Chapter 5 IEng5180.ppt
- 1. Chapter 5: Recent Trends in Marketing Management Marketing and Financial Management- IEng5180 By Seife Ebeyedengel (MSc. in Industrial Engineering)
- 2. Introduction With increase in competition, demand, and benefits in the marketplace, there are recent trends introduced in marketing which helps customer to be at the center of business systems. All business operations revolve around customer service and satisfaction and many companies are following customer-oriented philosophy to ensure growth in sales, profits and market share.
- 3. Customer Relationship Management (CRM) It is defined as a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. CRM is to establish, maintain and enhance relationship with customers and other partners, at a profit, so that the objectives of the parties involved are met.
- 4. Customer Relationship Management (CRM) Features of CRM CRM focus on building and maintaining profitable and long-lasting relations with the customers and creating superior customer value and customer satisfaction. CRM focuses on co-operative and collaborative relationship between the firm and its customer. CRM requires putting customer first and genuine customer involvement through communication and sharing of knowledge. The customer is not to be treated as one-time purchaser but as a person who will patronize the brand for lifetime. If the customer is taken care, sales volume, market share and profits will grow. CRM should focus on Customers (consumers, users, and channel members) and the Brands. CRM makes use of IT and database, interactivity through websites, call centres and other means of contacting customers.
- 5. Customer Relationship Management Programs Customer loyalty programs offer additional benefits to loyal customers who patronize company's products and services. Example: Hotels, airlines, shops, Credit card providers offer additional benefits in the form of bonus points, coupons, etc. to customers for repeat purchases Customer service centers deal with customer complaints and offer solutions to their problems Customer clubs provide opportunities for interaction between the customer and the company. Example: Many companies have formed “Achievers club‟ which offers membership to distributors and dealers based on their sales performance.
- 6. Customer Relationship Management Programs Customer retention programs aim at retaining loyal customers by offering them target oriented schemes such as achievement of sales targets, new product volumes and prompt payment of outstanding, etc. Many companies have initiated Customer interaction programs through on-line (websites, e-mails, chat room) and off- line (telephone, fax) and outsourcing (call centers) activities. Direct Mailing: It is a way of sending information relating to goods and services directly to prospects and customers. Telemarketing involves use of telephone to contact new and existing customers, to take order and to know the market situation.
- 7. Relationship Selling All customers do not contribute the same value to the company, rather only a small percentage of the customers contribute to a large percentage of the total sales volume and profit. Important factors to be considered while selecting the customers are: Benefits: Concerned about quality, price, service User status: Non-user, Ex user, potential user, occasional user and regular user Usage rate: Light user, medium user, and heavy user Shop/Brand loyalty: None, medium and strong Attitude to product: Enthusiastic, positive, negative, and hostile
- 8. Relationship Selling It is not possible for a salesperson to meet all the customers and develop relationship with them. To start with the salesperson should select a few customers in each market such as distribution channel, distributors and retailers so that he/she can offer more personalized service, which makes them feel happy and important.
- 9. Retaining customers It has been observed that acquiring new customers is a costly process compared to retaining existing customers. Further, a large percentage of profit comes from long-term customers and, therefore, the companies must focus on existing customer-base. When a company loses a customer, it loses much more than a single sales transaction. It loses the entire business the customer would make over a period known as customer lifetime value.
- 10. Retaining customers Companies lose customers for a variety of reasons: If the customer finds that the price is high compared to the benefits offered by the product, he may buy another product; When a new product, with more features, is offered in the market, the customer may buy the new product; The customer may buy another product due to personal reasons such as easy availability, influence of friends and relatives and indifferent nature of the service provider; Some customers (Natural floaters) keep on changing brands particularly in the case of FMCG products.
- 11. Brand Brand is much more than product name, company name or logo. Brand includes company products, services, behavior of company staff, distribution channel, and use of technology and management processes. It is the sum of the experience of customers with the company. The company integrates the activities of sales, management, accounts, and logistic departments to develop positive brand image. The organization move away from a purely sales approach and initiative customer relationship management programs to face the challenges in the market.
- 12. E-Marketing Electronic marketing basically involves selling of products and services through electronic channels i.e., use of fax, e- mail, ATMs and smart cards for doing business. Advantages of e-marketing: Time factor: The company can send messages to distributors, dealers and consumers at any time and the receiver can access the mail at his convenience. The messages are received instantly. Availability of information: The consumer has access to updated information on a variety of products and services which enables him to take purchase decision
- 13. E-Marketing Geographical coverage: The messages can be sent to customers located at far off places including foreign countries and it will be received instantly. To and from communication: There are facilities such as chatting, and conferencing and business discussions could be held at short notice without the need for the physical presence of participants in one place. Shifting of selling process from seller to buyer: Buyers have become more demanding, and they can choose from a variety of goods and services available in the market. E- marketing allows the sellers to catch the attention of buyers and build relationship with them through Internet. Distribution cost: E-marketing basically involves direct marketing and, therefore, the distribution channel costs are reduced.
- 14. E-Marketing Types of E-Market B2B: The transaction is between business organizations using Internet. It includes purchase orders, payments, etc. B2C (Business to Consumer): The organization sells products/services to consumers C2C (Consumer to Consumer) where consumers directly sell products and services to other consumers through internet. Example: e-bay facilitates selling of privately owned items between individuals.
- 15. E-Marketing E-marketing is a Customer-led Business E-marketing makes use of database of customers and prospects and creates constant flow of information between customers themselves. E- marketing is a customer-led business and basic marketing principles apply to online marketing too. Marketing management can be defined as the management process of identifying, anticipating and satisfying customer needs profitably. Similarly, E-marketing can identify, anticipate, and satisfy customer needs efficiently.
- 16. Marketing through social channels Taking suggestions from our social channels before buying products and getting services. Once, we have confidence in their recommendations, we follow their advice in making a purchase decision. for example: refrigerators, air- conditioners, and automobiles, etc. Word of mouth publicity through social channels costs the business relatively little.
- 17. Marketing through social channels Companies can take the following steps to stimulate social channels to recommend the products: Identify influential people in the society and convince them about the advantages of the products. Offer them products at special rates. Use influential people in testimonial advertising. Develop rapport with them and request them to recommend products. Example: The Insurance agents, mobile merchants and salesmen dealing with household products are already making use of social channels for selling their products and services.
- 18. Thank you!