Marketing Strategy: Key Concepts 3

How do customers perceive quality, how do you offer it better than your competitors?

• Evolution of Marketing Concept supports this:
  
• Competition in the Marketplace increasing (and global)
• Technology (DB and communications) allows customers to learn more ---look at the evolution.

Relationship Marketing Management

Customer Acquisition Math Example:
Cost of Sales Call $500
Succes of Sales Call: 1 / 5
Cost of new customer $2,500 (not including overhead)
Average Life Value of Customer:

Annual Customer Revenue: $10,000
Average Life Time: 3 years
Profit Margin: 10%
Life Time Value: $3,000

This looks at averages, not at different consumers.

Do not try to satisfy all customers ... some more profitable than others. Fire customers, or move them to higher profitability (increase price, reduce cost of service). 20-80-30 rule

Customers don't ordinarily complain, they simply don't buy, and they may tell others! Encourage complaints to filter to your company. (See Kellogg discussion)
Cost of lost customers?
Surveying lost customers

Discussion Topic: How does your company process customer complaints. what is done with them re: interaction with customer and changing business process? (Alternatively, as a customer, how have your complaints been handled?)

Internal marketing needs
Making Customer Relationship Management Work

Customer Service

Shanghai interview ---students helping students, serving better than we could.

Discussion Topic: Provide your own examples of excellent / poor customer service that have material impact on retaining / losing customers (use examples from a business and or customer perspective).

Discussion Topic: How does your company use its web-site for customer service and / or customer relationship building?

Marketing Stimuli	Environmental Stimuli	Buyer's Characteristics	Buyer's Decision Process	Buyer's Decisions
Product	Economic	Cultural	Problem Recognition	Prudct Choice
Price	Technology	Social	Information Search	Brand Choice
Promotion	Political	Personal	Evaluation	Dealer Choice
Place	Cultural	Psychological	Purchase Decision	Purchase Timing
			Post Purchase Behavior	Purchase Amount

Intro: CBB ... Not just about changing promotions, but entire marketing mixes.

Cultural Characteristics: Values, Perceptions, preferences and behaviors (learned from family), fundamental to persons wants.

Buyer behavior influenced by four factors:

• cultural (culture, sub culture and social class (ethnocentrism and patriotism))
• social (reference groups, family, and roles and statuses)
• personal (age and life cycle state, occupation, economic circumstance, life style, personality and self concept)
• psychological (motivation (freud, maslow, hertzberg), perception, learning, and beliefs and attitudes)

How Store Location and Pricing Structure Affect Shopping Behavior

Decision influencers (initiator, influencer, decider, buyer and user) ... not as complex as B2B buying decision influencers.

Types of Buying Situations:

• Complex Buying Behavior
• Dissonance Reducing Buying Behavior
• Habitual Buying Behavior
• Variety Seeking Buying Baehavior

1. Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase Decision
5. PostPurchase Behavior

Patriotism

Wharton MBA Purchase Process

SRI Business Intelligence: VALS, Psychology of Markets

Discussion Topic: Why use iVALS and psychographic segmentation? Which marketers would benefit most from iVals segmentation and why?

Privacy versus understanding the customer, on the net.

Yankelovich

Link to old class notes.

Link to discussion board
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