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Customer value.
customer delivered value is the difference
between total customer value and totalcustomer cost.
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Total customer value.
customer expectation from a given product
or service.
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Total customer cost.
cost which incur in using a product or
service.
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The Indian consumer
Demographic profile.
920 million consumers in 1995.
In 2007 more than one billion consumers..
Geographical distribution.
Diversity in language, religion and
social customs.
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Religious diversity.
Linguistic diversity.
Diversity in dress ,food habits etc. Diversity in literacy level.
Diversity in density of population.
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Social class.
Social class can be used as a base for
market segmentation and is usually
measured by a weighted index of several
demographic variables such as Education ,occupation and income.
The concept of social class implies a
hierarchy in which individuals in the same
class generally have the same degree ofstatus, while members of other classes have
either higher or lower class.
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Social class categories
The most general categorization ofsocial class structure can be put underthree groups.
Upper class. Middle class.
Lower class.
Where as middle class represents thelargest proportion of population and isconsidered as the largest consumption
group.
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The middle class can be further be divided
creating a total of five groups of social class.
such a division can be more useful tomarketers for developing appropriate
products and services targeting specific
social class consumers.
Upper class.
Upper middle class.
Middle, middle class.
Lower middle class. Lower class.
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The upper class.
The upper class of most societies is a varied
group of individuals who include the aristocracy,
the nouveau riches (the new social elite) and the
upper-middle class. Aristocracy consists of traditional old money
families who acquired great wealth and power
E.g. : maharajas and business people.
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The middle class
This class consists of primarily white collarworkers at managerial levels.
E.g. : doctors ,lawyers, medium sizedbusiness. In India middle class is the largest consuming
class.
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The lower class.
They are poor people and generally represent a
sizable population, particularly in the poorer
developing countries.
E.g. : un represent farm workers ,un organizedlabour , unskilled workers.
Studies shown that consumers in different social
class vary in terms of values product preference
and buying habits.
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Societal marketing concept.
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Societal marketing concept
Holds that the organization task is to
determine the needs, wants and interests
of target markets and to deliver the
desired satisfaction more than itscompetitors in a way that preserves or
enhances the consumers and the
society's well being.
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Societal marketing concept is based on
the following premises.
The marketer has to fulfill thecustomer demand and also to
contribute to the enrichment or quality
of life. The marketer shall not offer a
product to consumers if it is not in the
best interests of consumers.The marketer will offer long run
consumer and public welfare.
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Societal marketing concept calls upon
marketers to build upon social and
ethical considerations . Marketers have to balance on
Profitability.
Consumer satisfaction. Public interest .
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E.g. of successful companies using
societal marketing concept.
Ben & jerry
The body shop.
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Societal Marketing Concept
Do what is good for society
Who determines what is good for
society?
Ethics
HonestyTrust
Give back to the community
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cause related marketing
cause related marketing is a form of
corporate philanthropy that links a
companys contributions (usually
monetary) to a predesignated worthycause with the purchasing behavior of
consumers.
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Relationship marketing.
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Aim of building long term relationship
with customers, suppliers.
Marketing network consists of the
company and its supporting
stakeholders (customers, employees,
retailers ) with whom it has builtmutually business relationships.
Rather competition between the
companies but with the networks.
E.g. :Harley Davidson.
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Process involved in the customer
relationship marketing.
Suspects.
prospects.>disqualified prospects.
First time customers.
Repeat customers.
Clients.
Members. Advocates
Partners
In active or
Ex customers
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Win back-strategies.
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Suspects- everyone who mightconceivably buy the product or service.
Prospects- company looks harder at thesuspects to determine who are the mostlikely people who go for the buy.
Disqualified prospects are thosepeople in which the company rejectsbecause of the inability to pay.
Converts many of qualified prospects to
first time customers. And then to convert the first time
customers to repeat customers.
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And the repeat customers when they gofor repeated purchase will turn to
clients. People whom the company treats very
specially.
then the clients to members is the nextstep in membership program offers a
whole set of benefits to join.
Members to advocates
Advocates to partners where thecompany and the customer worktogether actively.
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Some customers will move out because of
dissatisfaction , bankruptcy
Bring back the customers through
customer win back strategies.
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Different levels of investment incustomer relationship building.
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Basic marketing.
Re-active marketing.
Accountable marketing. Pro-active marketing.
partnership marketing.
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Basic marketing: the sales personsimply sell the product.
Re active marketing : the salesperson sells the product andencourages the customer to call if he or
she has questions ,comments orcomplaints.
Accountable marketing : sales personphone the customer after sometime
sale occur to check the product ismeeting expectations.
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Pro-active marketing:
the company sales person contacts thecustomer from time to time with inviting
suggestions and any specific
disappointments.
partnership marketing:
the company works continuously with
the customer to perform better.
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Marketing environment
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marketing environment comprises of
Internal marketing environment (micro).
(objectives and resources)
External marketing environment.
(macro).
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External marketing environment. (macro).
consists of
Socio-cultural environment.
Economic environment.
Legal/political environment.
Competitive environment & technologicalenvironment
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Environmental scanning.
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Environmental scanning is the practice
of keeping track of environmentalchanges that can affect an organization
and its markets.
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These changes can occur in all
dimensions of external environment-
Economic.
Political.
Legal.
Social. Technological & competitive.
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economic
income inflation recessionInterest
rateExchange
rate
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Recession is a period of economic activity
when income ,production and employment
tend to fall.
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Technology
Technology
forNation
Technologies
ForProducts and
services
Technology
Forbusiness
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SOCIAL-CULTURALFACTORS
VALUES TIMESTRAVEDCUSTOMERS
MULTIPLELIFESTYLES
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Market oriented strategicplanning
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Lower level management- operational
planning takes place at the bottom of
organizational structure i.e. day to day
weekly or monthly activities.
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Business unit strategic planning
consists of the following steps.
Business mission
Swot analysis.
Goal formulation.
Strategy formulation.
Program formulation & implementation.
Feed back and control.
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SWOT Analysis
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
Buy SmartDraw!- purchased copies print this
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Goal formulation.
After the swot analysis ,firm can proceed to goalformulation.
Every business is having a goal may be a mix ofgoals .
Objectives for profitability , sales growth , marketshare improvement ,risk containment ,innovation
and reputation.
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Strategy formulation
The way to achieve goals is strategy.
Michael porter has condensed them intothree types of marketing strategies
Cost leadership.
Differentiation.
Focus.
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Cost leadership
Business works for the lowest production
and distribution costs so that it can price
lower than its competitors
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program formulation
once the business unit has developed its
strategies it must work out.
strengthening r&d development
,training the sales force and develop ads.
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Implementation.
implementing the strategies in an effectiveway is an important factor.
every company is having their ownstrategies based on these they willimplement the same (employees hiring ,
training , assigning them the right jobs.
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Feed back and control
firm needs to track and monitor new
developments in the internal and external
environment.
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Corporate and divisionstrategic planning.
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All corporate headquarters undertake
four planning activities.
Defining the corporate mission.
Establishing strategic business units.
Assigning each resources to sbu
Planning new business , downsizing
older business.
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Strategic business units.
An sbu has three characteristics.
It is a single business or collection ofrelated business that can be plannedseparately from the rest of thecompany.
It has its own set of competitors.
It has a manager who is responsible forstrategic planning and profit
performance and who controls most ofthe factors affecting profit.
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Planning new business,downsizing older business.
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When there is a gap between the
projected sales and current sales
corporate management have to developor acquire new business to fill it.
How can it fill the strategic planning
gap?
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Three options are available.
Further growth within the current
business (intensive growth strategies) Identify the business that are related tothe current business (integrative )
Identify opportunities that are unrelatedto the companys current business(diversification )
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Growth strategies.
Two major growth strategies are intensive
growth strategies and integrated growth
strategies.
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Intensive growth strategies.
can be explained in terms of Ansoffs
(1957) product /market matrix.
market penetration strategy.
market development strategy.
product development strategy. diversification strategy.
ANSOFFS PRODUCT/ MARKET MATRIX
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ANSOFF S PRODUCT/ MARKET MATRIX.
MARKETPENETRATION
STRATEGY
PRODUCTDEVELOPMENT
STRATEGY
MARKETDEVELOPMENT
STRATEGY
DIVERSIFICATIONSTRATEGY
EXISTING
MARKET
EXISTING
PRODUCTS
NEW
PRODUCTS
NEW
MARKET
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Diversification strategy.
diversification is a strategic tool for
companies when further growth is
restricted or limited in a market.
diversification can be formulated in two
ways .
they are related diversification and
unrelated diversification.
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Diversification
Related
diversification
Unrelated
diversification
ThroughTaking over
Anotherbusiness
ThroughMerger with
AnotherBusiness
ThroughForming
Joint ventures
ThroughFormingStrategicAlliances.
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Product development strategy.
A firm develops new products to launch in
to the existing markets.
EG : MARUTI ZEN ESTILO
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Integrative growth strategy.
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When there is a possibility of having a
strong growth future. A firm may adoptintegrative growth strategy.
Generally there are three types of
integration exists. Backward integration .
Forward integration.
Horizontal integration.
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backward integration enable the
firm to have control over the supply
system.
(suppliers, components ).
forward integration helps to have
control over the distribution system(networks).
horizontal integration either to
seek control over competitors orownership of the competitive firms.
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Boston consulting groups (BCG)market growth /share matrix.
The basic process for creating a
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The basic process for creating a
portfolio plan is to evaluate strategic
business units in the organizations
portfolio.
Two techniques for evaluating the sbus
in a business portfolio management are
Boston's consulting groups growth/share matrix and general electrics
industry attractiveness /business
strength matrix.
Th B t lti
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The Boston consulting group was
founded in the middle of 1960 to
provide consultancy service to strategicmarketing planners in USA.
BCG developed a simple but very
useful method which came to known asBCGs
business portfolio matrix on two
measures :market growth rate (low orhigh) and relative market share (low or
high)
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Stars.
Cash cows.
Dogs.
Question marks.
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Stars are leaders in their markets but
they have to focused on building sales
or market share. More cash is required
to finance their rapid growth. If the
market share falls , a star can be
changed in to a problem child.
.
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Question marks- they are also called
problem children products. The marketis growing at a high rate but the market
share is low.
choice is to increase investment andbuild market share to turn it to a star, or
to withdraw support by either harvesting
(raising prices while lowering marketingexpenditure) or divesting (dropping or
selling )
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cash cows The market is growing at
a slow rate and business is high in the
form of market leader. The companys objective is to hold
sales and market share. If the business
fails to hold on its market share , it willbe converted to dog.
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Dogs the market is growing at a slowrate and the market share of the businessis low.
Company have to check by makinginvestments it can boost the business.
If the business is weak company have totake decision whether to harvest or divest.
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Build here the objective is to
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Build here the objective is to
increase market share . It is appropriate
for question marks whose marketshares must grow if they are to become
stars.
Holdpreserve the market share.
strategies are designed to retain
customers.
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Divest
The objective is to sell or liquidate the
business and used elsewhere.
Appropriate for dogs and question marks
that are acting as a drag on companys
profits.
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Peter Druckers (1973)
Seven Types of BusinessPortfolios
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Failure
Yesterdays bread
winners
Todays bread
winners
Developments
Sleepers
Ego trips
Tomorrows
Bread winners high
Market
ttractivy
low
Business strength
low
high
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Todays bread winners:
Tomorrows bread winners:
Yesterdays breadwinners:
Developments :
Sleepers :
Ego trips : Failures :
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General electrics ( G E)approach
business strength matrix.
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strong average weak
Business strength
high
medium
low
arket
ttrac-tivity
Sbu1
sbu2
sbu3
sbu4
Green zone consists of three cells at the
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Green zone consists of three cells at the
upper left indicating favorable industry/market
attractiveness. So it suggests the company to invest and
grow.
Yellow zone consists of markets and
business are medium in over allattractiveness.
So the company decide to maintain the
shares. Red zone indicates markets/business are low
in attractiveness so decide to harvest or
divest.
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