University of Brighton

A customer is the most important visitor on our Strategy & Customer

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
Led Business
business. He is part of it. We are not doing him a favour
by serving him. He is doing us a favour by giving us the Dr. Paurav Shukla
opportunity to do so.

M K Gandhi

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Objectives Simple Marketing System

ƒ The new economy
ƒ Strategic success: Macro and Micro factors Communication
ƒ The myth of value
ƒ Companies orientation
ƒ Preparing and Strategizing for a customer led business
Goods/services
Industry Market
(a collection (a collection
of sellers) Money of Buyers)

Information

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Structure of Flows Customer Development

Resources Resources
Money Resource Money Suspects
markets
Services, Taxes,
money
goods
Services, Taxes
money Prospects
First-time Repeat
Clients Advocates Partners
Manufacturer Government Consumer customers customers

markets markets markets

Taxes,
goods Services
Services, Taxes, Disqualified
money goods prospects Inactive or
ex-customers
Money Money
Intermediary
Goods, services markets Goods, services Peck. H. Payne. A. Christopher. M. Clark. M (1999) Relationship Marketing: Strategy and Implementation: Butterworth-Heinemann.
Oxford.

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University of Brighton

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The new economy The new economy

ƒ Substantial increase in buying power ƒ Companies can have 2-way communication with
ƒ A greater variety of goods and services customers and prospects
ƒ A greater amount of information about practically ƒ Companies can send ads, coupons, samples,
anything information to targeted customers.
ƒ A greater ease in interacting and placing and receiving ƒ Companies can customize offerings and services to
individual customers.
orders
ƒ The Internet can be used as a communication channel
ƒ An ability to compare notes on products and services for purchasing, training, and recruiting.
ƒ Websites can provide companies with powerful new ƒ Companies can improve logistics and operations for
information and sales channels. cost savings while improving accuracy and service
ƒ Companies can collect fuller and richer information quality.
about markets, customers, prospects and competitors.
ƒ Companies can facilitate and speed up communications
among employees.

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The traditional marketing approach Marketing Myopia

ƒ Managerial process ƒ What are business leaders myopic about?
ƒ Transactions Focus ƒ Market dynamics and stagnation of marketing
ƒ orientation to single sales
approaches
ƒ discontinuous customer contact
ƒ focus on product features ƒ Shortening of long-term competitive advantage
ƒ short time scale ƒ The myth of superior quality and technology
ƒ little emphasis on customer service
ƒ limited commitment to meeting customer expectations
ƒ quality is the concern of production staff
ƒ High consumer trust
ƒ Growing prosperity & Homogeneous demand
ƒ Dominant manufacturing power
ƒ Poor distribution structure

Payne, A. (Ed.) (1995), Advances in Relationship Marketing, Kogan Page, London.

Shukla, P. (2005), Pitfalls of Traditional Marketing, under publication Levitt, T. (1960) "Marketing Myopia", Harvard Business Review, July- August, 45-56.
Shukla, P. (2005), Pitfalls of Traditional Marketing, under publication

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Marketing Myopia
ƒ Four self-deceiving conditions leading companies to
believe they are in a “growth” industry:
ƒ An expanding and more affluent population
ƒ No competitive substitutes
ƒ Too much faith in mass production and declining unit costs
ƒ Preoccupation with the product

Levitt, T. (1960) "Marketing Myopia", Harvard Business Review, July- August, 45-56.

Dr. Paurav Shukla 2

University of Brighton

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Strategic success: macro factors Strategic success: micro factors

ƒ Environmental fit ƒ People
ƒ Timing and success ƒ Structure
ƒ Efficiency vs. Effectiveness ƒ Strategy
ƒ Speed and decisiveness ƒ Systems
ƒ Ambitious intent ƒ Leadership
ƒ Operational
ƒ Tactical
ƒ Strategic
ƒ Outstanding competencies

Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall.

Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall.

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The myth of value Determinants of Customer Delivered Value

Image value

Personnel value Total

customer
Services value value
Product value Customer
delivered
Monetary cost value

Time cost Total

customer
Energy cost cost
Psychic cost

Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall.

Kotler, P. (2003), Marketing Management, London: Prentice Hall Kotler, P. (2003), Marketing Management, London: Prentice Hall

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Customer Lifetime Value

Average transaction value

x
Yearly frequency of purchase
x
Customer life expectancy

Gupta, S., D. Lehmann, and J. Stuart (2004), "Valuing Customers," Journal of Marketing Research, 41 (February), 7-18.
Gupta, S., D. Lehmann, and J. Stuart (2004), "Valuing Customers," Journal of Marketing Research, 41 (February), 7-18.

Dr. Paurav Shukla 3

University of Brighton

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Customer Delivered Value Traditional Organization Chart

Starting
point Focus Means Ends
Top
Existing Selling and Profits through Management
Factory products promotion sales volume
Middle Management
(a) The selling concept
Front-line people
Customer Integrated Profits through
Market needs marketing customer
satisfaction Customers

(b) The marketing concept

Kotler, P. (2003), Marketing Management, New Jersey: Pearson Education.

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Customer-Oriented Organization Chart

Customers

Front-line people

Middle management
s
C

er
us

m
to

Top
to
m

us

manage-
er

C
s

ment

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Some really interesting papers

ƒ Anderson, E. W., C. Fornell, and S. K. Mazvancheryl (2004), "Customer satisfaction
and shareholder value," Journal of Marketing, 68 (4), 172-85.
ƒ Arnett, D. B., S. D. German, and S. D. Hunt (2003), "The identity salience model of
relationship marketing success: The case of nonprofit marketing," Journal of
Marketing, 67 (2), 89-105.
ƒ Gupta, S., D. Lehmann, and J. Stuart (2004), "Valuing Customers," Journal of
Marketing Research, 41 (February), 7-18.
ƒ Homburg, C., N. Koschate, and W. D. Hoyer (2005), "Do satisfied customers really
pay more? A study of the relationship between customer satisfaction and willingness
to pay," Journal of Marketing, 69 (2), 84-96.
ƒ Lambert-Pandraud, R., G. Laurent, and E. Lapersonne (2005), "Repeat purchasing
of new automobiles by older consumers: Empirical evidence and interpretations,"
Journal of Marketing, 69 (2), 97-113.
ƒ Neelamegham, R. and D. Jain (1999), "Consumer Choice Process for Experience
Goods: An Econometric Model and Analysis," Journal of Marketing Research, 36 (3),
373-86.
ƒ Spreng, R. A., S. B. MacKenzie, and R. W. Olshavsky (1996), "A reexamination of
the determinants of consumer satisfaction," Journal of Marketing, 60 (3), 15-32.
ƒ Thomas, J. S., R. C. Blattberg, and E. J. Fox (2004), "Recapturing lost customers,"
Journal of Marketing Research, 41 (1), 31-45.
ƒ Venkatesan, R. and V. Kumar (2004), "A customer lifetime value framework for
customer selection and resource allocation strategy," Journal of Marketing, 68 (4),
106-25.

Dr. Paurav Shukla 4