orientation - strategic marketing management
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Strategic Marketing Management
Khalid J amil Ansari
03002265808
03312510453
December 23, 2012
Welcome to all of you!
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Welcome
About Me
About You (why you?)
Why Strategy?
Overview of Topics
Expectations
Introduction of Concepts
Course Introduction
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Who are You?
Self Introduction
Name
Company / Business / Student
Work experience, if any?
Your claim to fame?
What do you hope to gain from this course?
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Why You?
You will be principals in firms
You will have to decide what to do:
What markets?
What services?
Where to dedicate your time?
What kinds of people?
You probably will be part of a team.
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An Overview of the Subject
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Introduction to Strategic Marketing Management
Introductory Modules , Introduction to Case Analysis,
Writing Case Analysis
Strategy Formulation
Strategy Implementation
Strategic Control
Environment Scanning (SWOT Analysis)Target Marketing
Business Strategy
An Overview of the Subject
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Market Dominance Strategy
Promotion Strategy
Distribution Strategy
Pricing Strategy
Marketing Warfare Strategy
Market Segmentation
The Marketing Process
Marketing Positioning , Marketing Research
Presentations/Revision
An Overview of the Subject
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Resources Needed For This Class
Recommended Book:
Doyle P. (2003), Marketing Management and Strategy,
Prentice-Hall Europe 3rd Edition. · West, D. C., J. B. Ford,
and E. Ibrahim (2006), Strategic marketing: creatingcompetitive advantage: Oxford University Press.
Reference Book :
Strategic Management and Business Policy,
12th Edition, Thomas L. Wheelen, J. David Hunger
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Requirements
Home work Assignments, Class Participation,Quizzes, Case Studies, and Developing of aProject Report
4 Quizzes
MCQs, True/False, Fill in the blanks, andShort Questions
Midterm
Final Exam
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The conventional definition of management is getting workdone through people.
But real management is developing people through work.
Agha Hasan Abedi
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What is StrategicManagement?
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Art & science of formulating,
implementing, and evaluating, cross-functional decisions that enable an
organization to achieve its objectives
Strategic Management – Defined
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Strategic Management
In essence, the strategic managementis a company‘s game plan
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What is Strategy?
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Means by which long-termobjectives are achieved
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What is meant byStrategies?
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Strategies are plans to achieve long term
business aims and objectives of the organization.
Numerous major or minor business strategies
which organizations use to manage their business
operations.
Some minor strategies could be the pricing,promotion, distribution strategies organizations
use in day to day activities.
What is meant by Strategies?
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Some long term major strategies could be to:
- acquire new business or open new branch
- start manufacturing plant in some other country
- close down factory, merge with another organization
- acquire a small business to improve competitive
position
What is meant by Strategies?
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What isMarketing…??
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What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
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Marketing = ?
Marketing is the process of planning and
executing the conception, pricing, promotion,and distribution of ideas, goods, services to
create exchanges that satisfy individual and
organizational goals American Marketing Association
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MarketingManagement = ?
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Simple Marketing System
Industry(a collection
of sellers)
Market(a collection
of Buyers)
Goods/services
Money
Communication
Information
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Marketing = ? Marketing is the sum of all activities that take you to a sales
outlet. After that sales takes over.
Marketing is all about creating a pull, sales is all about push.
Marketing is all about managing the four P‘s –
Product
Price
Place
Promotion
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The 4 Ps & 4Cs?
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The 4 Ps & 4Cs
Marketing
Mix
Product
Price Promotion
Place
Customer
Solution
Customer
Cost
Communication
Convenience
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DifferenceBetween - Sales& Marketing ?
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Difference Between - Sales & Marketing ?
Sales trying to get the customer to want what
the company produces
Marketing trying to get the company produce what
the customer wants
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What do wemarket?
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What do we market?
Goods
Services
Events
Experiences
Personalities
Place
Organizations
Properties
Information
Ideas and concepts
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Core Concepts of Marketing Based on :
Needs, Wants, Desires / demand
Products, Utility, Value & Satisfaction
Exchange, Transactions & Relationships
Markets, Marketing & Marketers.
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Core Concepts of Marketing
Need – food ( is a must )
Want – Pizza, Burger, French fry's ( translation of a need as per our experience )
Demand – Burger ( translation of a want as per
our willingness and ability to buy )
Desire – Have a Burger in a five star hotel
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Needs, wantsdemands
Markets Marketing &
Marketers
Utility, Value & Satisfaction
Xchange, Transaction
Relationships
Products
Core Concepts of Marketing
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In order to understand Marketing let us begin with the
Marketing Triangle
Customers
Competition Company
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Who is a Customer ??
Anyone who is in the market looking at a
product / service for attention, acquisition, use
or consumption that satisfies a want or a need
CUSTOMER IS . . . . .
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Customer –
CUSTOMER has needs, wants, demands and desires
Understanding these needs is starting point of theentire marketing
These needs, wants …… arise within a framework or an ecosystem
Understanding both the needs and the ecosystem isthe starting point of a long term relationship
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How Do Consumers Choose AmongProducts & Services?
Value - the value or benefits the customers gain from
using the product versus the cost of obtaining the
product.
Satisfaction - Based on a comparison of performance
and expectations.
Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction
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Customers - Problem Solution
As a priority , we must bring to our customers
―WHAT THEY NEED‖
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems
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Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost
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What is Strategic
MarketingManagement?
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What is Strategic Marketing Management?
It is the managerial process that helps to
develop a strategic and viable fit between
the firm’s objectives, skills, resources withthe market opportunities available. It helps
the firm deliver its targeted profits and
growth through its businesses and products.
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Strategic Marketing Management Strategic marketing management is concerned with
how we will create value for the customer
Asks two main questions
What is the organization’s main activity at a
particular time? – Customer Value
What are its primary goals and how will these be
achieved? – how will this value be delivered
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How to go about it?
Defining the corporate mission
Establishing SBUs
Allocating resources for SBUs
Planning for new business
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What is VisionStatement?
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What is Vision Statement? Think: leading with inspiration and courage,
obsessed with future possibility, in a love affair with change.
VISION creates that momentum of growinganticipation about the future, where change isembraced as a step closer to that verycompelling picture of what’s coming next. Theexcitement about the future trumps anyapprehension about the uncertain — change isrecognized as the catalytic converter it is.
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What is MissionStatement?
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What is Mission Statement?
Think: managing with greatness and untamed
strength, improving everything daily.
MISSION will feed into the confidence of your
organization by feeding this ever-present self-
talk: “We can do this, and we are the onesordained to do this, for we are the best at it.” Mission will churn out revolutionary ideas about
the mundane, banishing mediocrity.
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Corporate Mission?
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Corporate Mission
This seeks to embody the entire goals of
the organization and the objective of its
existence.
It seeks to provide a sense of purpose,
direction and opportunity
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5 questions that thefirm must ask itself?
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5 questions that the firm must ask itself
What is our business?
Who is our customer?
What does our customer need?
What will our business be?
What should our business be?
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Marketing Myopia
Industry is a customer satisfying process
not a goods producing process.
It is important therefore how you redefine
your business.
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Good mission statements have three
characteristics They focus on a limited number of goals
It stresses the major values and policies the
firm desires
It defines the major competitive scope of
operation
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SBU?
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SBU It is a company within a company
The business is differentiated from the rest
of the company
It has its own set of competitors
It is a separate profit centre
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The BCGMatrix?
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The BCG Matrix
The BCG Matrix is a business method that
was created by the Boston Consulting Group in
the 1970’s. This business method bases its
theory on the life cycle of products.
Also known as the Boston Box or Grid, BCG
Charts are divided into four types of scenarios,Stars, Cash Cows, Dogs and Question
Marks.
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The BCG Matrix
??? Stars
Dogs Cash Cows
Mkt Share
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SBU strategies Build
Hold
Harvest
Divest
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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The GE Model
Business Strength
Strong
Medium
Weak
StrongMediumWeak
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Ansoff’s Product-Market Grid?
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Ansoff’s Product-Market Grid
The Ansoff product/ market matrix is a tool
that helps businesses decide their product and
market growth strategy.
Ansoff’s product/ market matrix suggests that
a business’ attempts to grow depend onwhether it markets new or existing products
in new or existing markets.
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Ansoff’s Product-Market GridCurrent products New products
Current Mkts
New Mkts
Mkt penetration
strategy
Mkt developmentstrategy
Product development
strategy
Diversificationstrategy
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The Planning Process
Analysing Market opportunities
Developing Marketing strategies Planning Marketing Programs
Managing the Marketing Effort
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Porter’s Generic Strategies
Overall cost leadership
Product Differentiator Focus
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Marketing Control Annual Plan control
Profitability control
Strategic Control
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Strategic Planning
Strategic Planning is the managerial process of
creating and maintaining a fit between the
organization‘s objectives and resources and the
evolving market opportunities.
Also called Strategic Management Process
All organizations have this
Can be Formal or Informal
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The Strategic-Planning, Implementation, and ControlProcess
B i St t i Pl i P
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Business Strategic-Planning Process
External environment
(Opportunity &
Threat analysis)
Internal Environment
(Strength/ Weakness analysis)
Goal FormulationBusiness Mission
Strategy Formulation
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Strategy Formulation
Environmental Analysis
Internal AnalysisCompetitor Customer
Supplier
Regulatory
Social/ Political
Technology Know-How
Manufacturing Know-How
Marketing Know-How
Distribution Know-How
Logistics
Strength & Weaknesses
Identity Core Competencies
Opportunities & Threats
Identify opportunity
Fit internal Competencies with external opportunities
Firm Strategies
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The Marketing Plan
A written document that acts as a guidebook of
marketing activities for the marketing manager
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CONTENTS of MARKETING PLAN
Business Mission Statement
Objectives
Situation Analysis (SWOT)
Marketing Strategy
Target Market Strategy Marketing Mix
Positioning
Product
Promotion
Price
Place – Distribution
People
Process
Implementation, Evaluation and Control
The Marketing Process
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BusinessMission
Statement
Objectives
Situationor SWOT Analysis
ImplementationEvaluation, Control
Target MarketStrategy
Marketing Strategy
Product
Promotion
Place/Distribution
Price
Marketing Mix
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Why a product like radio declined
and now once again emerging as anentertainment medium ?
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What Were the Drivers of This Change ?
Technology ?
Government policy ?
Other media substitutes ?
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Factors
Influencing
Company‟sMarketing
Strategy
l k i i
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Demographics
SocialChange
Economic
Conditions
Political &Legal Factors
Technology
Competition
EnvironmentalScanning
Target Market
ProductDistributionPromotion
Price
External Environment
is not controllable Ever-ChangingMarketplace
External Marketing Environment
Physical / Natural
The macro-environment
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The macro-environment
is the assessment of the external forces that actupon the firm and its customers, that create
threats & opportunities
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P r o d u c t?
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Anything that is offered to the market for
attention, acquisition, use or consumptionthat satisfies a want or a need
Product is . . . . .
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Types of Products
Consumer Products
IndustrialProducts
PRODUCTS
Services
Product Items Lines and Mixes
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Product Items, Lines, and Mixes
Product Item
Product Line
Product Mix
A specific version of a productthat can be designated as adistinct offering among anorganization’s products.
A group of closely-relatedproduct items.
All products that anorganization sells.
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Product Mix
Width – how many product lines a company has
Length – how many products are there in a product line
Depth – how many variants of each product exist within aproduct line
Consistency – how closely related the product lines are in
end use
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Gillette‟s Product Lines & Mix
Blades and Writingrazors Toiletries instruments Lighters
Fusion – 5 blade
Mach 3 TurboMach 3 Series Paper Mate CricketSensor Adorn Flair S.T. DupontTrac II Toni S.T. DupontAtra Right GuardSwivel SilkienceDouble-Edge Soft and Dri
Lady Gillette FoamySuper Speed Dry LookTwin Injector Dry IdeaTechmatic Brush Plus
Width of the product mix
D e p t h
o f t h e p r o d
u c t l i n e s
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What is a Service? Defining the Essence
An act or performance offered by one party to
another (performances are intangible, but may
involve use of physical products)
An economic activity that does not result in
ownership
A process that creates benefits by facilitating adesired change in customers themselves, or their
physical possessions, or intangible assets
Some Industries Service Sector
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Some Industries - Service Sector
Banking, stock broking
Lodging
Restaurants, bars,
cateringInsurance
News and entertainment
Transportation (freight andpassenger)
Health care
Education
Wholesaling and retailing
Laundries, dry-cleaningRepair and maintenance
Professional (e.g., law,architecture, consulting)
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Classification of Services
Pure Tangible Product
Materials / Components
Computers
Major Product with
Minor Services
Product = Service
Major Service with
Minor Product
Business Hotels
Good Transportation
BankingPure Intangible
Service
Major Characteristic of Services
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Intangibility – Services are intangibility cannot be seen,tasted, felt, heard or smelled before purchase.
Inseparability - Services are produced and consumed
simultaneously.
Variability or Heterogeneity – Services are highly variable
Perishability – Services cannot be stored.
Non Ownership - Services are rendered but there is no
transfer of title
Major Characteristic of Services
Th M k ti Mi
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The Marketing Mix
The conventional view of the marketing mixconsisted of four components (4 Ps): Product,Price, Place/ distribution and Promotion.
Generally acknowledged that this is too narrowtoday; now includes , Processes, Productivity
[technology ]People [employees], Physicalevidence
Marketers today are focused on virtually all aspects
of the firm‘s operations that have the potential to
affect the relationship with customers.
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The “8Ps” of Integrated Service
Management vs. the Traditional “4Ps”
► Product elements
► Place, cyberspace, and time
► Process
► Productivity and quality
► People
► Promotion and education
► Physical evidence
► Price and other user outlays
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The Give and Get of Marketing
Great Words on Marketing
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1. ―The purpose of a company is ‗to create acustomer …The only profit center is the customer.‘‖
2. ―A business has two—and only two—basicfunctions: marketing and innovation. Marketingand innovation produce results: all the rest are
costs.‖ 3. ―The aim of marketing is to make sellingunnecessary.‖
4. ―While great devices are invented in theLaboratory, great products are invented in the
Marketing department.‖ 5. ―Marketing is too important to be left to the
marketing department.‖
Drivers of Customer Satisfaction
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Many aspects of the firm‘s value proposition
contribute to customer satisfaction:
The core product or service offered
Support services and systems
The technical performance of the firm
Interaction with the firm and it employees
The emotional connection with customers
Ability to add value and to differentiate as a
firm focuses more on the top levels
Marketers and Markets
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Marketers are focused on stimulatingexchanges with customers who make upmarkets – B2C or B2B.
The market is comprised of people who play aseries of roles: decision makers,consumers, purchasers, and influencers.
It is absolutely essential that marketers have adetailed understanding of consumers, their
needs and wants.Much happens beforeand after the sale toaffect customer satisfaction
Stages of Customer Interaction
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Stages of Customer Interaction
What Changed in Marketing…
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g g
Organize by product units Focus on profitable transactions Look primarily at financial
scorecard Focus on shareholdersMarketing does the marketing Build brands through advertising Focus on customer acquisitionNo customer satisfaction
measurement
Over-promise, under-deliver
• Organize by customer segments
• Focus on customer lifetime value
• Look also at marketing scorecard
• Focus on stakeholders
• Everyone does the marketing
• Build brands through performance
• Focus on customer retention
• Measure customer satisfaction and
retention rate• Under-promise, over-deliver
Old Economy New Economy
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What is customer -
centric?
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Myth 1 – The larger the range of
products, the more customer-centric I am.
Mythbuster – The range of products has
emerged from being
competition-centric.
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Myth 2 – Better technology (read CRM)
leads to better customer service.
Mythbuster – Technologyalone does not deliver,
helps people do.
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Myth 3 – Launch a product and the
customer will start using instantly.- Give a customer a card and he willlearn how to play with it immediately
Mythbuster – Customers need
To be educated too…
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Myth 5 – Just advertise and - You
will sell.
Mythbuster – Advertising will only sell,
Not retain customers.
M th 6 No diffe e e bet ee
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Myth 6 – No difference betweenmarketing & selling
Mythbuster – “Selling focuses on the needs of the seller; marketing on the needs of the
buyer.
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Myth 7 – In the absence of relationships „trust‟ builds financial brands
Mythbuster – Trust is not a differentiator at all…
it is the very minimum that the customer
expects!!
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So what will the differentiators be :
• Technology ?
• Brand ?
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The real differentiator of
customer – centricity in a
commoditised world of financial
products -
Customer Service !
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Thank You