Session 2 Connecting with Customers

1. Session 2Connecting with Customers 18th April 2012 - Pooja Bal, Management Consultant

2. Course Design • Understanding Marketing Management • Connecting with Customers • Building Strong Brands • Product Development • Pricing and Promotion Strategies • Distribution and Channel Management • Sales Management • Designing and Managing Services • Marketing Strategy

3. Course Design • Understanding Marketing Management • Connecting with Customers • Building Strong Brands • Product Development • Pricing and Promotion Strategies • Distribution and Channel Management • Sales Management • Designing and Managing Services • Marketing Strategy

4. 2. Connecting with Customers • 4 P’s and 4 C’s of Marketing • Customer Value • Customer Satisfaction and Loyalty • Steps in Segmentation, Targeting and Positioning • Levels of Market Segmentation • Bases for Segmenting Consumer Markets • Bases for Segmenting Business Markets • Market Targeting

5. I. 4 P’s and 4 C’s of Marketing 4 P’s Of Marketing Mix

6. I. 4 P’s and 4 C’s of Marketing

7. II. Customer Value • Customer Perceived Value (CPV) • Total Customer Value • Total Customer Cost Determinants of Customer Perceived Value

8. III. Customer Satisfaction and Loyalty

9. III. Customer Satisfaction and Loyalty • Satisfaction Basedon a comparison of performance and expectations. Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction

10. III. Customer Satisfaction and Loyalty • Loyalty Loyal customers demonstrate the following behaviors and attitudes: • Repeatedly purchase from the organization (preferring and choosing it to others) • Have a high level of satisfaction with the company • Will recommend the company to others • Will trust the company • Will be committed to the company

11. IV. Steps In STP Steps in Market Segmentation, Targeting and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

12. V. Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation, i. e. a commodity) Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. Segment Marketing Different products to one or more segments (some segmentation, i.e. Marriott)

13. VI. Bases for Segmenting Consumer Markets • Demographic Segmentation • Dividing the market into groups based on variables such as: • Age • Gender • Family size or life cycle • Income • Occupation • Education • Religion • Race • Generation • Nationality Most Popular Bases & Easiest to Measure

14. VI. Bases for Segmenting Consumer Markets • Psychographic Segmentation Social Class Lifestyle Personality

15. VI. Bases for Segmenting Consumer Markets • Behavioral Segmentation • Dividing the market into groups based on variables such as: • Occasions • Benefits • User status • Usage rate • Loyalty status • Readiness stage • Attitude toward product

16. VII. Bases for Segmenting Business Markets

17. VIII. Market Targeting • Effective Segmentation Criteria: • Measurable -The segment should be measurable in term of the total size, purchasing power and, demographic, geographic and psychographic characteristics. • Sustainable -The segment should be of sufficient size so as to generate profits; it should also have a potential for growth. • Accessible - It should be reachable and easy to enter or penetrate.- The marketers must be able to deliver the product or service offering and must be able to operate therein.

18. VIII. Market Targeting • Effective Segmentation Criteria: • Differentiable - One segment should be easily differentiated from another;- It should be distinct from others and the people therein should react differently from other segments towards a marketing mix program;- Clear differences in consumer want, needs and preferences for the product must exist across segments.- Homogeneity within the segment; Heterogeneity with other segments. • Actionable - It should be possible to design a marketing program directed towards that segment and serve it effectively and efficiently.- The marketer should be able to react to the need, wants and preferences of the segment with the appropriate marketing mix.

19. VIII. Market Targeting

20. VIII. Market Targeting • Single-segment concentration:-The marketer decides to cater to a single segment only.- Concentrated marketing; the marketer understands the needs and wants of the segment and focuses on one segment only.- Example: Rolex watches • Selective specialization or Multi-segment:- The marketer caters to a two or a few segments with different marketing mixes.- It offers varied product and service offerings with distinct marketing mixes to the various segments. Example: Maruti, Soaps and detergents from Procter and Gamble, Tata Group of Hotels. • Product specialization: -The marketer deal with varying products in the same product line; it adapts the product to sell to several different market segments.Example: Gillette

21. VIII. Market Targeting • Market Specialization: • The marketer deals with one specific market only; he tries to meet many needs of a particular customer group.Example: The various Ordinance Factories in India exist to cater to meet the various needs of the Defense forces only. • Full market coverage: - Here the marketer caters to the entire market. -It could take two forms: Differentiated and Undifferentiated.Differentiated: The marketer would operate in the whole market and offer different products for the various segments; Example: IBM, HP.Undifferentiated: Mass marketing; The marketer would treat the market as a single segment and offer a single product. He would ignore differences amongst various segments; Example: Salt, Pepsi

22. Thank You!