Value of Customer and Differentiate Strategic Marketing Planning PDF

Value of Customer and Differentiate Strategic and Marketing Planning Customer loyalty is founded on excellent customer services. The creation of customer value does not rely on marketing alone. It compasses other functions such as sourcing, operating, processing, communication, human res...

Value of Customer and Differentiate Strategic and Marketing Planning Customer loyalty is founded on excellent customer services. The creation of customer value does not rely on marketing alone. It compasses other functions such as sourcing, operating, processing, communication, human resource services, administration, finance and accounting. Building Customer Value Customer value is defined as the satisfaction derived from what a customer may experience or expect by choosing a particular action relative to the cost of that action. The action can be a purchase, a visit, an order, or a sign up. The cost refers to anything that can be given up to receive the desired product or service which can be in the form of money. time, knowledge, data or others. Levels of Customer Value The levels of customer value indicate what the consumer expect and do not expect from their purchases. Basic and expected levels. These levels include the basic requirements of conducting a business. For instance, restaurants are expected to have a spacious dining area and clean tables and utensils. If these requirements are not met by the business, it cannot provide high quality customer value.  Desired customer value. This involves what the customers want from the purchase or service experience. This is the first opportunity for a business to get ahead of the competition. For example, a retail shop can provide friendly and helpful staff who can assist the customers in making the right choices. Unanticipated customer value. It pertains to an unexpected purchase or service experience that may go beyond what the customers desire. For example, in a gasoline station, the gasoline boy cleans the window after filling up the customer's gasoline tank without an extra charges. Types of Customers There are four types of customers based on projected customer retention and loyalty to the brand. 1. Strangers- are customers whose needs do not fit the company's offerings. The company does not need to invest and exert effort to win them. 2. Butterflies-as the name implies, are not loyal to specific brand because they keep on looking for the best deals which may lead to patronizing other brands. The company can enjoy profits from these customers only for a short period. 3. True friends have needs that match the company's offerings. They make repeat purchases and patronize the brand as long as it satisfies their needs. The company must invest in these customers and strengthen its relationship with them. 4. Freeloaders- are loyal but not profitable because of the limited fit between their needs and the company's offering. For example, a few customers of a salon patronizes its services regularly but do not generate enough profit to sustain the maintenance costs, it can earn only if it raises the prices of its services. Relationship Development Strategies Recent research shows that loyal customers prove to be more profitable than ordinary customers. This is the reason why companies are challenged to maintain customer loyalty. Companies should practice the following relationship development strategies to retain loyal customers: 1. Communicate with customers frequently and effectively. It is important to always get in touch with customers through e-mail and social networking sites especially in the new normal situation. Provide various means to give immediate feedback (e.g., online customer 2. Offer customer rewards. Customer loyalty programs, which include special discounts, freebies, perks, may work well for various types of products and services. These encourage customers to remain loyal to the brand because they are rewarded for their patronage. 3. Conduct special events and provide sponsorship. Companies can hold or sponsor parties, concerts, contests, and the like to boost interaction among loyal customers and company representatives. 4. Enhance customer service. Some company outsource their services to third party organizations to cater complaints and inquiries, promote their latest offerings and provide technical support. 5. Utilize languages to reach a wider customer base. Marketers can create promotional materials in different languages to cater specific regions. Consumers can also now choose the language they would like to use to communicate with customer service representative Customer Service in the Philippine Business Enterprise The success of our home-grown companies lies not just on their offerings but also on their customer service. Local business now utilizes customer service tools that fit our customer- oriented culture and extensive technology usage. 1. Email and SMS-also help businesses communicate with their clientele more easily as most consumers regularly check their inboxes. 2. Social Networking sites- aside from their primary function of connecting people, have become a channel for netizens to ask for customer support. Telecom Companies promptly responds to inquiries and complaints on social media and redirects the customer to the site's private messaging system for further assistance. 3. Live chat support - facilitates real time correspondence between customer and the company representative. Lesson 2: Distinguish Between Strategic and Marketing Planning in Terms of Objectives and Processes Strategic Marketing Defined Strategic marketing is defined as the general plan of action with the company vision and goals. This is carefully thought-out course of action developed for the purpose of achieving a desired result such as profitability and high productivity.  The Strategic Marketing Process The strategic marketing process seeks to establish a clear and concerned direction for all marketing activities of an organization. It includes plan to reach specific goals/objectives. Step 1: Mission Identification The Company's mission statement is articulated. A mission statement defines what an organization is, why it exists, its reason for being, its primary customers, the products and services its produces, and its geographical area of operation. Step 2: Situation Analysis This step assesses and evaluate the market, customers, competitors and the company's internal and external environment. The objective is to identify the company's strengths and weaknesses, as well as the available opportunities and threats. Step 3: Objective Setting Objectives are marketing targets that are Specific, Measurable, Attainable, Reliable and Time-bound (SMART). These enable a company to control its marketing plan and provide a consistent focus for all functions of an organization. These objectives include sales revenues, market share and profits. They are used as basis for strategy selection and development. Step 4: Marketing strategy development The development of a marketing strategy involves market segmentation, identification of target market, positioning, selection of board marketing strategies, and the translation into action plan. Strategies can be broadly classified into three categories. These are cost leadership, differentiation, and focused. Cost Leadership This is a strategy primarily for achieving low-cost leadership among industry competitions. Cost leadership can be achieved through low-cost supply contracts, overhead expense control, economies of scale, and comprehensive cost- cutting efforts, among others. Example: While 16 desk fan ordinarily retail for P1,000.00 a local appliance brand is able to market the same at P635.00 through mass production. Differentiation Differentiation seeks to achieve superior product attributes and features that are different from industry competitors. This result pronounced consumers preference for the company's products. Example: A mobile phone brand introduces its version of the smartphone that does not have a keyboard but is activated and controlled by thought. Focused Efforts are concentrated on a relatively small but profitable market. The development of products and services primarily ensures that the needs and wants of this market are addressed and that satisfaction is provided. Example: A convenience store that concentrates on the very high-end niche market by converting its operations into convenience stores with superior customer service, selling purely imported and highly quality products and gourmet food prepared by resident's chef. Cost leadership, differentiation and focused strategies are implemented through the following sub-categories: 1. Forward integration. This involves gaining ownership or increased control over distribution of retailers. 2. Backward integration. This involves gaining ownership or increased in control over supplies. 3. Horizontal integration. This involves purchase of or increased control over competition. 4. Market penetration. The objective of this strategy is to increase market share of current products or services in current markets through greater and more intensive marketing efforts. 5. Market Development. This strategy involves the introduction of existing products or services into a new geographical area or market. 6. Product development. This strategy involves the improvement of current products or services or the development of new product with the purpose of increasing sales. 7. Related diversification. This involves introducing new related products or services. 8. Unrelated diversification. This involves introducing new but unrelated products or services. 9. Retrenchment. This involves halting or revising declining sales and profits through costs or asset reduction. 10. Divestiture. This involves selling all of a company's asset as a whole, for their tangible worth. 11. Liquidation. This involves selling all of a company's asset, in parts, or as a whole , for their tangible worth. Step 5. Strategy evaluation and control After the strategy is developed, periodic, monitoring and evaluation are needed. This is necessary to identify deviations and make necessary adjustments and corrections. Tactical Marketing Defined Tactical marketing refers to the actions a company undertake in order to execute an organization's strategy. It also refers to a detailed action program covering a shorter period. Tactical Marketing Process Complementing the strategic marketing process, the tactical marketing process determines the means or tactics to implement the strategies. In writing the marketing plan, one should indicate the marketing tactics needed to achieve the marketing strategy. These tactics must cover the factors that address consumer needs and wants product, price promotion place, people, process, and physical evidence 1. Prepare an action plan List down the steps in delivering each tactic and note important details such as time frame, suppliers, requirements, issues, and persons in charge. An action plan is a soquential series of marketing activities. 2. Name the necessary resources and monitor the allocated budget. Get quotations for all elements of the proposal tactics and make a detailed budget plan. M sure that the budget can support the tactics because marketing costs can increase quickly. Also, assign a person to monitor the budget throughout the marketing campaign. 3. Identify how the success of the tactics will be measured. Outline how to evaluate the effectiveness of the tactics by setting goals and benchmarks. This will help in implementing changes or improvements on the tactics. For example, one of the tactics of a start-up shoe business is to participate in bazaars to introduce the brand to the market and generate leads. The measure of the tactic's success maybe a specific number of customers or pairs of shoes sold during the event. Thank you for Listening!