Marketing Fundamentals
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Marketing Fundamentals CUSTOMER-DRIVEN. Einstein created his theories not from experiments, but from thought problems. We’re not Einstein, but this section has more to do with philosophy than practice…. It purpose is to create a mindset…. Think of two occasions when you felt that you

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Marketing fundamentals customer driven

Marketing Fundamentals

CUSTOMER-DRIVEN


Marketing fundamentals customer driven

Einstein created his theories

not from experiments,

but from thought problems.


Marketing fundamentals customer driven

We’re not Einstein, but this section has more to do with

philosophy than practice….

It purpose is to create a mindset….


Marketing fundamentals customer driven

Think of two occasions when you felt that you

were a valued customer.

Why did you feel that way?


Marketing fundamentals customer driven

Think of two occasions when you felt that you

had a negative experience as a customer.

Why did you feel that way?


Marketing fundamentals customer driven

Fundamentals

http://www.youtube.com/watch?v=KkBvzS_fJ2g&feature=player_embedded#


Marketing fundamentals customer driven

The marketing conceptis the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition.

Today most firms have adopted the marketing concept, but this has not always been the case.


Marketing fundamentals customer driven

In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers should be considered only with regard to meeting the needs of consumers. While this philosophy is consistent with the marketing concept, it would not be adopted widely until nearly 200 years later.


Marketing fundamentals customer driven

The Production Concept

Can we produce the product?

Can we produce enough of it?

The Sales Concept

Can we sell the product?

Can we charge enough for it?


Marketing fundamentals customer driven

Examples of Marketing

Concepts

http://www.youtube.com/watch?v=l4seWLW2KhQ&feature=player_embedded


Marketing fundamentals customer driven

Number 1

What (Who) is a Customer?


Marketing fundamentals customer driven

A customer?

Who are we talking about?

Not always clear:


Marketing fundamentals customer driven

Who is a customer?

Take a piece of paper and answer

the following questions:


Marketing fundamentals customer driven

Who is a customer?

1. Is a student a customer?


Marketing fundamentals customer driven

Who is a customer?

1. Is a student a customer?

2. In what ways are they

a customer?


Marketing fundamentals customer driven

  • Who is a customer?

  • Is a student a customer?

  • 2. In what ways are they

  • a customer?

  • 3. In what ways are they

  • not

  • a customer?


Marketing fundamentals customer driven

Is a student a product?


Marketing fundamentals customer driven

Is a student more like a patient?


Marketing fundamentals customer driven

Is the student a partner?


Marketing fundamentals customer driven

Further:

Practically no one tries to sell to everyone……


Marketing fundamentals customer driven

Why?


Marketing fundamentals customer driven

Because:

Not everyone is a Customer!


Marketing fundamentals customer driven

Markets are segmented:


Marketing fundamentals customer driven

Practically no one tries to sell to everyone……

Markets are segmented:

80/20 Rule

Demographics

Psychographics

Needs/Wants

Needs are: Wants backed by resources!


Marketing fundamentals customer driven

IS the customer always RIGHT?


Marketing fundamentals customer driven

Is the customer always right?

NO!

“The cliché is wrong. The right customer

is always right. The wrong customer, is

not right for the selling company.”

Jeffrey J. Fox


Marketing fundamentals customer driven

Okay Customers are:

Profitable

Loyal

Spreads positive WOM

Gives positive referrals


Marketing fundamentals customer driven

Okay customers can:

also be:

Tough, exacting, impatient, challenging, fickle,

exasperating, needy, insistent,

and a pain in the neck.


Marketing fundamentals customer driven

  • Not Okay customers are:

  • “Difficult”

  • The service provider doesn’t care about them

  • 2. The service provider isn’t listening to them

  • 3. The service provider isn’t doing anything to resolve

  • the problem

  • 4. They have been victimized, unfairly treated

  • or taken advantage of

  • 5. The service provider gives the customer the

  • run-around

  • 6. Promises are not kept


Marketing fundamentals customer driven

Not Okay customers are:

About 3% of the population is clinically insane


Marketing fundamentals customer driven

Not Okay customers are:

About 3% of the population is clinically insane

Another 40% is neurotic…………


Marketing fundamentals customer driven

And we just don’t all agree on

things.

http://www.expedia.com/pub/agent.dll/qscr=dspv/htid=11379/crti=7/hotel-reviews


Marketing fundamentals customer driven

Low High

PROFITABLE

Customer Misfits

Spinners

Big Spenders

Underachievers

Low

LOYAL

Win-Back Cust

New Potentials

Advocates

Loyalists

High


Marketing fundamentals customer driven

Student evaluation of teaching taken at random

from the internet as an example.

Teacher A (picked at random… named Smith)

Student 1

“I am still extremely disappointed I took this class.

I took it as an elective just because I thought it would be interesting...

wrong teacher. The tests were so hard; I'm a straight A student

and ended up with my first B. Don't take him…”


Marketing fundamentals customer driven

Teacher A

Student 2

“I like her as a person ,however, I wasn't very fond of her teaching style.

The last month all we did was presentations and were left on our own.

If you don't learn well this way, don't taker her. Otherwise she is pretty good.”


Marketing fundamentals customer driven

Teacher A

Student 3

“HE is a guy. His name is Roland Acosta. He's actually pretty good,

but his classes take FOREVER. Bring a laptop or small

GameBoy and you will be fine.”


Marketing fundamentals customer driven

Is Teacher A:

a good teacher, or a bad teacher….


Marketing fundamentals customer driven

Is Teacher A:

For that matter:

a man or a women?


Marketing fundamentals customer driven

  • Types of “difficult” customers

  • Verbal abusers

  • Blamers

  • Rule Breakers

  • Opportunists

  • Returnaholics

Berry, L.L, and Seiders, K. (2007) “A Cognitive-emotional Theory of Customer

Injustice and Emotional Labor.” Advances in the Psychology of Justice and

Affect. (D. De Cremer, Ed.), 199-226.


Marketing fundamentals customer driven

Not Okay customers are:

(bottom line)

Unprofitable:

i.e., not worth the price you are paying.


Marketing fundamentals customer driven

The wrong customer is wrong.


Marketing fundamentals customer driven

Actually….

All Businesses have Partners:


Marketing fundamentals customer driven

Partners:

Customers

Competitors

Employees

Governments

Society

The Media

To be successful:

All of these must be kept happy!


Marketing fundamentals customer driven

Number 2

The Importance of a Customer Orientation


Marketing fundamentals customer driven

  • Clayson’s Simple Definition:

  • “Marketing is arranging a buyer for a seller.”

  • This means:

  • Marketing is the process of creating

  • satisfying exchanges.

  • 2. Wealth is created through free exchanges.


Marketing fundamentals customer driven

Marketing Concept:

“All marketing strategies should be based on

known consumer needs and/or wants.”


Marketing fundamentals customer driven

Extension:

“All firms and companies have the same product…

that is, a customer.”

Implications…………..


Marketing fundamentals customer driven

Managers get trapped by an inverted

pyramid….


Marketing fundamentals customer driven

Clayson’s Even Simpler Definition:

“Marketing is arranging free exchanges!”


Marketing fundamentals customer driven

“Marketing is arranging free exchanges!”

This means…

  • Marketing is the process of creating satisfying exchanges.

2. Wealth is created through free exchanges.


Marketing fundamentals customer driven

You have a dollar….


Marketing fundamentals customer driven

I have a newspaper…


Marketing fundamentals customer driven

You go into a store to buy a shirt.


Marketing fundamentals customer driven

You go into a store to buy a shirt.

What is the product?

What is the promotion?

What is the price?

What is the place?


Marketing fundamentals customer driven

Number 3

What are Customers Like?


Marketing fundamentals customer driven

We like to think that

our customers are like

these people….


Marketing fundamentals customer driven

We like our customers to be upscale

and aware…..


Marketing fundamentals customer driven

http://www.uni.edu/resources/prospective-students


Marketing fundamentals customer driven

Perception is Reality!!


Marketing fundamentals customer driven

The right Stimulus!


Marketing fundamentals customer driven

Getting and holding Attention!


Marketing fundamentals customer driven

Creating the right Hypothesis!


Marketing fundamentals customer driven

The Importance of Memory!


Marketing fundamentals customer driven

Are Customers Rational?


Marketing fundamentals customer driven

Depends on what is meant by rational…


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)

  • The Pressure of the Environment


Marketing fundamentals customer driven

Is a brain necessary for

learning?

Pavlov


Marketing fundamentals customer driven

How much of a

customer’s behavior is

determined by the

environment?

B.F. Skinner


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)

  • The Pressure of the Environment

  • The Complication of the Psychic


Marketing fundamentals customer driven

How much of a

customer’s behavior is

determined by

unconscious factors?

Sigmund Freud


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)

  • The Pressure of the Environment

  • The Complication of the Psychic


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)

  • The Pressure of the Environment

  • The Complication of the Psychic

  • The Subtlety of Culture


Marketing fundamentals customer driven

How much of a customer’s behavior is

determined by cultural factors?


Marketing fundamentals customer driven

Norms


Marketing fundamentals customer driven

  • Depends on what is meant by rational…

  • The Theory of Utility (economics)

  • The Pressure of the Environment

  • The Complication of the Psychic

  • The Subtlety of Culture

  • The Control of Information


Marketing fundamentals customer driven

Marketing Maven:

A maven (also mavin) is a trusted expert in a particular field, who seeks to pass knowledge on to others. The word maven comes from the Hebrew, via Yiddish, and means one who understands, based on an accumulation of knowledge.


Marketing fundamentals customer driven

Gatekeepers…

http://movies.nytimes.com/2009/12/20/movies/20scott.html


Marketing fundamentals customer driven

Information:

Example: Oliver North and Congress 1987


Marketing fundamentals customer driven

The Iran-Contra Affair


Marketing fundamentals customer driven

5/06/87

“Folks in North’s hometown recall his driving ambition”

Front page story


Marketing fundamentals customer driven

5/06/87 (Same day)

Nothing


Marketing fundamentals customer driven

5/08/87 North begins testimony


Marketing fundamentals customer driven

5/10/87

“North attracts support from sympathetic viewers.”

Front page story


Marketing fundamentals customer driven

5/10/87 (Same day)

Nothing


Marketing fundamentals customer driven

5/11/87

“Poll: Americans believe North but not Reagan.”

Front page story


Marketing fundamentals customer driven

5/11/87 (Same day)

“Poll: Americans believe North but not Reagan.”

Front page story


Marketing fundamentals customer driven

5/12/87

“North comes out as hero during week of hearings”

Front page story


Marketing fundamentals customer driven

5/12/87 (Same day)

Nothing


Marketing fundamentals customer driven

5/19/87

“Contras sack poor village in Nicaragua: Pregnant woman,

3 kids among killed in attack”

Source: NY Times

Top front page story


Marketing fundamentals customer driven

5/19/87 (Same day)

“Reagan urges more funding for Contras”

On page A3


Marketing fundamentals customer driven

5/20/87

“Nicaragua gets more aims” [from the Soviet Union]

First page story


Marketing fundamentals customer driven

5/20/87 (Same day)

Nothing


Marketing fundamentals customer driven

So….

What is news?


Marketing fundamentals customer driven

Information control has become a major

problem/opportunity in a connected society.

http://www.youtube.com/watch?v=5YGc4zOqozo


Marketing fundamentals customer driven

Number 4

What are They Actually Buying


Marketing fundamentals customer driven

Customers do not buy products.

They buy what products DO for them.


Marketing fundamentals customer driven

What does the product

do for you?


Marketing fundamentals customer driven

What products do is not always

obvious or tangible…..


Marketing fundamentals customer driven

What a product does for one person,

may not be what it does for someone else.


Marketing fundamentals customer driven

Buyers, Users, Payers are not always

the same Person.


Marketing fundamentals customer driven

And no….that was not Sarah Palin!


Marketing fundamentals customer driven

Number 5

How to Find Out What Customers Want/Need


Marketing fundamentals customer driven

What is Information?

Information is something that changes

What You KNOW.


Marketing fundamentals customer driven

  • Information is Something that Changes

  • What You KNOW.

  • It is very valuable… and expensive.

  • It has a very pragmatic value.


Marketing fundamentals customer driven

Information:

Value

Dependent upon the value of

decisions that can be made with

a change in what you know.


Marketing fundamentals customer driven

  • Information is Something that Changes

  • What You KNOW.

  • It is very valuable… and expensive.

  • It has a certain value.

  • The amount of information 1/prob.


Marketing fundamentals customer driven

  • Information is Something that Changes

  • What You KNOW.

  • It is very valuable… and expensive.

  • It has a certain value.

  • The amount of information 1/prob.

  • It is property.

  • It always needs to be evaluated.


Marketing fundamentals customer driven

  • Information:

  • Evaluation

  • Who produced it?

  • When was it produced?

  • How was it produced?

  • How was it analyzed?

  • Why was it produced?

  • Who benefits from this information?

  • Why is this information available to me?


Marketing fundamentals customer driven

  • Information:

  • Warning signs:

  • Confirms what you have always known.

  • Confirms what you WANT to believe.

  • Contradicts what you have always known.

  • Is it GOOD THINK?


Marketing fundamentals customer driven

Number 5

Getting to Know the Customer


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

1. Do marketing research…

Check out: www:cba.uni.edu/clayson/mba

for a complete outline for research


Marketing fundamentals customer driven

  • Conflicts between MR and Management

  • Personality: The bottom line is that the manager who is using research is

  • probably unlike the person that is producing it.

  • 2.Research may be critical:

  • 3.Money (expense): At times it is an expense without an explicit bottom line.

  • 4.Time - “need it now”: Managers want information “now;” researchers want

  • to supply it “later.”

  • 5.Intuition (art): Successful managers typically have successful track records.

  • Many have assumed that decision making is an “art,” and “art” and research may

  • be seen as incompatible.

  • 6.Past - Future Orientation: Research is ultimately done on past events,

  • while a manager is asking for research to reduce the uncertainty about the future.

  • 7.Pseudo Research: Researchers do not like to produce pseudo research.

  • Managers many times want information that will never be used for decision making

  • for a variety of reasons.


Marketing fundamentals customer driven

Managers’ Response to Research and Evolution

1. Stage of Ignorance:

2. Stage of Blind Faith:

3. Stage of Disillusionment:

4. Stage of Sophistication:


Marketing fundamentals customer driven

Do-It-Yourself Marketing Research


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

1. Do marketing research…

Check out: www:cba.uni.edu/clayson/mba

for a complete outline for research

2. Start liking your customers

“My job would be great if it weren’t for the customers.”

Some consultants recommend that top managers

spend 50 percent of their time face-to-facewith

actual customers.


Marketing fundamentals customer driven

Getting to Know the Customer

“Spending time with customers is a hundred times

more important than attending staff meetings and

reading monthly reports.”

Jeffrey Fox


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

1. Do marketing research…

Check out: www:cba.uni.edu/clayson/mba

for a complete outline for research

2. Start liking your customers

3. Listen

“It does no good to get close to customers if you

aren’t listening.”

Jennings & Haughton


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

1. Do marketing research…

Check out: www:cba.uni.edu/clayson/mba

for a complete outline for research

2. Start liking your customers

3. Listen

Empathy

Curiosity

Patience


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

4. Don’t be an Info-Snob

“Do you do regular in-depth interviews with the

sales force?


Marketing fundamentals customer driven

Getting to Know the Customer

How to obtain information:

4. Don’t be an Info-Snob.

“Do you do regular in-depth interviews with the

people who interact with customers

(clerks, etc.)?


Marketing fundamentals customer driven

Coast to Coast

Everyone else is a “flyover.”


Marketing fundamentals customer driven

Getting to Know the Customer

“Do you do regular in-depth interviews with the

sales force?

“Do you do regular in-depth interviews with the

people who interact with customers

(clerks, etc.)?

Why Not!!


Marketing fundamentals customer driven

Number 7

Creating a Customer-Oriented Organization


Marketing fundamentals customer driven

Product Development

Don’t be product driven!

Products are the objects of a transaction.

It is the transaction, not the product, that

is important.


Marketing fundamentals customer driven

For example:

If it is the transaction, then

always make it very easy to do the transaction.

Always make it easy for the customer to pay you.

https://online.kitco.com/sellprice/Ordr_Faq.htm

http://www.youtube.com/watch?v=2pkzfjnGoKo


Marketing fundamentals customer driven

  • Product Development

  • The products come from customer

  • needs and/or wants.

  • Products should not come from:

  • What can be done

  • What developers want done


Marketing fundamentals customer driven

Product Development

Don’t throw products over the wall!


Marketing fundamentals customer driven

Destroy the Bureaucracy!!


Marketing fundamentals customer driven

Destroy the Bureaucracy!!

“Blow it up as fast as you can!”


Marketing fundamentals customer driven

Destroy the Bureaucracy!!

“Anyone found guilty of building or

perpetuating bureaucracies should

be tried on charges of management,

malpractice, found guilty, and spend

serious time in the slammer. “

Jennings & Haughton


Marketing fundamentals customer driven

Destroy the Bureaucracy!!

The best idea always win.

Irrespective of where, or from whom, it

comes.


Marketing fundamentals customer driven

Destroy the Bureaucracy!!

The best idea always win.

Reward ideas

Even when they are wrong!


Marketing fundamentals customer driven

Destroy the Bureaucracy!!

The best idea always win.

Reward ideas

Acknowledge people’s contributions.

Positive reinforcement works almost

every time it is tried.


Marketing fundamentals customer driven

All Business is Service!

“People become rich when they

make other people happy.

They become very wealthy

when they make a lot of

people happy.”

Benjamin Stein


Marketing fundamentals customer driven

The Importance of Management

Management

Management

Management


Marketing fundamentals customer driven

The Importance of Management

Management

Management

Management

Service is no better than management!!


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