting the overall monthly sales targets: 0.1% of total sales made by the salesmanFor selling xyz brand more than the designated targets (this month targets were also fixed for this brand by taking average of the last one year): 0.2% of extra sales made for this product over and above the average

Questions: 1. what do you expect would be the result of this incentive plan2. What are the expected consequences3. What is wrong with this incentive plan

Page 51: Marketing Domains & HR (2)

Case Let 2• Suggest a Sales Incentive plan for Star Sky Ltd. A company in the business

of selling satellite TV connections. Product is new to India. There is only one competitor in the market, Box TV operating since last 2 years. Star Sky has been launched only 6 months ago. Most of the market today is dominated by Cable people. Rates being charged vary across markets and the reception quality being given by them is bad.Product Costs has following components:Set-top box charges: Rs. 3000/-Installation charges: Rs. 1000/-Monthly rental: Rs 300/-

Immediate objective of the company is market penetration and increasing the number of such connections many fold

Page 52: Marketing Domains & HR (2)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluating Salespeople

• Tied to the reward structure

• Evaluation measures can be either objective or subjective

Page 53: Marketing Domains & HR (2)

Some of the Common Evaluation Criteria

• Quantitative– Sales volume– Debtors control– Territory development

• New outlets• Length and breadth of goods in each outlet

– Promotion/ Publicity– Market Feedback

• Qualitative– Adherence to company norms, reporting etc.– Relationship with dealers– Innovativeness, sincerity and diligence

Page 54: Marketing Domains & HR (2)

Framework for Identifying the Evaluation Criteria

Market Condition (Product Life Cycle)

Search attributes (eg: non durables)

Experience attributes (eg: durables)

Credence attributes (eg: Services)

Introductory Displays organised

Demonstration Trials, and number of calls

Growth Phase (Low competition)

New retail outlets opened and Sales

New service outlets

Number of calls

Maturity phase (high competition)

Market share Sales Customer base

Page 55: Marketing Domains & HR (2)

7 Step Selling Process in Retailing

1. Planning and Preparation2. Opening the Call3. Outlet Check and Housekeeping4. Persuasion and Objection Handling5. Closing6. Merchandizing7. Administration

Page 56: Marketing Domains & HR (2)

International Marketing

Page 57: Marketing Domains & HR (2)

Factors Affecting International Trade

TechnologyConsumer Preferences

Trade Barriers

Subsidized IndustriesTax Structure

Marketing Capability

Page 58: Marketing Domains & HR (2)

Strategic Planning for International Marketing

RegionalStrategy

LocalStrategy

Global Strategy

Page 59: Marketing Domains & HR (2)

Structures for Operating in Foreign Markets

Exporting Directly, or through Import-Export Middlemen

Company Sales Branches

Licensing Foreign Producers

Contract Manufacturing by Foreign producers

Joint Ventures & Strategic Alliances

Wholly Owned Subsidiaries

MNC’s

Low Involvement Abroad

High Involvement Abroad

Page 60: Marketing Domains & HR (2)

Designing the Marketing Mix

Advertising

Pricing

Distribution Systems

ProductPlanning

Market Research

Page 61: Marketing Domains & HR (2)

International Product & Communication Strategies

Do Not Change Product

Adapt product Develop New product

Do Not Change Communications

Straight extensions

Product Adaptation

Product Invention

Adapt Communications

Communication Adaptation

Dual Adaptation

Product

Communications

Page 62: Marketing Domains & HR (2)

Organizational Issues in International Markets

• Issue of centralization versus decentralization in terms of marketing strategy and policies

• Roles and responsibilities of sales and marketing people working at different level

• Reporting structures• Issues of coordination and control• Localization vs. Globalization

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Channel Partners Management

Page 64: Marketing Domains & HR (2)

Channel Partners Management

• Focus on relationship marketing • Focus on building capabilities• Focus on Value Chain

Page 65: Marketing Domains & HR (2)

Some of the Developments

• Collaborative Planning• Recruitment of sales people• Sales People Management • Performance Evaluation• Maintaining Infrastructure• Enhancing Capabilities• Managing attrition• Documentation of Process

Page 66: Marketing Domains & HR (2)

Resource management at Partner level

• Who controls HR processes and systems at distributor level ?

• Sales force management at Distributor/ dealer level

• Means of compensating distributor sales force (In-particular minimum guarantee clause)

• Reporting structures• High attrition at distributor level

Page 67: Marketing Domains & HR (2)

B2 B Marketing/Marketing of Professional Services

Page 68: Marketing Domains & HR (2)

What Business You are Into

You are in the business of creating Value for your customer and for your

Organization

Page 69: Marketing Domains & HR (2)

Business in a Professional Firm

Page 70: Marketing Domains & HR (2)

Effective Marketing of Professional Services

Knowledge

•Convincing clients to outsource certain tasks•Identifying new service needs

Relationship Competence

• People Business: Creation of a personal level

• Continuity of contact persons

Reputation

•Multiplication of successful projects•Use of the strong networks between clients

What do you Need for Effective Marketing of Professional Services ?

Page 71: Marketing Domains & HR (2)

Different Level of Marketing In Professional Firms

• Contact Marketing• Credibility Marketing

• Corporate Level Marketing

Page 72: Marketing Domains & HR (2)

Knowledge Management for Better Client Service

Technical Knowledge Knowledge

about Customers

Industry (Profession)

Organization (Professional Service Firm)

Individual Profession)

Page 73: Marketing Domains & HR (2)

Knowledge Management for Client Servicing

Codification

People to Document

Explicit Knowledge

Very High

Exploitation

Personalisation

Person to Person

Implicit Knowledge

Small

Exploitation

Options of Strategic KM

KM approach

Type of Knowledge

Leveraging Knowledge

Focus of Org. Learning

Standardisation Individualisation

Page 74: Marketing Domains & HR (2)

Aspects in Organisational Procurement

• Multi-personality: The involvement of several people in the selection process

• Rationality: The attempt to actively generate an objective general view by systematically gathering information

• Multi-organization: Involvement of third organizations – like banks or professionals– in the procurement decision

• Interaction: Regular and intensive contact for the exchange of information and agreement on common and performance objectives

Page 75: Marketing Domains & HR (2)

Rules in Organisational Procurement

• High degree of insecurity in connection with the procurement decision has to be reduced.

• The way professionals understand an issue is also of major importance, since it helps to offer a tailor-made approach to tackle a specific client problem.

• Close connection of the service with the implementing professional.

Page 76: Marketing Domains & HR (2)

Marketing Tools

• First Team Activities (Seminars, publications in professional journals and own market research)

• Second String (Networking with potential recommenders, newsletters and voluntary work)

• Clutching on Straws (Direct Mail cold call etc.)• Its all about reputation management (personal

and corporate)

Page 77: Marketing Domains & HR (2)

Issues

• Transference of Trust• Lack of Networking competence among staff

I have employed people who have been sent out to get those referral bases in. Some of them can't do it. Some of them don't want to do it. Yet they are really good at seeing clients, but they don't want to take it that step further and go out and actively get work.

• Hesitancy of Owner Managers to let goI'm going through a period of frustration at the moment, because on the

one hand I'm the sort of person that likes to be involved at all levels, but when you pass on responsibility and delegate to other people, you have to let go ... I'm really delegating job satisfaction.

• Reluctance of staff in taking up networking responsibilities• Need to match staff to clients/customers

Page 78: Marketing Domains & HR (2)

Networking

• “The concept of networking as an informal, everyone-does-it, almost as a human need that you find in all relations and on all levels, that is the relationships that we build on”.

• “Networking is not always a conscious decision it sometimes happen, 70% of the time, subconsciously. You do network; you network all the time. You may not do it consciously.”

Page 79: Marketing Domains & HR (2)

Essence of Marketing

Engagement

Page 80: Marketing Domains & HR (2)

All the Best

sanjeev [email protected]