Chapter 2 Being Customer Oriented Market Orientation Customer Orientation JW:sel:H/AW#5.
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Transcript of Chapter 2 Being Customer Oriented Market Orientation Customer Orientation JW:sel:H/AW#5.
Chapter 2Chapter 2
Being Customer Being Customer OrientedOriented
Market OrientationMarket Orientation
Customer Customer OrientationOrientation
JW:sel:H/AW#5
Customer Customer CommitmentCommitment::
How Market Leaders Do ItHow Market Leaders Do It Through masterfully Through masterfully creating and creating and
delivering valuedelivering value to their highly to their highly
satisfied and loyal customerssatisfied and loyal customers
Greatness in marketing and customer Greatness in marketing and customer services becomes a services becomes a function of function of attitude, not resources.attitude, not resources.
The Traditional Marketing The Traditional Marketing Concept Concept
Customer Customer satisfaction at a satisfaction at a
profitprofit Stresses conquest Stresses conquest
marketing (getting new marketing (getting new business)business)
Relationship Marketing Relationship Marketing
Concept Concept (RMC)(RMC)Evolved due to highly competitive Evolved due to highly competitive
global service marketsglobal service markets
2 objectives2 objectives:: Maintaining and upgrading Maintaining and upgrading
customer relationships customer relationships (retention strategies) (retention strategies)
Growing business by finding Growing business by finding new customers and creating new customers and creating
long-term valuelong-term value
Becoming Marketing Oriented
Marketing VariablesMarketing Variables Sales OrientedSales Oriented Market OrientedMarket Oriented
Starting PointStarting Point OrganizationOrganization Target marketsTarget markets
Marketing FocusMarketing Focus Product/service Product/service Customer needsCustomer needs
Customer FocusCustomer Focus New business (attraction)New business (attraction) Existing customer base Existing customer base (growth and retention)(growth and retention)
Competitive EdgeCompetitive Edge Lowest delivered costLowest delivered cost Superior quality or serviceSuperior quality or service
Product StrategyProduct Strategy Generic productGeneric product Augmented productAugmented product
Promotional StrategyPromotional Strategy Selling/advertisingSelling/advertising Integrated marketing Integrated marketing communications (IMC)communications (IMC)
Pricing StrategyPricing Strategy Maximizing profit marginsMaximizing profit margins Profitable use of resourcesProfitable use of resources
Marketing ObjectiveMarketing Objective Sales volumeSales volume Customer satisfactionCustomer satisfaction
Planning ApproachPlanning Approach ReactiveReactive ProactiveProactive
Time PerspectiveTime Perspective Short term (tactical)Short term (tactical) Medium and long term Medium and long term (strategic) (strategic)
The The MMarketing arketing CContinuumontinuum
Market DrivingMarket DrivingMarket DrivingMarket Driving
Market DrivenMarket DrivenMarket DrivenMarket Driven
SalesSalesSalesSales
ProductProductProductProduct
ProductionProductionProductionProduction
Market OrientationMarket Orientation A market orientation provides impetus for A market orientation provides impetus for
building an organizational culture which:building an organizational culture which:
Puts customers firstPuts customers first
Creates superior value for customersCreates superior value for customers
Leads to increased overall business performanceLeads to increased overall business performance
Employees of marketing oriented companies become value-Employees of marketing oriented companies become value-
addersadders
Employees of marketing oriented companies know how to Employees of marketing oriented companies know how to
listen to and respond to customerslisten to and respond to customers
Market OrientationMarket Orientation Constructs Constructs
andand MModelsodels
Narver & SlaterNarver & Slater:: Customer OrientationCustomer Orientation Competitor OrientationCompetitor Orientation Interfunctional Coordination Interfunctional Coordination
Kohli & JaworskiKohli & Jaworski:: Intelligence GenerationIntelligence Generation
Intelligence DisseminationIntelligence Dissemination ResponsivenessResponsiveness
The Market Orientation ProcessThe Market Orientation Process
Market orientationMarket orientation involves learning involves learning about customers and competitorsabout customers and competitors
FFirms operating in a competitive industry irms operating in a competitive industry areare most likely to benefit from most likely to benefit from a market orientation a market orientation
MMarket orientation inputs are valuable for arket orientation inputs are valuable for formulating an initial definition of your formulating an initial definition of your market and for staying “in touch” with market and for staying “in touch” with your customer baseyour customer base
Market Driving Vs.Market Driving Vs. Market Driven CompaniesMarket Driven Companies
Market driving companies go beyond accepting given Market driving companies go beyond accepting given market structures and behaviorsmarket structures and behaviors
Market driving firms shape or change markets/Market driving firms shape or change markets/
sectors by sectors by eliminating, adding, or modifyingeliminating, adding, or modifying the players the players in markets and their functionsin markets and their functions
Market driving companies rewrite industry rules and Market driving companies rewrite industry rules and compete in new market arenascompete in new market arenas
Market Driving Vs.Market Driving Vs. Market Driven Companies – cont’dMarket Driven Companies – cont’d
Market driving companies have Market driving companies have unique business systems and unique business systems and ideasideas
Market driving companies deliver Market driving companies deliver
large leap in customer valuelarge leap in customer value
Developing aDeveloping a
Customer-Oriented Customer-Oriented OrganizationOrganization
Customer-centric marketing emphasizes Customer-centric marketing emphasizes understanding and satisfying needs, wants, and understanding and satisfying needs, wants, and resources of individualsresources of individuals and customers rather than and customers rather than those of mass markets/segments (Sheth, et al., )those of mass markets/segments (Sheth, et al., )
Table 2-2 Table 2-2
Contrast of New CustomerizationContrast of New CustomerizationFramework and Old Marketing ModelFramework and Old Marketing Model
Becoming Customer Oriented
A customer oriented business culture:A customer oriented business culture:
Top management’s valuesTop management’s values Employee inputEmployee input Interdepartmental dynamicsInterdepartmental dynamics Organizational systemsOrganizational systems Responses to environmentResponses to environment Dual customer and competitive Dual customer and competitive emphasesemphases
Long term view of business/valueLong term view of business/value
Regis McKenna’s Marketing Regis McKenna’s Marketing PhilosophyPhilosophy Marketing is the responsibility of everyone in the Marketing is the responsibility of everyone in the
organizationorganization
Customer orientation Customer orientation equalequals organizational function s organizational function rather than departmental as in marketing departmentrather than departmental as in marketing department
A customer orientation is a service organization practicing A customer orientation is a service organization practicing Japanese style marketingJapanese style marketing
Okyaku-samaOkyaku-sama – “honored customer” or the “customer is – “honored customer” or the “customer is God God
What Customers Require What Customers Require From Companies From Companies
Today’s customers are quite smart andToday’s customers are quite smart andsophisticated and looking for companies that::sophisticated and looking for companies that::
Create Create maximum valuemaximum value for them based for them based on their needs and wantson their needs and wants
Demonstrate that they Demonstrate that they value their value their customers’ businesscustomers’ business
Characteristics of New Characteristics of New Value-Seeking Customers Value-Seeking Customers Choice-seekingChoice-seeking DemandingDemanding KnowledgeableKnowledgeable Believe that loyalty must be earnedBelieve that loyalty must be earned Price consciousPrice conscious Environmentally awareEnvironmentally aware Convenience-orientedConvenience-oriented
MMarket arket MMyopiayopia MMarket arket MMyopiayopia
Organizations must avoid marketOrganizations must avoid market
myopiamyopia (forgetting customer needs) (forgetting customer needs) byby::
■■ Overcoming complacencyOvercoming complacency
■■ Staying relevant in the Staying relevant in the
marketplace/spacemarketplace/space
■ ■ Be creative in programs and processes Be creative in programs and processes
Market Myopia - cont.Market Myopia - cont. Market Myopia - cont.Market Myopia - cont.
Organizations must avoid market myopia (forgetting customer needs) by:
■■ Adapt and be flexible – responsive/proactive to market conditions and tastes
■ ■ Use a Kaizen philosophy –
continuous Improvement
TheThe Bias Bias forfor Action Continuum Action Continuum
Non-responsiveNon-responsive
ReactiveReactive
ResponsiveResponsive
ProactiveProactive
AnticipatoryAnticipatory
(Adapted from Barrett H. (1996)
Marketing Approaches to Achieve Marketing Approaches to Achieve Customer FocusCustomer Focus
Customer oriented organizations build Customer oriented organizations build on the marketing concept on the marketing concept
((market orientation is the firm’s implementation of the market orientation is the firm’s implementation of the marketing conceptmarketing concept););
■■ Designing customer-driven processes and programs Designing customer-driven processes and programs ■ ■ Establish a strong marketing information systemEstablish a strong marketing information system ■■ Segment and target marketsSegment and target markets ■ ■ Hire the best talentsHire the best talents
■■ Stress operational efficiencyStress operational efficiency■■ Continually measure and fine-tune their customer Continually measure and fine-tune their customer
focusfocus
Trigger PointsTrigger Points ofof CCustomer ustomer
VValuealue
Company/customers (marketing mix)
Employees/customers Employees/customers (service providers)(service providers)
Technology/customersTechnology/customers
(e-marketing mix)
Customer-Oriented Customer-Oriented Marketing ApproachesMarketing Approaches
Customer
Marketing Service E- Marketing Mix Providers Mix
CustomerCustomer
The E-Marketing Mix TaxonomyThe E-Marketing Mix Taxonomy
Adapted from Kalyanam, K. and McIntyre, S. (2002) The e-marketing mix: a contribution of the e-tailing wars, Journal of the Academy of Marketing Science, 30 (4), pp. 487-499.
PProductroduct PricePrice
PPlacelace PPromotionromotion SSales Promotionales Promotion PPersonalizationersonalization
PPRIVACY RIVACY
CCommunityommunity SSite ite SS e c u r i t y e c u r i t y