Retained
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Retained 95%. 133,000. Satisfied 70% (140,000). Not retained 5%. -7,000. Retained 90%. 5,400. Do Complain 10%(6,000). Not Retained 10%. Customer Base 200,000. -600. Dissatisfied 30% (60,000). Retained 22%. 11,800. Don’t Complain 90% (54,000). Not Retained 78%. -42,120.

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Customer Base 200,000

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Customer base 200 000

Retained

95%

133,000

Satisfied

70% (140,000)

Not retained

5%

-7,000

Retained

90%

5,400

Do Complain

10%(6,000)

Not Retained

10%

Customer

Base

200,000

-600

Dissatisfied

30% (60,000)

Retained

22%

11,800

Don’t Complain

90% (54,000)

Not Retained

78%

-42,120

New Customers Needed

24.86%

49,720


How likely are you to buy this product or brand again on your next purchase

How likely are you to buy this product or brand again on your next purchase?


Customer life expectancy and customer retention

Customer Life Expectancy and Customer Retention

Customer Life (N)

(given rate of customer retention)

Customer Life (purchase periods)

CR = Customer Retention Rate

Retention rate


Lifetime value of a customer

LifetimeValueof a Customer


Marketing strategy

Marketing strategy


Outline

Outline

  • Strategic market planning

  • Offensive and defensive strategies

  • Building a marketing plan


Strategic market planning

Strategic market planning

  • Specify strategic direction for each product/market and to allocate resources in a way that will bring about desired short- and long-run performance

  • Requires an assessment of:

    • Business performance

    • Market attractiveness

    • Competitive position


Market attractiveness

Market attractiveness

  • Market forces

    • Market size

    • Growth rate

    • Buyer power

  • Competitive environment

    • Number of competitors

    • Price rivalry

    • Ease of entry

  • Market access

    • Customer familiarity

    • Channel access

    • Sales requirements


Competitive position

Competitive position

  • Differentiation position

    • Product quality

    • Service quality

    • Brand image

  • Cost position

    • Unit cost

    • Transaction cost

    • Marketing expenses

  • Marketing position (presence)

    • Market share

    • Brand awareness

    • Distribution


Offensive strategies

Offensive strategies

  • Invest to grow

    • Invest marketing resources to grow the market or market share

  • Improve position

    • Invest to improve and/or strengthen competitive position

  • New market entry

    • Invest to enter new attractive markets or develop new product markets


Defensive strategies

Defensive strategies

  • Protect position

    • Invest to protect market share and competitive advantage

  • Optimize position

    • Optimize price-volume and marketing resources to maximize profits

  • Monetize

    • Manage market position for maximum cash flow with limited marketing resources

  • Harvest/Divest

    • Manage the product for maximum short-run cash flow or minimum losses


Strategic market plans

Strategic market plans

Market attractiveness

Competitive position


Building a marketing plan

Building a marketing plan

  • Creativity versus structure

  • Why marketing plan?

    • Identifying opportunities

    • Focused market strategy

    • Resource allocation

    • Performance roadmap

  • Building a marketing plan


Building a marketing plan cont

Building a marketing plan cont.

  • Part I – Situation analysis (where are we now?)

    • Step 1: Current situation

    • Step 2: SWOT analysis

  • Part II – Marketing strategy (where do we want to go?)

    • Step 3: Strategic market plan

    • Step 4: Marketing mix strategy

  • Part III – Performance plan (what is the expected impact?)

    • Step 5: Develop a revenue plan + marketing budget

    • Step 6: Develop a profit plan

    • Step 7: Performance review


Current situation

Currentsituation

  • Analyzing customers

    • Needs analysis

    • Decision making processes

  • Analyzing context

    • Demographic environment

    • Economic environment

    • Socio-cultural environment

    • Political/legal environment

    • Technological environment

    • Natural environment

  • Analyzing the company

    • Analysis of the business model

    • Competitive advantage

    • Collaborators and complementers analysis

  • Analyzing competitors


Building a marketing plan cont1

Building a marketing plan cont.

  • Part I – Situation analysis (where are we now?)

    • Step 1: Current situation

    • Step 2: SWOT analysis

  • Part II – Marketing strategy (where do we want to go?)

    • Step 3: Strategic market plan

    • Step 4: Marketing mix strategy

  • Part III – Performance plan (what is the expected impact?)

    • Step 5: Develop a revenue plan + marketing budget

    • Step 6: Develop a profit plan

    • Step 7: Performance review


Swot analysis

SWOT analysis

  • External factors

    • Opportunities

    • Threats

  • Internal factors

    • Strengths

    • Weaknesses


Building a marketing plan cont2

Building a marketing plan cont.

  • Part I – Situation analysis (where are we now?)

    • Step 1: Current situation

    • Step 2: SWOT analysis

  • Part II – Marketing strategy (where do we want to go?)

    • Step 3: Strategic market plan

    • Step 4: Marketing mix strategy

  • Part III – Performance plan (what is the expected impact?)

    • Step 5: Develop a revenue plan + marketing budget

    • Step 6: Develop a profit plan

    • Step 7: Performance review


Marketing plan

Marketing plan

  • Purpose

    • A marketing plan lays out a campaign to fulfill a company’s marketing strategy

  • Content

    • Executive summary

    • Table of contents

    • Summary of current situation

    • Assessment of market opportunity

    • Summary of the company’s marketing strategy

    • A marketing budget

    • Forecast unit sales and revenues

    • Plan for monitoring and evaluating action plans


Dell computer

Dell Computer

  • Graphs copied from:

    • www.value-based-marketing.com/uncategorized/what-would-you-do-with-dell-computer/#more-21

  • What would you do with Dell computer?


Dell computer1

Dell computer

  • ”Create a better way to buy a computer”

  • Reduced distribution costs: By cutting out the middleman, distribution costs were reduced giving the company a competitive price position.

    • Improve the buying experience: Dell’s knowledgeable staff had expertise to help customers who were frequently unknowing. In contrast, IBM, Apple and others were selling through resellers who were not necessarily knowledgeable about the product. Michael Dell surmised that customers would find value in talking to staff who had good product knowledge and could help guide purchase decisions to suit the customers’ needs.

    • Guide future product development: The direct selling model gave Dell first-hand knowledge of customers’ needs.


How has dell responded

How has Dell responded?

  • Improve core business

  • Shift portfolio to higher-margin offerings

  • Balance liquidity, profitability, and growth


Sources

Sources

  • Pride & Ferrell: Ch. 1, 2 & 3

  • Best, Roger J. (2009): Market-Based Management: Strategies for Growing Customer Value and Profitability, 5th ed., Pearson Prentice Hall, New Jersey (ISBN-13: 978-0-13-233653-6)


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