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 communicatingsuperior 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

Product or Offering brands Product or Offering brands

Value and Satisfaction Value and Satisfaction

Needs, Wants, and DemandsNeeds, Wants, and Demands

Exchange and Transactions Exchange and Transactions

Relationships and Networks Relationships and Networks

Target Markets & Segmentation Target Markets & Segmentation

Marketing Channels Marketing Channels

Supply Chain Supply Chain

Competition Competition

Marketing Environment , Marketing Planning Marketing Environment , Marketing Planning

The Four PsThe Four Ps

MarketingMixMix

Product

Price Promotion

Place

The Four CsThe Four Cs

CustomerSolution

CustomerCost

Communication

Conven-ience

Production ConceptProduct ConceptSelling ConceptMarketing ConceptHolistic Concept

Company Orientations

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing 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 ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

Company Orientations Towards the Marketplace

Holistic ConceptHolistic Concept Considering society welfare

Company Orientations Towards the Marketplace

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.

Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

Evolving Views of Marketing’s Role

e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Finance

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-

ment

Customers Cus

tom

ers

Marketing Management Tasks

• Developing marketing strategies

• Capturing marketing insights

• Connecting with customers

• Building strong brands

• Shaping market offerings

• Delivering value• Communicating

value• Creating long-

term 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 it’s important to provide people with services, or something memorable, to take away from their experience

Goods and Services are no longer enough.

Staging experiences is important to engage clients.

Making that direct connection with the customer is important.

Beyond products and services

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/lbAn increase of value ?

productproduct

Experience Experience Service Service

commodity

The Moment of Truth

Creating Memorable Guest’s Experience will depend on How to Manage:

The Moment of Truth

Characteristics of Outstanding Service Organization

Four Characteristics of Outstanding Service Organization

Understanding the customer’s moment of truthA well-conceived strategy for service. It differentiate the company from competitors Customer-friendly systemCustomer-oriented front-line people

The Service Triangle

The serviceStrategy

The CUSTOMER

TheSYSTEM

ThePEOPLE

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

Moment of TruthMoment 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 Grönroos (1990)

The Critical Importance of Service EmployeesThey are the service.

They are the organization in the customer’s 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)

External Marketing“Making the promise”

Internal Marketing“Enabling the promise”

Interactive Marketing“Delivering the promise”

Source: Adapted from Bitner, 1995; Grönroos, 2000; Kotler and Keller, 2006.

ProvidersCustomers

Making Promises

Understanding customer needsManaging expectationsTraditional marketing communicationsSales and promotionAdvertisingInternet and web site communication

Keeping Promises

Service delivery– Reliability, responsiveness, empathy, assurance, tangibles,

recovery, flexibilityFace-to-face, telephone & online interactionsThe Customer ExperienceCustomer interactions with sub-contractors or

business partnersThe “moment of truth”

Enabling Promises

Hiring the right peopleTraining and developing people to deliver serviceEmployee empowermentSupport systems Appropriate technology and equipmentRewards 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

Basic

Expected

Desire

Unanticipated

Customer

A Customer is the most importantVisitor 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 usAn 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 customer’s needs and (whenever possible) exceed customer’s 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?