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Marketing & Customers Stage 2. Marketing & Customers. Overview Slide Product /Services Differences Service - the Customers Perspective Service Management Within Marketing & Price Setting Strategies Consultative Selling - Where the rubber meets the linoleum. Service / Product Differences. - PowerPoint PPT Presentation
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Marketing & CustomersStage 2
Overview Slide
• Product /Services Differences
• Service - the Customers Perspective
• Service Management Within
• Marketing & Price Setting Strategies
• Consultative Selling - Where the rubber meets the linoleum
Marketing & Customers
Service / Product DifferencesWhat is a Service?
“ Any act or performance that one party can offer another, is essentially intangible, does not result in the ownership of anything. Its production may or may not be tied to a physical product”
“ ..Economic activities that provide time, place and form utility, while bringing about a change in or for the receiver of the service”
or perhaps
“something that may be bought & sold,
but cannot be dropped on your foot.”
Service /Product Differences
4 broad areas of difference
• Intangibility• Variability• Perishability of output• Inseparability between production and
consumption
Service / Product Differences•Services as intangibles•Greater involvement of customers in the
production process•People as part of the product•Difficulties in maintaining quality control
standards•Harder for consumers to evaluate•Absence of inventories•Relative importance of the time factor•Structure and nature of distribution channels
Product Life Cycle
Losses/Investment ($)
BCG Growth – Share Matrix
DOGCASH COW
PROBLEM
CHILDSTAR
20%
STRONG
10%
WEAK
HIGH LOW1.0 0.1
P ro d
u ct-
mar
ket g
row
t h (
p erc
enta
ge)
Objective: Create Balance Compare to nearest competitorRelative Market Share
Market Attractiveness/Business Position Matrix
High
Medium
Low
Mar
ket A
ttra
ctiv
enes
s
MediumStrong Weak
High overall attractiveness
Medium overall attractiveness
Low overall attractiveness
The area of each circle represents the relative dollar sales on the matrix
Business Strength
ANSOFF (Growth) Matrix
DiversificationMarketDevelopment
New
ProductDevelopment
MarketPenetration
Same
NewSame
Products/Services
Markets/Clients
Service - the Customers Perspective
Understanding Customer PrioritiesCustomer Value
Broad definition of Value“The v alue of a product/service is its ability to meet
a customer’s priorities.”Customer priorities are things so important that
customers will pay a premium for them – or when they can’t get them will switch suppliers
Key Drivers of Value
The SERVQUAL Model
• Assurance
• Empathy
• Tangibles
• Reliability
• Responsiveness
The Customer Value Pyramid
PRICE
SERVICEQUALITY
Integrated Value
Understanding how customers really feel allows you to anticipate changing priorities
• Don’t ask customers what they want• Look at how their priorities have changed over time• Identify latent needs or values not being provided
Integrated Value
Integrating complex customer values requires you to be truly customer:
The traditional value chain:
Internal Focus
Assets /Corecompetencies
Inputs, RawMaterials
ProductOfferings
Customers
Integrated Value
Modern Value Chain
Customer Priorities
Channels Offerings InputsAssetsCore
Competencies
Integrated ValueOrganisationOrganisation
CustomersCustomersEmployeesEmployees
Satisfaction, Quality, Brand loyalty
InternalMarketing
TraditionalMarketing
RelationshipManagement
Doing some market research
• The Problem or area of interest
• Hypothesis or research question
• Plan for doing the research
• Data gathering
• Analyse and explain the result
• Make recommendations
Steps in Market Research
Purpose: To find out what the customer really wants
Being more rigorous than just using your gut
1. Describe the problem
What problem have you identified and what part of it are you going to research?
Look for answers that will be useful in solving the problem, not just interesting to know
(think about specifics for Labs, survey etc)
Make an Hypothesis• Start with a statement about the problem that frames a particular solution in a positive way. Eg. “ Small companies wanting to use lab services are more likely to want to access their services after hours and weekends because of time constraints during normal business hours.” Now develop a research project tp prove or disprove that hypothesis.
• Check indirect sources of information – eg customer data base info
Choose a Research Technique• Indirect Sources of Information (Stalking in the wild):• Check internal sources – eg sales, purchase requests, monthly report information, promotional plans etc.• External information sources:– Government census info (ABS)– Industry and trade journals– The media– Financial institutions
• Problem with only indirect sources – most of it is out of date by the time you get hold of it.
Choose a Research Technique
• Direct Sources (Grow your own):• Go direct to the target population (ie your
current and intended customers –prospects)
• Qualitative vs Quantitative:
Choose a Research Technique• Quantitative: measurable data gathered for statistical
analysis. Usually surveys/questionairres/structured interviews with response codes etc.
• Qualitative: anecdotal, open ended, usually derived from direct quotes from customers etc, has high personal relevance and validity from the customers perspective. Often high “feeling” component to the information. Types include surveys, depth interviews (may be face to face, phone) , group interviews or focus groups (useful for seeking confirming and disconfirming information in situ from a number of prospective clients or customers.
Select the Sample
• Is it possible to select the entire target population? If yes do so! If No, you must select a sample for the research.
Types of Sample:• Random Sample• Representative Sample• Skewed Sample
Sampling (Cont.)• Random assumes that every sample
equates to every other – usually false to assume this with target populations.
• Representative: develop a process to select a number (the more the better, but this is a choice and time is a factor) of participants who represent the diversity in the target population. Eg if I’ve identified that in the target group there are 80 people and they represent 5 different departments,I might :
Sampling (cont.)
• Work out the risk associated with leaving which people out
• Because I know that one group has 40 people in it – I want to get more from that group
• I need to include the financial manager – he makes buying decisions
• I need to include the Accounts Manager – he’s a supporter of our services and an advocate to the CEO,etc
Sampling (Cont.)
• Etc : to come up with a sample of 30 people in which I’ll:
• Do two focus groups of 10 people each (mixed levels in each focus group)
• Do ten individual interviews• On the basis of the information from the
focus groups send a brief survey to all 80 people as a follow up
Collect & Analyse Data• Determine the questions you’ll ask in the focus
groups and interviews• Design your interview questions – look at sequence
and wording and the way people can respond (ie scales etc if using quantitative questions)
• Conduct the research techniques (If doing direct data gathering you’ll need to contract about entry into the clients system – ie permission to conduct the research, confidentiality issues , purpose of the information, who’ll have access and its use need to be discussed with the client/s)
Collect & Analyse Data (cont.)
• Collect the data• Converting data into information into understanding
• ( This means tabulating, and grouping the information into meaningful categories which then enables you to ask why this is the case !!)
• Establishing categories can be done through association, natural themes, predetermined criteria,or if using inferential statistics through correlation measures
Making Recommendations
• From the information and new understanding you have about the problem, decide how this affects your working with your market (exisiting and potential customers)
• What new/different/changed offerings can you make?
• How can you test this with the customer?
Service Management Within
Building a customer culture• Don’t try – do, but how?• Conduct internal service audits re all employee to employee
and departmental interactionsAsk:
• Who are my customers?• Who relies on me to get their job done? –
Interdependencies?• How do I respond to their needs?• What service does my dept provide to other depts?• What contribution does my dept make
to improve the quality of service to paying customers?
What the Customer Sees
Stategy
Customer
PeopleSystems
Service ManagementHow to turn people on to their customer?
• Make sure you’re selling what the customer wants to buy• Visible Management• Take it to the front
Management support the frontDevolve decision making to the frontMoments of truth
What service management is not• Motivation• Smile training• Advertising campaign
Customers as the base for what you do
• Customers define the links• What are they trying to buy (motivation) /refer back to
customer priorities• What are they willing to pay for ?• Strategy for differentiation – perceived as valuable by
them• People need clearly defined strategy (Look at
tangibility and services, eg when buying management consulting services – internal referral highest, capability statement less)
• Leaders need to keep the service message alive
Customers See
• Systems need to be user friendly• Designed to help people who serve
the customer• Designed for customer convenience• Design = unique strategy for service
(luxury, economy, speed etc)• Inventory of moments of truth
The Service Cycle• “A series of interconnected events that starts
with the first point of contact with the organisation and ends when the customer considers is complete and decides to come back for more”
Each moment is a test• Manage moments indirectly• Service only a competitive weapon when it is
outstanding (delight factors)• If you’re not serving a customer directly, you’re
serving someone who is.
Measuring Service Quality• Approach each cycle of service with the needs of the customer
in mind – ie regardless of who the customer is.The report Card• What is good service to you?• What aspects of service are important to you (delight, basics)• What do the other depts you serve think customer service is?• Relate to performance appraisal• Quantitative and qualitative measures• Encourage ownership of the service factor (Do Well, Do Better)
• “…shared values, beliefs and policies need to speak to a
customer orientation…”
Marketing & Price Setting• Understanding Cost Structure• Fixed, Semi Variable, variable• Contribution Margin• Break - even analysis• Understanding Value: The marketer can reduce customer cost in:
- time in service purchase
- mental effort in getting service
- pruning customer effort
- minimising unpleasant sensory experience
Marketing & Price setting
Profit Oriented
Sales Oriented
Status Quo
Target Return
Non-priceCompetition
Maximise profits
Dollar or UnitSales Growth
Growth inMarket Share
MeetingCompetition
Pricing Objective
Marketing & Price SettingPricing
Objectives
Price of Other Products in line
Costs
Demand Price Flexibility
Competition
Discounts and Allowances
Legal Environment
Geographic Pricing Terms
Mark-up Chainin Channels
PriceSetting
Formulating Price Strategy
Some Pricing Issues• How much to Charge ?• What’s the basis for Pricing ?• Who should collect payment ?• Where should payment be made ?• When should payment be made ?• How should payment be made ?• How should prices be communicated to the target
market ?
Marketing & Revenue
Asset Use & Yield management
Capacity measures - eg billable hours, productivity measures not enough by themselves
Asset Revenue -generating Efficiency
• capacity X yield percentage = ARGE
Marketing Role - summary• Identify the principle market segments matched to
service facility’s capability & mission• Forecasting volumes of business / per segment /at price• Recommending ideal business mix (re maximising net
revenues at a point in time)• Providing sales force with specific sales targets /dates
/per segment• Providing price guidelines• Monitoring performance over time
- ARGE
Consultative selling
Customers recognise insincerity !Needs for Consultative selling• Genuine concern for the customer• Desire to solve their problems with
them• Expert advice• Partnership• Listening skills
Talk Less, sell more
Myth – good talking =good selling• Selling is a balance between asking
and telling (inquiry and advocacy)Questioning• Uncovers needs• Keep control• Make you listen• Shows you are interested
Purpose for QuestionsQualify prospects and existing customers• M = money• A = authority• N = need
What are their needs? Relate back to the 5 needs re customer satisfaction – listen for words which point to unmet need .When do they buy? Intentional, cyclical, future purchases.
Purpose for Questions
• How much do they intend to spend?• Find out this information partly in advance –
Known budgets, allocations, RIP works, other customers they are working with.
How to ask questions• Problem with determining the decision
maker• First question• “Can I ask some questions?”
Purpose for QuestionsDetermining/confirming needs• “What are you using at present?”• “What else have you seen/considered?”• “What have you liked about what you’ve
seen?” – the problem =the need• “What don’t you like about you’re current
situation?”Determining buying time frame• Make an assumption on what you know• “Who else is involved in the decision?”
Purpose for QuestionsDetermining budget• What does the industry/market suggest?How to work your costing.• Being able to show comparisions with ‘cheaper
prices/quotes’• Relate your cost structure to the job• Show you’re understanding of how cheaper
competitors offer their prices• Relate the costing to your understanding of value
customer is after
Creating Interest,needs > buy
• What makes customer buy?• Perceived benefits must outweigh costs• Roles of the customer when approaching
the buying decision• Major vs minor needs• Major = problem• Soln – match major needs with specific benefits
(product descriptors include features, advantages, benefits)
• Benefits = opportunity for joint problem solving
Handling ObjectionsMore objections = less likely to sell (only partly
true) - objections also indicate interest !• Objections = arguments you may need to
disagree with customer, but how?• Making the objection less harsh or less
important – soften the blow• Feel, felt, found• Advantage statements can increase objections• Frame benefits as joint solutions
Customer Roles
Customers during transactions and negotiations display many roles. Some of the major roles include:
• The Initiator• The Influencer• The Decider• The Buyer• The Consumer• The Evaluator
CompletionOld approach – must close at least 5 times• The sale is not the end but a continuation of a relationship,
therefore the way in which the sale is made will determine future repeat work
• Comments on pressure -Higher cost of goods/service re close• Defining closing“agree on what needs to happen next” (several stages)• joint commitment to follow up to the next stage (increment)• summary close
“ Have I answered all your questions?“ Summarised benefits”“ Proposed and accepted moving to the next stage.
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