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Marketing Management
Sub Code: 12MBA24
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Recommended Books
2
1. Marketing Management: A South AsianPerspective- Kotler, Keller, Koshy & Jha, 13/e,
Pearson Education, 2012
2. Marketing : An Introduction- Rosalind Masterson
& David Pickton, 2/e, Sage Publications, 2010
3. Marketing Management- Ramaswamy V.S. &
Namakumar S, 4/e, Macmillan Publishers, 2011
4. Fundamentals of Marketing Management- EtzelM.J, B J Walker & William J. Stanton, 14/e,
TMH, 2012
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Reference Books
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Marketing Management: Rajan Saxena, 4/e,Cenage Learning
Marketing- Lamb, Hair, Sharma Mc Danniel, 1/e,
Cengage Learning, 2012
Marketing: Marketing in the 21stCentury- Evans &
Berman, 2/e, Cengage Learning, 2005
Marketing: Planning, Implementation, and
Control- William M Pride, Ferrel O.C.,
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Modules to be covered
4
Module 1: Introduction Module 2: Understanding Consumer Behaviour
Module 3: Market Segmentation, Targeting,Positioning & Branding
Module 4: Product Decisions, Packaging/Labeling
Module 5: Pricing Decisions
Module 6: Distribution Decisions
Module 7: Integrated Marketing Communications
Module 8: Marketing Planning, MarketingOrganisation, Marketing Audit.
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Introduction
Module1
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Good Marketing is No Accident
The roaring success of
Tata Ace,a mini-truck
with the engine capacity
of less than one ton
launched by Tata Motors
in 2005, was due to a
deep understanding ofthe market needs and
customer requirements.
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Defining Marketing
Marketing is a societal process by which
individuals and groups obtain what they need
and want through creating, offering, and freely
exchanging products and services of value withothers
More simply put, Marketing is the delivery of
customer satisfaction at a profit. In other wordsmarketing is meeting needs profitably.
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The American Market ing Associat ionof fers the fol low ing formal def in i t ion :
Marketing is an organizational function and aset of processes for creating, communicating,and delivering value to customers and formanaging customer relationships in ways thatbenefit the organization and its stake holders.
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Evolution Of Marketing
Tribes Barter System
Industrial
Revolution
Relationship Era Production Era
Marketing Era Sales Era
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What is Marketed? Goods Services
Events
Experiences
Persons
Places
Properties
Organizations Information
Ideas
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Goods
GOODS:Physical goods constitute the bulk of most
countriesproduction and marketing effort.
o Each year, Indian companies alone market
billions of fresh, canned, bagged, and frozen foodproducts and millions of cars, refrigerators,television sets, machines, and various othermainstays of a modern economy.
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Services
SERVICES: As economies advance, a growing proportion oftheir activities is focused on the production of services.
The U.S economy today consists of a 70-30 services-to-
goods mix. Services includes the work of airlines, hotels, car
rental firms, barbers and beauticians, maintenance andrepair people, as well as professionals working within or for
companies, such as accountants, bankers, lawyers,
engineers, doctors, software programmers, and
management consultants.
Many market offerings consist of a variable mix of goodsand services. At a fast-food restaurants, for example, the
customer consumes both a product and a service.
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Events
EVENTS: Marketers promote time-based events,such as major trade shows, artistic performances,and company anniversaries.
Global sporting events such as the Olympics or
World Cup are promoted aggressively to bothcompanies and fans. There is a whole professionof meeting planners who work out the details of anevent and make sure it comes off perfectlyaggressively to both companies and fans.
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EXPERIENCES: By Orchestrating several services andgoods, a firm can create, stage, and market experiences.
Walt Disney Worlds Magic Kingdom represents
experiential marketing :Customers visit a fairy kingdom, a
pirate ship, or a haunted house.
Experiences
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Persons
Celebrity marketing is a major business. Today, everymajor film star has an agent, a personal manager, and
ties to a public relations agency. Artists, musicians,
CEOs, physicians, high-profile lawyers and financiers,
and other professionals are also getting help fromcelebrity marketers.
Some people have done a masterful job of marketing
themselves think of Madonna, Oprah Winfrey, the
Rolling Stones, Aerosmith, and Michael Jordan,Management consultant Tom Peters, himself a master
at self-branding, has advised each person to become a
brand.
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Places
Cities, States, regions, and whole nations
compete actively to attract tourists, factories,
company headquarters, and new residents.
Place marketers include economicdevelopment specialists, real estate agents,
commercial banks, local business
associations and advertising and public
relations agencies.
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operties
PROPERTIES: are intangible rights of ownership
of either real property (real estate) or financial
property (stocks and bonds). Properties are
bought and sold, and this requires marketing.
Real estate agents work for property owners or
sellers or buy residential or commercial real estate.
Investment companies and banks are involved inmarketing securities to both institutional and
individual investors.
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Organizations
ORGANIZATIONS actively work to build a strong,favorable, and unique image in the minds of their
target publics. Companies spend money on corporate
identity ads. Philips, the Dutch electronics company,
puts out ads with the tag line Lets Make ThingsBetter.
In the United Kingdom, TescosEveryLittle Bit Helps
marketing program has vaulted it to the top of the
supermarket chains in that country. Universities,museums, performing arts organizations, and non-
profits all use marketing to boost their public images
and to compete for audience and funds.
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Information
INFORMATIONcan be produced and marketed as aproduct. This is essentially what schools and
universities produce and distribute at a price to
parents, students, and communities. Encyclopedias
and most nonfiction books market information. Internetsearch engines such as Google, Wikipedia etc peddle
information.
The production, packaging, and distribution of
information is one of our societys major industries.Even companies that sell physical products attempt to
add value through the use of information.
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Ideas
IDEAS: Every market offering includes a basicidea. Charles Revlon of Revlon observed : In
the factory, we make cosmetics; in the store we
sell hope.
o Products and services are platforms for
delivering some idea or benefit.
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Nature, Scope and Importance
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Marketing is managing profitable customerrelationships. The basic objective of marketing is
to attract new customers by promising and
offering superior value and to retain and grow
current customers by delivering satisfaction. Building customer relationships based on
customer value and satisfaction is at the very
core of modern marketing.
Highly successful companies know that if they
take care of their customers, market share and
profits will follow.
Sound marketing is essential for the success ofever com an , whether lar e or small, lobal or
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Needs, Wants and Demand NeedsNeeds are the basic human
requirements. People need food, air, water,clothing, and shelter to survive. People also havestrong needs for recreation, education, andentertainment.
WantsWants are the forms human needs takeas they are shaped by culture and individualpersonality characteristics. The need becomewants when they are directed to specific objectsthat might satisfy the need.
DemandsWhen human wants are backed bypurchasing power and willingness to buy, theybecome demands. Demands are wants forspecific products backed by an ability to pay.
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Maslows Hierarchy of Needs
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Marketing and Maslows Need Hierarchy Physiological needs (Eg: Thanda Matlab Coca
Cola, Kellogs cereal rich breakfast provides you
with a rich food, Quaker Oats: Eating oatmeal is
good for your heart) Safety Needs (Ads of Insurance Companies)
Social needs ( Eg: BPL mobile helps you to keep
in touch with family and friends wherever they
are,J C Penney: Wherever teens gather, youll hear it.
Its the language of terrific fit and fashion.)
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Esteem Needs (E g: Ownership of omega watchis a sign of excellence. Ad of BMW: The Ultimate
Driving machinestresses power, an egoistic
need, Ad of Esteem: Life is full of twists and
turns. Arent you glad you drive an esteem.Cadillac: Those long hours have paid off. In
recognition, financial success, and in the way you
reward yourself. Isnt it time you owned a
Cadillac? )
Self-actualization needs ( E g: IGNOU: Distance
education programme, encourages you to further
your knowledge)
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Marketing Orientations
The Production Concept It holds that consumers will prefer products that are widely
available and inexpensive. Managers of production orientedbusinesses concentrate on achieving high production efficiency,low costs and mass distribution.
The Product Concept It holds that consumers will favor those products that offer
the most quality, performance, or innovative features.Managers in these organizations focus on making superiorproducts and improving them over time.
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The Selling ConceptIt holds that consumers and businesses, if left alone, will ordinarily
not buy enough of the organizations products. The organizationmust, therefore, undertake an aggressive selling and promotioneffort. The aim is to sell what they make rather than makewhat the market wants.
The Marketing ConceptThis concept emerged in the mid-1950s. Instead of a product-
centered, make-and-sell philosophy, business shifted to acustomer-centered,sense-and-respond philosophy. The jobis not to find the right customers for your products, but theright products for your customers.This concept holds that the
key to achieve organizational goals consists of the companybeing more effective than competitors in creating, delivering, and
communicating superior customer value to its chosen targetmarkets.
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The Holistic Marketing Concept:It is based on the development, design, and
implementation of marketing programs, processes andactivities that recognizes their breadth andinterdependencies. It recognizes that everything matters
with marketing- and that a broad, integrated perspective isoften necessary.
The 4 components of Holistic Marketing are:
1. Relationship Marketing
2. Integrated Marketing
3. Internal Marketing
4. Social Responsibility Marketing
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Relationship Marketing
Relationship Marketing:Increasingly, a key goal of marketing is to developdeep, enduring relationships with all people ororganizations that could directly or indirectly affect
the success of the firmsmarketing activities.
Relationship Marketing has the aim of buildingmutually satisfying long-term relationships with keyparties customers, suppliers, distributors, and
other marketing partners in order to earn andretain their business. Relationship marketing buildsstrong economic, technical, and social ties amongthe parties.
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Integrated Marketing Mix
INTEGRATED MARKETING
The Marketerstask is to devise marketing activities andassemble fully integrated marketing programs to create,
communicate, and deliver value for consumers. Themarketing program consists of numerous decisions onvalue-enhancing marketing activities to use. Marketingactivities come in all forms.
One traditional depiction of marketing activities is interms of the marketing mix, which has been defined asthe set of marketing tools the firm uses to purpose itsmarketing objectives. McCarthy classified these toolsinto four broad groups, which he called the four Ps of
marketing : Product, Price, Place and Promotion31
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Marketing
Mix
roductQuality
Design
Features
Functionality
Brand NameProduct variety
Packaging
Sizes
Services
WarrantiesReturns
ricePricing strategy
List Price
Discounts
Allowances
Payment period
Credit terms
romotionSales Promotion
Advertising
Personal sellingPublic Relations
Direct Marketing
laceChannels
Coverage
Assortments
Locations
Inventory
Transport
The Four P Components of the Marketing Mix
Target
Market
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The Four Ps
Marketing
Mix
Product
PricePromotion
Place
The Four Cs
Customer
Solution
Customer Cost Communication
Convenience
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Internal Marketing
Holistic Marketing incorporates INTERNAL MARKETING,
ensuring that everyone in the organization embracesappropriate marketing principles, especially seniormanagement.
Internal marketing is the task of hiring, training, andmotivating able employees who want to serve customers well.Marketing activities within the company can be as importantas, or even more than marketing activities directed outsidethe company. It makes no sense to promise excellent servicebefore the companysstaff is ready to provide it.
Internal marketing must take place on two levels. At onelevel, the various marketing functions sales force,advertising, customer service, product management,marketing, research must work together. At the other levelall the marketing functions must be coordinated from the
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Social Responsibility Marketing
(Performance Marketing)
SOCIAL RESPONSIBILITY MARKETING:Holistic Marketing incorporates Social Responsibility
Marketing and understanding broader concerns and
the ethical, environmental, legal, and social context of
marketing activities and programs. The cause and effects of marketing clearly extend
beyond the company and the consumer to society as a
whole. Social responsibility also requires that
marketers carefully consider the role that they areplaying and could play in terms of social welfare.
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The Societal Marketing Concepts holds that theorganizations task is to determine the
needs ,wants, and
interests of target markets
and to deliver the desiredsatisfactions more
effectively and efficiently
than competitors in a way
that preserves or enhancesthe consumers and the
societys well-being
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Contrastedeting & Sales Concepts
Contrasted
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Selling Vs Marketing
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Selling starts with the seller and concerned with thesellers needs whereas Marketing starts with the
buyer and concerned with the buyers need.
In Selling, the Core of business activity is the seller
whereas in Marketing, Buyer is the core of all activity. Selling converts existing products into money
whereas Marketing converts customer needs into
products.
Selling views Business as a goods-producing processwhereas Marketing views Business as a customer-
satisfying process.
In Selling, Marketing mix is planned as per sellers
need, whereas in Marketing, Customer dictates thelan of marketin mix.
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In Selling, different departments of the businessact independently ,whereas in Marketing, all
departments work in an integrated way to satisfy
the customer
In Selling, Production is the central function ofbusiness whereas in Marketing, the central
function of business is Marketing
In Selling, Customer is the last link in Business
,whereas in Marketing, Customer is the very
purpose of Business.
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Scanning and Analysing The Environment
Environmental Scanning gives companies advantage over
competition by taking advantage of changing trends. Scanning
requires observation, collecting information and analysis
involves assessing and interpreting the gathered information sothat the opportunities and threats arising from the
environmental factors can be properly understood and
strategies formulated accordingly.
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Marketing Environment
The actors & forces outside marketing that affect
marketing managements ability to build & maintain
successful relationships with target customers
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Definition and Concepts
A companys marketing environment consists of the actors andforces outside marketing that affect managementsability to build andmaintain successful relationships with target customers. (PhilipKotler)
The microenvironment consists of the following actors close to thecompany that affect its ability to serve its customers: (1) TheCompany (2) The Suppliers (3) The Marketing Intermediaries (4) TheCustomers (5) The Competitors (6) The Public.
The macro environment consists of the following larger societalforces that affect the microenvironment: (1) Demographic (2)Economic (3) Socio-cultural(4) Natural (5) Technological(6)Political-Legal
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Micro Environment
Micro environment- The actors close to thecompany that affect its ability to serve its
customersthe company, suppliers, marketing
intermediaries, customers, competitors & publics
Micro Environment
It consists of the actors close to the company that affect its ability to serve its customers
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Micro environment
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Macro Environment
The larger societal forces that affect themicroenvironment- demographic, economic,
natural, technological, social-cultural & political-
legal forces
Macro Level
Influences that affect all firms
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The Company In the Company, marketing managers, in formulating
plans, must take into account the other groups such as
top management, finance, R&D, purchasing,
manufacturing and accounting
The Suppliers
Suppliers form an important link in the companys overall
customer value delivering system. They provide the
resources needed by the company to produce its goals andservices. Price changes, supply shortages, labour strikes,
and other events can interfere with the fulfillment of delivery
promises to customers and lose sales in the short run and
damage customer relationships in the long run.
Analyzing the Microenvironment
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The Marketing Intermediaries Marketing intermediaries are firms that aid the company
in promoting, selling and distributing its goods to the finalbuyers. Middlemen are business firms that help thecompany find customers and/or close sales with them-
agents, brokers, dealers, wholesalers, retailers and soon.
The Customers
Customers of the company belong to Consumer Markets,
Industrial Markets, Reseller Markets, Government Marketsand International markets. The tastes and preferences ofcustomers keep on fluctuating. Customers brand loyaltykeep changing. Only by studying the market demand andcustomer-0related factors on a regular basis can marketerscarry out their business activities successfully.
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The Competitors The companys marketing system is surrounded
and affected by a host of competitors. These
competitors have to be identified, monitored to gain
and maintain customer loyalty. Competitiveadvantage is a superior or distinctive competence of
the company relative to competition in a specific
area.
The PublicsThe company must also acknowledge a large group of
publics that take an interest in its method of doing
business. A public can facilitate or impede the ability of
an organization to accomplish its goals. There are
various types of Public, namely, financial, media,-
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Identifying the Major Forces
Demographic
Economic
Socio-culturalNatural
Technological
Political-legal
Analyzing the Macroenvironment
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Demographic Environment
Worldwide Populat ion Growth
Popu lat ion Age Mix
Ethnic Markets
Household Patterns
Educational Group s
Geographical Shi f ts in Populat ion
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Economic EnvironmentIncome Distribution
Savings, Debt and Credit Availability
Outsourcing and Free Trade
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Social- Cultural Environment Society shapes the beliefs, values, and norms that
largely define consumer tastes and preferences.
People absorb, almost unconsciously, a world view
that defines their relationships to themselves, toothers, to organizations, to society, to nature, and to
the universe.
High Persistence Of Core Cultural values
Existence Of Subcultures Shifts Of Secondary Cultural Values Through Time
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Natural Environment
Shortage Of Raw Materials
Increased Energy Costs
Anti-Pollution Pressures
Changing Role Of governments
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Technological Environment
Accelerating Pace Of Change
Unlimited Opportunities For Innovation
Varying R& D Budgets
Increased Regulation Of Technological Change
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Political-Legal Environment
Increase In Business Legislation
Growth Of Special- Interest Groups Consumer Protection Act,1986
Safety
Information
Choice
Representation Redressal
Consumer education
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Consumer Protection Act, 1986
Right to Safety: To be protected against the sale ofgoods and services which are spurious/hazardous forthe life.
Right to Information: To know the quality, quantity,weight and the price of goods/services being paid for,
so that one is not cheated by unfair trade practices. Right to Choose: To be assured, wherever possible,
access to a variety of goods and services atcompetitive prices.
Right to be Heard: To be heard and to be assured
that the interest would receive due consideration atappropriate forums Right to Seek Redressal: Toseek legal redressal against unfair or restrictive tradepractices or exploitation.
Right to Consumer Education: To have access toconsumer education
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Responding to the Marketing Environment
Many companies view the marketing environment as an
uncontrollable element to which they must adapt. On the other
hand there are companies who take aggressive actions to affect
the publics and forces in their marketing environment.
Marketing managers cannot always control environment forces.
But whenever possible, they should take a proactive approach
to the marketing environment.
Difference b/w consumer and
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Difference b/w consumer and
customer
Generally, a consumer refers to individuals whobuy for themselves or their family (hence the term
'consumerism' in economics and politics),
whereas a customer can also mean the retailer or
person who buys from the manufacturer, etc. forultimate sale to others.
The one who buys the product is called a
customer and the who uses the product is called
a consumer.-A customer is who buys the things but a
consumer is the person who finally utilizes it.
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The Marketing Process
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Analyzing market opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort
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The Marketing Process
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Marketing Management Tasks
Developing Marketing Strategies And Plans Capturing Marketing Insights
Connecting With Customers
Building Strong Brands
Shaping The Market Offerings
Delivering Value
Communicating Value
Creating Long-Term Growth
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The New Marketing Realities
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Major Societal Forces Network information technology
Globalization
Privatization
Heightened competition Consumer resistance
Retail transformation
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New Consumer CapabilitiesA substantial increase in buying power
A greater variety of available goods and services
A great amount of information about practically
anything Greater ease in interacting and placing and
receiving orders
An ability to compare notes on products and
servicesAn amplified voice to influence peer and public
opinion
New Company Capabilities
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CRM
CRMCustom er relat ionship management. .
is the overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction.
It costs 5 to 10 times MORE to attract a new customer
than it does to keep a current customer satisfied.