Marketing Strategy: Key Concepts 3

Customers are increasingly important.
One of multiple stakeholders that need to be addressed (employees, stockholders, suppliers and distributors) ---Grotto Pizza Mission
Corporate culture needs to be consumer-centric (begins with the mission)
Acquire customers (set expectations) versus retain customers (do expectations fit with reality)
Perceived value (quality, service and value) versus delivered value
Beat customer expectations. (delight customers)

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

• 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

Need to build satisfaction through customer relationship development activities.
Relationship Marketing, process of attracting and retaining customers. Add financial benefits, social benefits and structural ties.
Life-time Value of a customer versus cost of acquiring a customer

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 do not ordinarily complain, they simply do not 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

Customer service comments:
Wharton MBA Site
E-mail Autoresponder Wharton, HBS Response, Kellog Response
Wharton Adcomm. taking questions
the least applicant-friendly B-school: Listed Reasons for Wharton
JUDGE THE ADMISSIONS OFFICES
What is Up w/ Kellogg Guy?

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)

Do Mixed Emotions and Advertising Mix?

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 Behavior

Consumer decision-making process:

1.   Need Recognition

2.   Information Search

3.   Evaluation of Alternatives

4.   Purchase Decision

5.   Post Purchase Behavior

got milk? Change consumer attitudes about milk.

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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