Lecturer:  Vasiliy  Staros1n,  PhD,  State  University  of  management  (Moscow,  Russia)  

•  Crowded  market  

•  Increase  in  buying  power  

•  Emerging  industries  

•  Wide  range  of  brands  to  choose  from    

•  A  great  amount  of  info  about  products    

2  Vasiliy  Staros?n  

OLD  system  •  Mass  produc?on  •  Standardized  products  •  Long  PLC  •  Average  customer  •  one-­‐2-­‐many  

communica?ons  •  Long  NPD  cycle  

NEW  system  •  Product  personaliza?on  •  Personalized  products  •  Short  PLC  •  Individual  customer  •  one-­‐2-­‐one  

communica?ons  •  Long-­‐term  rela?onships  

3  Vasiliy  Staros?n  

Mass  offerings    =    

Averaged  product    for    

Averaged  customer    

“In  terms  of  rela1ons  between  company  and  customer,  the  absolute  majority  of  consumers  expect  companies  

treat  them  as  an  individual  not  as  a  segment  or  target”  (Brǿndmo,  2004)  

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One-­‐2-­‐one  marke?ng.  Preface  

•  Oversegmenta?on  (Kotler,  2005)  

•  Customer  variability*  

•  Syndrome  of  sophis?cated  customer  

*  See  Maslow  

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Customer-­‐centric  Customer  focus  Customer  in?macy  Customer-­‐driven  Personal  touch  Individualized  approach    

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The  challenge  for  the  companies  is  the  reten?on  of  customers  instead  of  geRng  new  clients.  

 CLV  concept  (customer  life?me  value)  

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9  Vasiliy  Staros?n  (c)  

One-­‐way  interrup5on  marke5ng  is  yesterday’s  message  

(Seth  Godin)  • You  are  watching  your  favorite  TV  show  • You  are  reading  an  interes1ng  ar1cle  • You  are  listening  to  the  radio  

1.   Marke5ng  simply  meant  adver5sing  2.   Adver5sing  needed  to  appeal  to  the  masses  3.   Adver5sing  relied  on  interrup5ng  people  to  get  

them  to  pay  aDen5on  to  message  4.   Adver5sing  was  one-­‐way:  company-­‐to-­‐

consumer  5.   Adver5sing  was  exclusively  about  selling  

products  6.   Adver5sing  and  PR  were  separate  disciplines  

run  by  different  people  with  separate  goals,  strategies  and  measurement  criteria  

10  Vasiliy  Staros?n  (c)  

1.   Marke5ng  is  more  than  just  adver5sing  2.   You  are  what  you  publish  3.   People  want  authen5city,  not  spin  4.   People  want  par5cipa5on,  not  propaganda  5.   PR  is  not  about  your  boss  seeing  your  

company  on  TV!  

11  Vasiliy  Staros?n  (c)  

“The  marketer  with  the  greatest  scope  of  informa?on  about  each  par?cular  customer  with  the  most  extensive  and  in?mate  rela?onship  will  be  the  more  efficient  compe?tor”  

(Peppers,  Rogers;  One2one  future)  

12  Vasiliy  Staros?n  

Why  will  you  purchase?   2008   2007  

Value   80%   81%  

Required   51%   56%  

Replacement   30%   30%  

Child  wanted  it   21%   26%  

Trendy/Fashionable   18%   22%  

Influenced  by  friends   4%   4%  

Source:  NPD  

13  Vasiliy  Staros?n  

Defining  the  audience  and  geRng  the  info  

Assessing  opportuni?es  and  competences  

 NPD  and  posi?oning  

Deal  and  delivery  

Support  and  post-­‐sale  service  

Evalua?on  and  further  improvement  

GeRng  the  info  

Compare  alterna?ves  

Assess  and  making  a  choice  

Order  and  purchase  

Acquiring  the  product  

Authoriza?on  and  payment  

Evalua?on  and  feedback  

SELLER

 

BUYER  

(adopted  from  Ke-nger,  Hachbarth,  1997)  

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1.  Shifing  from  mass  communica?on  towards  personalized  contacts  

2.  Customers  become  ini?ators  3.  Integrated  approach  4.  Ac?ve  customer  involvement  5. Massive  usage  of  IT  

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Decoding  problems  Feel  the  difference  

It’s  all  about  percep?ons  

One-­‐to-­‐one  marke?ng.    Analy?cal  steps  

Personaliza?on  involves  tailoring  any  or  all  aspects  of  the  marke?ng  strategy  for  each  consumer.    

These  strategic  decisions  could  involve  promo?onal  ac?vi?es  including  adver?sing  (Nuzum,  2002),  distribu?on  (Lardner,  1999),  pricing  (Cortese,  1998;  Stellin,  2000)  as  well  as  the  product  (Rich,  2001).  

 21  Vasiliy  Staros?n  

Barriers  for  product  personaliza5on  

1.  Absence  of  corporate  resources  and  competences  

2.  Level  of  customers’  professionalism  

3.  Cost  control  and  efficiency  

4.  Compe??ve  rivalry  

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Challenges    

Degree  of  customiza?on  

Customer  involvement  procedure  

Vasiliy  Staros?n  (c)  

Macro-­‐level  

Meso-­‐level  

Micro-­‐level  

Product-­‐level  

• Economic  environment  • Socio-­‐cultural  issues  • Technology    development  

• Compe??ve  environment  • Customer  professionalism  • Demand  condi?ons  • Support  industries  

• Resources  and  competences  • Research  and  development    • Product  porkolio  • Corporate  coordina?on  

• Customer  involvement  • Product  modularity  • Product  life  cycle  

23  Vasiliy  Staros?n  (c)  

Vasiliy  Staros?n  (c)   24  

Developing  personalized  marke?ng  programs  is  not  limited  only  by  product  customiza?on.  It  implies  adop?ng  all  the  elements  of  marke?ng  mix  to  a  par?cular  customer.  

Product  

Price  

Promo?on  

Place  

Physical  assets  

Personnel  

Process  

Packaging   Choose  the  most  relevant    elements  for  adapta?on  

25  Vasiliy  Staros?n  (c)  

Product  personaliza?on  methods  

27  Vasiliy  Staros?n  (c)  

One-­‐to-­‐one  marke?ng  advocates  tailoring  of  one  or  more  aspects  of  the  firm’s  marke?ng  mix  to  the  individual  customer      

(Peppers  and  Rogers  1997;  Peppers  et  al.  1999;  Shaffer  and  Zhang  2002).  

The  tailoring  of  a  firm’s  marke?ng  mix  to  the  individual  customer  is  the  essence  of  one-­‐to-­‐one  marke?ng.    

28  Vasiliy  Staros?n  (c)  

•  Allows  firms  to  increase  demand  by  contac?ng  customers  that  were  not  served  by  serial  standard  products  

•  “Allows  firms  to  obtain  the  surplus  from  the  inframarginal  customers,  that  are  willing  to  pay  more  for  products  which  match  their  needs”  (Syam  and  Kumar,  2006)  

•  Creates  brand  iden?ty  in  terms  of  product  specializa?on  and  generates  brand’s  added-­‐values  

•  Full  range  of  customers’  benefits  it  terms  of  sa?sfying  their  needs  and  matching  their  expecta?ons  

 29  Vasiliy  Staros?n  (c)  

is  a  corporate  philosophy  which  treats  customers  as  individuals  rather  than  representa?ves  of  target  audiences.  

 

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Features    

Product  adapta?on   Personal  fit   Customer  

involvement  

Vasiliy  Staros?n  (c)  

Personalized  product  proposi?ons  

Day-­‐to-­‐day    products  

Standard  products  with  individual  

services  

Products    assembled  to  order  

Products    developed  to  order  

31  Vasiliy  Staros?n  (c)  

Methods    

Customize  product  

 

Personalize  services  around  the  product  

 

Customiza?on  implies  physical  transforma?on  of  a  product  while  services  could  be  personalized  by  adap?ng  to  par?cular  customer  

32  Vasiliy  Staros?n  (c)  

HARD  -­‐components  

SOFT  -­‐  components  

Dimensions,  materials,  func?onality,    design,  iden?ty  etc.  

   Consultancy,  assistance,  financing,  warranty,  delivery,  afer-­‐sales  service  etc.  

   

33  Vasiliy  Staros?n  (c)  

Vasiliy  Staros?n  (c)   34  

HA

RD

–  

 Size and shape   Key dimensions  

Materials  

Functionality   Basic and optional components  

Programm components  

Authentic and style   Design, interior and exterior  

Identity and uniqness  Personal attributes  Packaging  Documentary  

SOFT

–  

  Purchase conditions  

Consultancy  Accessibility; availability  

Organization and purchase servicing  Payment and proceeding  Delivery  

Post-purchase service  

Marke?ng  

Produc?on  

IT  

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36  Vasiliy  Staros?n  (c)  

Expert  

Module  

Mixed  

Cosme?c  

Producer  specifies  the  extent    and  components.  Taking  the  responsibility.  Role  of  Market  research.  Number  of  

models    

Most  popular  way.  Depends  on  product  modularity.  

Limited  number  of    module‘  variants.  Combining.  

Most  popular  way.  Depends  on  product  modularity.  

Limited  number  of    module‘  variants.  Combining.  

Requires  minor  product  changes.  Design,  packaging,  color  and  style  adapta?on.  

Creates  visible  effect.  

37  Vasiliy  Staros?n  (c)  

Product  set  is  a  complex  proposi5on  which  stands  as  an  object  of  purchase.  Product  set  includes  physical  product  and  product’  surroundings  as:  services,  purchase  condi5ons,  nego5a5ons  and  any  other  intangible  components.  

Individual  services:  addi5onal  ac5vi5es  which  complement  the  purchase.  The  may  include  staff  assistance,  delivery,  final  adapta5on,  warrantee  etc.  Individual  services  depend  on  type  of  the  product  and  nature  of  the  market.    Addi5onal  op5ons:    set  of  op5ons  may  adapt  standard  product  to  the  individual  requirements  of  customers.  In  this  case  the  variety  of  op5ons  is  crucial  indicator.    Individual  purchase  condi5ons:    relate  to  procedures  of  the  purchase.  Sedng  the  appropriate  order  of  purchase  phases  for  making  the  process  adapted  to  par5cular  customer.  Instruments:  nego5a5on  process,  pricing  and  payment,  informing  the  customer  etc        

38  Vasiliy  Staros?n  (c)  

Standard  product  

Individual  services  

Individual  purchase  condi?ons  

Addi?onal  op?ons  

Standard  product  

Individual  services  

Addi?onal  op?ons  

Standard  product  

Individual  services  

Individual  purchase  condi?ons  

Standard  product  

Individual  services  Standard  product  

References  

Peppers,  J.  Rogers  J.Pine  M.  Lindstrom  De  Chernatony  M.  McDonald