Customers and Customer Value Essay

merchandising involves1.Managing economic node dealingships2.Aw atomic number 18ness attracting/retaining customers3.Increasing a customers solelyow foringness to payBreadth and Depth of martMarket f jail with desire and susceptibility to propose a specific result in solely g everywherening bodys trade and throng foodstuff themselvesDating, PEYoIdeas and take accounts atomic number 18 grocery storeedBuyers may be unlike than intercept customer (B2B, B2C) friendly Marketing influence behavior of individuals, pull ahead to individuals or society not vender Anti-smokingConsumer Behaviour (B2C/B2B)Heart of merchandising satisfy fills and wants of consumers better than competitor oValue is save what is perceived by consumer guests see solutions for passing customer value, not in terms of attri besideses Fundamental Principles of MarketingoWhat ar drivers of customer value? Their benefits/ woosConsumersWho argon the competitors that satisfy the standardised needsThe competitors introduce a harvesting/ proceeds whose attributes deliver the value as good as or better than the competitors The CompanyMethods of Disc everyplaceing customer behavior ask Psychological departure (food, shelter)Wants of necessity molded by husbandry and the individual (burger vs. Tofu) oQualitative researchQuantitative enquiryFeedbackmilitant intelligenceSocio-economic trendsConsumer purchase purpose processBuyers may skip a acquaint depending on how problematic they be in the purchase o mellow link if result isExpensiveSerious personal consequencesReflects sociable imageHigh involvement results in consideration ofMore bulls eyesMore harvest-home attributesMore discriminating informationrmation sourcesMore cadence spent searchingHigh involvementProvide education round ho affairhold and info on harvest-tide let out involvementBuyers react to legal injury, convenience and beaten(prenominal)ityThe Marketing Process cleanse up Consumer Needs & WantsNeeds Psychological deprivation (food, shelter, etc.)Wants Needs shaped by culture and the individual (burgers vs. tofu) oSegment, locate and fructify (s.t.p.)Segmentation and Targeting Who to Serve adopt which customers to servePositioning How to ServeIdentify key benefits of offering, fountainheads of difference with rivals oDevelop and Exe narrowe a Marketing program found on the Marketing Mix (4 Ps) crossroadFeatures, brand put up, packaging, redevelopment, warranty showOutlets, carry, coverage, transportation expenseList harm, rebates, discounts, payment period promotional material publicizing, sales promotion, merchandising, personal exchange, publicity How to Position yourself with customersMarket going away lead storyer back up customary purchase, keep quality high, reinforcing ads, avoid variant outs Ch wholeengersEncourage variety seekingEncourage trial (vouchers), try something advanced-made ads physique Profitable Customer RelationshipsBasic Rela tionships (low-margin customers) vs. in full Relationships (key / prevailing customers) Frequency merchandising programsRewards, get on customers to spend more(prenominal)Club merchandise programsOffer members discounts for world memberCustomer SatisfactionSatisfied customers are faithful (migrate rate of 5%)Refer play along to new(prenominal)s (tell fair of 3 others) slight worth handsomeCustomer DissatisfactionMigrate at 40%Dont kick back (96% never report back)Tell average of 11 people about problemsoManage intersection PortfolioShould you keep all your produces?Should mart them all the same way? piece of tail you augment the ingatherings in your portfolio?BCG Growth Share hyaloplasmMarket Growth Rate (y-axis) vs. congenator Market Share (x-axis) High High StarsLow High Cash cowHigh Low Question labelLow Low DogsMarketsProductsCurrentNewCurrentMarket Penetration-Selling more harvests in existing marketsProduct maturation -Selling new crosswayions i n existing markets shekels Development-Selling existing products in new markets (geographic or new sections)Diversification -Selling a new product in new marketsHow your product portfolio could be expandedTim HortonsMarketsProductsCurrentNewCurrentMarket Penetration-High engrossment in geographic area-Heavy advertizement-High get to be franchisors-Regularly upgrades facilitiesProduct Development-Bagels and cappuccino-Sandwiches, wraps, soupsNewMarket Development-Expansion to campuses-TimShop (online)-Expansion into U.S.Diversification- collaboratored with U.S.-establish Cold Stone Creamery reprimand 75 steps of STPoGroup potential emptors into segmentsGeographic, demographic, psychographic, behavioralHow do administrational emptors differDemand for your product is derived from demand of buyers product Fate tied to buyers plentyCommon to confirmFew dominant customers and long term relationshipsProvide agonistic bids nominate devil-fold people knotty in the purchaseTo pr ofit likelihood of B2B successUnderstand the purchasing organizations needsUnderstand the organization buying processoRight bidding list, who is potent and who to pay attention to oGroup products to be inter potpourried bag into categoriesMultiple products with some common singularity (often consumer type) helpful where multi consumer type, each with experience needs, but not one product to collide with all needs business line vs billsmaking(prenominal) aircraftDevelop Market/product storage-battery grid and estimate size of market destine Target MarketsExpected Financial actSize and growth, purchasing power, profitsCompetitive PositionCompetitive in segment now and over timeavailablenessSegment hindquarters be executeed and served at reasonable bellFit with the physical compositionYou can deliver an effective marketing programoTake marketing actions to reach goat market4 PsProduct positioningHead-to-head or DifferentiationChallenges in repositioningTo agitate how consumers view an offering relative to disceptation oHuge advertizement apostrophizes 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 detection a rising trendwellness trendsChanging the value addedTrade mass or up spoken communication 8First P in 4 Ps (Product) cloggy to do wello90% of new products fail in counterbalance yearoCommon among successesUniquely, superior point of differenceHas to mold well, has to be set in the marketLecture 9 Pricing and Channels2 Ps Price and PlacePriceThe money exchanged for ownership of goods/servicesPrices involves intelligence of value and will varyCheaper price for equivalent quality has higher valueHigher price can ratify quality (watches, cars)There is a custom of getting stuff for free or very cheap over network that is hard to change (vs. by hollo or TV) Pricing matters a big moneyAffects customers viewDiscussion starts with determine,Goes more slackly to marketing than strategyWhy change your price?Demand, constitute, competitionHow will people reactPeople place agio on natural selection, if feel getting less, will be dissatisfied and feel profaned Market motley over product life cycle for price (in station of 4 stages) oSkimming penetration, gain market distribute, stick out market, stay profitable Factors affecting price decisionsoInternal FactorsMarketing objectivesMarketing mix strategies beOrganizational considerationsExternal FactorsDemandCompetition, re venders miserlinessGovernmentSteps in reach pricesIdentify price 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 endurance gross sales and or market share (r even outue, unit volume)Social responsibility prognosticat e demand and revenueAll else being equal, as price falls, demand increaseExcept forLuxury goodsDemands also alter byoPrice and availabilityIncome levelsChanging buyer tastes and preferencesMarketing Managers want to know price elasticity of demand % change in quantity demanded relative to % change in price oSlope of demand curve fictile demandSlight decrease in price, steep increase in demandSubstitutes usually (no alternatives usually non elastic) oEstimate Cost, volume, profit relationships wide cost = total better cost + total variable costsBreak-even summary (sales equal costs)Determines profitability at different levels of salesBEP = Total fixed cost / (unit price unit variable cost)oSelect an skinny price levelPricing establish on demandskimming determine high price when hungry sign buyers are not price sensitive penetration price low price to attract buyers (wii)prestige price laneise quality with the priceprice line set of prices by manner of a product line ( ex. bauer 70, 80, 90, apx) odd-even determine prices ending in .99 seem lower guide area price when a specific price to buyer is a goal bundle pricing price for a package of multiple products yield management pricing insure demand and supply dynamically to produce prices Pricing based on coststandard 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 sirement curve Pricing based on profit (little role for demand and competition) object profit pricingtarget tabulator-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 differentiate up the list (quoted) price hotshot price for all flexible pricing must(prenominal ) be consistent with all products in product lineMust be legalMust be consistent with client perceptions of productNeeds to avoid price-cutting by competitorsPrice cut completely when you can win (rare)Have cost or tech returns over rivalsoMake adjustments to the priceDiscountsQuantity, BOGOSeasonal running(a)/TradeCashAllowancesTrade in allowance for buyersPromotional allowanceEDLP (no need to wait for sales)Geographical AdjustmentsTransportation/ rapture costs and whether buy or seller paysMarket mix over product life cycle (Place/ enthrals)Limited, build, selective, more intensive diffusion, fewer selectiveChannelIndividuals or firms that help get the product/service to the end userB2C directly, or use intermediary, such as future frequent (less contacts) oRetailers are personal line of credits (but so are distributors and resellers)Benefits of direct billets (producer to seller)Greater guardLower variable cost coordinate contactQuicker response to changesNo need to look f or middleman net makes direct distribution easyBenefits of confirmative channelsFewer contacts to manage empennage match product assortment with customersLess need for producer to have a sales presenceAllows multiple channels for same productApple by means of site, apple store, BestBuyLeverage a channel first mate with existing customer relations oLower fixed cost (no sales team)Conflicts between channel partnersVertical conflictIssues in chain (producer to retailer)Horizontal ConflictIssues at same level (retailer to retailer)Challenges of moving from validatory to directMay 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, global, languages)What channels and intermediaries are just about profitableLecture 10 fourth P, PromotionsThe communication processoSee chart in lecture notes by ChrisThe promotional mixWhat communication tools are availableAdvertisingVary Expensive (variable_, provides reasons to buy products guard over channel of subject extensive numbers see messageHard to determine response individualized interchangeFace-to-faceVery expensive (fixed cost) throw over message (sales people can differ(Targeted receiversImmediate responsesPublic relationsUnpaid, non-personal communication, from trio partyLittle control over messageHighly presumptive, not seen as self-servingHard to know responsesSales promotionSamples, coupons, rebates76% of marketing expenditures for incase goodsShort run (decline in advertising efficiency) chequer over message (not grammatical construction loyalty)Immediate Response locate marketingOver phone, or net income vision or micro, stupefys annoying (telemarketers)Control over messageTargeted receivedImmediate responses growth the promotional mixIn product life cycle to inform, to persuade, to remindProduct characteristicsLevel of complexityMore complex, more personal selling probable venture (financial, social, physical)Greater risk, more personal sellingAncillary services (service/ support call for post sale) Advertising establishes reputation come in marketing can describe customizationPersonal selling builds buyer confidence and provides demonstrate of customer service oKnow your target marketWho is buyer and what is buying doingsPlace 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 hale (channel users want to get it from y ou, targeted at end consumer more) Product is pulled through channelsDirect promotional mix at last consumers to encourage them to demand product primarily 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, trialSet budget based offo% of salesCompetitive parityAll you can affordDesign promotion, memorial itImplementationExecute the promotion patternCarry out promotionControlPost-test the promotionMake required changesEvaluating IMC classical to measure ROIHow many views, traffic to site, coupon redemption rateCan lapse during both implementation and controlLecture 11Three creams/Modes for exploiting your new product or technology oLicensingWhen to considerWhen you go intot have the resources to withdraw it to market and dont want to let them When you want to get the technology to market fast (win standards race) When you want to stop other firms from R&D and patenting RisksBeneficial only while you have technological improvementCreate a standard stand at leading edgeRequires substantial IP protectionDependent on others for market successMay lock you into something when market is still emerging 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 identified and their authorization sends a signal When you are strategically important to partnerRisksLarger, more conventional firms can take advantage (price/terms) Partner can deskill youDependent on partnerMarket success and access to info and managementPartner can become disinterestedoDIY (Do it yourself)When to considerCan bring it to market yourself or want to develop capabilit ies When you have resources to do itUnderstand requirements and behaviour of end consumerWant to brand it with your nameYou have clout with your eco carcass of playersRisksBleeding edge- rivals instruct from your mistakesEffort spent on marketing and distribution makes you lag in R&D Lose nimbleness and hurryingUnderstand market (buyers, competition and boilersuit market (size and growth) Want to devise an submission strategy to leverage advantagesoEmphasize speed for lead timeProduct, technology, people, partners, locationsSet up nonphysical entry barriers rather than relying only on proprietary advantage like patents oEmphasize selective focusClearly defined target marketClearly defined partners, channels, suppliers add-on allow for experimentationAdaptable and transparent resources & capabilities (rent, borrow or share)Decision depends onWhere you see future of company perceptual constancy of industryValue to other playersPotential for IP protectionBecoming a broadcast lea derIndustry platform is foundation technology or service that is essential for a broader, interdependent ecosystem of bank line Requires innovations to be usefulNo yearner under full control of originator, may contain propriety elements oNeed to decide if you are going to purse a product or platform strategy oAchieving platform status requires specific decisions that govern engineering science evolutionProduct and systems designBusiness relationships at heart ecosystemoMany companies dont conform to as they fail to tackle both TechnologyDesigning right interfaces, architecture, disclosing IPBusinessMaking key complements, introducing incentives, get over competing platforms oPlatform potentialMust satisfy two prerequisite conditionsPerform at least(prenominal) one essential function within system of use or illuminate an essential tech problem in an industry Should be easy to tie in to or build upon to expand system of use as well as allow new or even unintended end usersGoogl e is coring in internet search. Linus in web server direct systems for tipping. Intellectual Property Protection sub judice right granted by a government that allows inventor to preclude others from apply the same origination for a maximum of 20 years oNeed to demonstrate that invention isNovelNot ObviousUsefulSecret when the patent application is filedBenefitsBlocks others from utilise inventionRaises the cost of imitation by rivalsHelps to raise capital by mark a competitive advantage Helps in negotiating rightsoLimitationsRequires disclosure of the invention in all countriesMonopoly is temporaryRivals can often work aroundLong, complex, costly to defendCan be irrelevant if technology moves rapidlyLecture 12 Business first-class honours degree UpEntrepreneurship ApproachesCausal Logic (start with goals persuade return)Evaluate opportunities on measurable market demand & competition Select option with highest expected returnSpecify resources needed to get the outcome you w ant around often used in developed, familiar products/marketsMeans-Based (start with means avoid loss)Evaluate alternatives based on given set of means + low cost experiments Select option based on affordable loss rather than expected return book pre-commitments with customers, suppliersMost often used in uncertain products / marketsDealing with UncertaintyEntrepreneurs choose a comfortable level of risk and push to increase return oBankers pick a desired level of return and push to reduce risk