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  • 1. Answer from the pre-class reading only. Negative marks will be applicable for wrong answers. Answer in one or two sentences.  Presidency Business School, QUIZ no. 5  Name : Date:  Sem: 1(MKU) Marketing Management
  • 2. Two marks each  What is the challenge according to Jeffery Gitomer about customer ?  What is the term used for the ‘rate at which they lose customers’?  How many steps are there to reduce defection rate?  What is the key to customer retention?  Which is the company refered has blended its external and internal marketing programs?
  • 3. Answers  What is the challenge according to Jeffery Gitomer about customer ?  To produce loyal customer  What is the term used for the ‘rate at which they lose customers’?  Customer defection rate  How many steps are there to reduce defection rate?  Four  What is the key to customer retention?  Customer satisfaction  Which is the company refered has blended its external and internal marketing programs?  L.L. Beans
  • 4. Attracting and retaining customers It is no longer enough to satisfy customers. You must delight them  Todays customers are difficult to please.  The challenge is to produce loyal customer
  • 5.  Attracting customers  Customer acquisition requires substantial skills in lead generation, lead qualification and account conversion  Computing the cost of lost customer
  • 6.  The need for customer retention  The key to customer retention is customer satisfaction.  Relationship marketing: 1. Basic marketing 2. Reactive marketing 3. Accountable marketing 4. Proactive marketing 5. Partnership marketing
  • 7.  Adding Financial Benefits Frequency marketing programs  Adding social benefits  Here company personnel work on increasing their social bonds with customers by individualising and personalising customer relationships.  Adding structural ties
  • 8. Customer profitability - the ultimate test  A profitable customer is a person household or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling and servicing that customer.
  • 9. Marketing Plan  What is a marketing plan ?  - It is the act of putting together in a plan, the various  elements of the marketing mix in a forecasted / futuristic  approach  - How ,who and when of the entire marketing activity is  written in the plan  Elements in a plan  - Mission statement – company’s end aim of business  - Situation Analysis – Where are we  - SWOT – Why we are here  - Objectives of the plan – where do we want to be  - Strategy, programme – How do we reach there  - Budgets, forecast, P&L – At what cost
  • 10. 1. Mission Statement - Mission statement – company’s end aim of business - Mission statements reflect a vision - Mission statement should have three characteristics Focus on limited no. of goals Stress the major policies and values Define competitive sphere within which the company will operate
  • 11. 2. SWOT Analysis SWOT analysis is the strengths, weaknesses , opportunities and threats analysis. It involves monitoring external and internal environment factors Opportunity and Threat are external factors, external environmental issues, having a bearing on our business. A major purpose of environmental scanning is to find new opportunities. Companies can use a Market Opportunity Analysis (MOA) to determine the attractiveness and probability of success:
  • 12. 1. Can the benefits involved in the opportunity be articulated convincingly to a defined target market? 2. Can the target markets be located and reached with cost effective media and trade channels? 3. Does the company possess or have access to the critical capabilities and resources needed to deliver 4. Can the company deliver the benefits better than any actual or potential competitor? 5. Will the financial rate of return meet or exceed the company’s required threshold for investment?
  • 13. An environmental threat is a challenge posed by an unfavourable trend or development that would lead in the absence of defensive marketing action, to lower sales or profit. Threats should be classified according to seriousness and probability of occurrence.
  • 14. Just like opportunities and threats are analysed, strengths and weaknesses should be evaluated. Clearly a business does not have to correct all its weaknesses, nor should it feel too happy over its strengths.
  • 15. 3. Goal Formulation / Objective setting After the SWOT, goals have to be set for the specified plan period. While setting goals, care should be taken to do the following: 1. They must be arranged hierarchically, from the most important to the least important. 2. Objectives should be stated quantitatively as far as possible. 3. Goals should be realistic 4. Objectives must be consistent.
  • 16. 4. Strategy Formulation / Programme Implementation Goals indicate what the business wants to achieve, strategy lays down a long term approach path to reach there. Michael Porter , laid out three generic strategies that provide a starting point in building a strategy plan. 1. Overall cost leadership 2. Differentiation 3. Focus Overall cost leadership means that in the industry , the firm will achieve the best value engineering and thereby reduce cost of production.
  • 17. Differentiation means achieving performance in an important customer benefit area valued by a large part of the market. The firm should be able to offer a superior differentiation compared to competition. Focus means that the business will focus on a narrow segment. They will achieve cost leadership or differentiation within the target segment. Yet another area of strategy formulation is the idea of strategic alliance with another partner. Strategic alliances can take the form of marketing alliances. These fall into four categories : 1. Product or service alliances one company licenses to another to produce its products or two companies jointly market their complementary products or a new product. E.g., Hindustan Lever joined with Pepsico to bottle Lipton Iced tea.
  • 18. 2. Promotional alliance is when one company agrees to carry a promotion for another company’s product or service. 3. Logistics alliance is when one company offers logistical services for another company’s product. 4. Pricing collaborations is when one or more companies join in a special pricing collaboration, such as airlines, hotels, car rental companies to offer attractive rates. Programme implementation is the key to any strategy formulation. This is the stage when a holistic approach should be adopted and all external and internal customers should be kept in the picture and made to realize the importance of good implementation.
  • 19. 5. Budgets / Forecasts /P&L Any plan has to be followed with a detailed budgeting exercise , putting down costs, money required for the project and the expected returns and variances expected. This should be done for the plan period and also for the next two or three years. Feedback and control becomes very important to do course correction and also redraft the plan if necessary.