Marketing in the New Economy: Beyond Product and Service.

Think of Customer Value

Asep Hermawan Trisakti University

Chapter Questions

Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management

What is Marketing ?

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

What is Marketed?

Goods Services Events and experiences Persons

Places and properties Organizations Information Ideas

Key Customer Markets

Consumer markets Business markets Global markets Nonprofit/Government markets

Core Concepts of Marketing

Target Markets & Segmentation Needs, Wants, and Demands Product or Offering brands Value and Satisfaction Exchange and Transactions

Relationships and Networks

Marketing Channels Supply Chain Competition Marketing Environment , Marketing Planning

The Four Ps The Four Cs

Marketing Mix Mix Product

Place

Customer Solution

Price

Promotion

Convenience

Customer Cost

Communication

Company Orientations
Production Concept Product Concept Selling Concept Marketing Concept Holistic Concept

Company Orientations Towards the Marketplace

Production Concept Product Concept
Consumers prefer products that are widely available and inexpensive
Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors

Selling Concept
Marketing Concept

Company Orientations Towards the Marketplace

Holistic Concept
Considering society welfare

Marketers adhere to principles of social responsibility in the marketing of their goods and services; that is, they must endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole.

Traditional Organization Chart

Top Management

Middle Management

Front-line people

Customers

Evolving Views of Marketings Role

Production Marketing
Customer

e. The customer as the controlling function and marketing as the integrative function

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Top management

Marketing Management Tasks

Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating longterm growth

Functions of CMOs
Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology

New Consumer Capabilities

A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Internal Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.

Performance Marketing
Financial Accountability Social Responsibility Marketing Social Initiatives Corporate social marketing Cause marketing Corporate philanthropy Corporate community involvement Socially responsible business practices

Marketing Management Tasks

Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth

Asep Hermawan Trisakti University

Services dominate modern economy Perekonomian Modern didominasi oleh organisasi jasa. Dinegara-negara maju umumnya jasa mencapai lebih dari 70 persen perekonomian. Demikian juga dalam hal penyerapan tenaga kerja

JASA MENGALAMI TRANSFORMASI DARI KONSEP TRADISIONAL SUATU TRANSAKSI KE EXPERIENCE

Experience vs. Service

Providing intangible activities, memorable events, in a personal way.

In today's economy its important to provide people with services, or something memorable, to take away from their experience

Beyond products and services

Goods and Services are no longer enough. Staging experiences is important to engage clients. Making that direct connection with the customer is important.

Your company is your stage.

From Commodity to Experience

Cost of coffee bean when harvested= $0.50/lb Value realized by Starbucks from selling a cup of coffee= $230/lb An increase of value ?

commodity

product

Service Experience

The Moment of Truth

Creating Memorable Guests Experience will depend on How to Manage:

The Moment of Truth

Characteristics of Outstanding Service Organization

Four Characteristics of Outstanding Service Organization Understanding the customers moment of truth A well-conceived strategy for service. It differentiate the company from competitors Customer-friendly system Customer-oriented front-line people

The Service Triangle

The service Strategy

The CUSTOMER The SYSTEM The PEOPLE

Source: Karl Albrecht & Ron zemke. Service America( Mc-graw-Hill,2002)

Moment of Truth
Moment of Truth
Are episode in which the customer comes into contact with some aspect of your organization and gets an impression of the quality of service

Each of us has a storehouse of moments of truth from our life experiences. We remember moments when it seemed that people or systems or both went out of their way to be difficult of unhelpful. And we recall shining moments when we felt appreciated, cared for, care about and genuinely valued

When Moments of truths go Unmanaged, the quality of service regress to mediocrity

The Important of Corporate Culture

Corporate culture: The pattern of shared values and beliefs that give the members of an organization meaning and provide them with rules for behavior in the organization . Informally defined as the way we do things around here Service Culture ..
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization. - Christian Grnroos (1990)

The Critical Importance of Service Employees They are the service.

They are the organization in the customers eyes. They are the brand. They are marketers. Their importance is evident in:
the services marketing mix (people) the service-profit chain the services triangle

The Power of One

Every encounter counts

Employees are the service

Every employee can make a difference Through their actions, all employees shape the brand

The Services Marketing Triangle

Company (Management)

Internal Marketing
Enabling the promise

External Marketing
Making the promise

Providers

Customers

Interactive Marketing
Delivering the promise
Source: Adapted from Bitner, 1995; Grnroos, 2000; Kotler and Keller, 2006.

Making Promises
Understanding customer needs Managing expectations Traditional marketing communications Sales and promotion Advertising Internet and web site communication

Keeping Promises
Service delivery
Reliability, responsiveness, empathy, assurance, tangibles, recovery, flexibility

Face-to-face, telephone & online interactions The Customer Experience Customer interactions with sub-contractors or business partners The moment of truth

Enabling Promises
Hiring the right people Training and developing people to deliver service Employee empowerment Support systems Appropriate technology and equipment Rewards and incentives

Human Resource Strategies for Delivering Service Quality through People

Think of Customer Value

Creating, Communicating and Delivering Superior Customer Value and Managing Customer Relationship in ways that benefit Organization and its Stakeholders

Value Hierarchy

Unanticipated Desire

Expected Basic

Customer
A Customer is the most important Visitor on our premises. He is not dependent on us, We are dependent on him. He is not an interruption of our work, He is the purpose of it. He is not an outsider to our business, He is a part of it. We are not doing him a favor by serving him, He is doing us a favor by giving us An opportunity to do so. - Mahatma Gandhi, the Greatest Servant to Humanity of the Century

A Customer is
Anyone We need for our success and achievements

Service is .. To deliver the best possible

value to meet customers needs and (whenever possible) exceed customers expectations as total experience with our products, processes, and people or .. Everything they need and expect from us
Service Quality(SQ) Center Indonesia, 2008.

What Business are you in? What is the core of your business? What do the customers expect from you? What Value do you offer?