MARKETING REDEFINED ……………… .
CONTENTS WHERE   are we today? WHY   – need for change The  TRANSITION The New Transition   METRICS Shifting  PARADIGM REI...
WHERE  are we today? <ul><li>A Product driven culture </li></ul><ul><li>Depend on one – way mass marketing to push a produ...
<ul><li>To make our brands subservient to long term customer relationship. </li></ul><ul><li>To drive decisions based on c...
The  TRANSITION Product Driven Customer Driven
The New   METRICS CURRENT  SALES BRAND EQUITY MARKET  SHARE CUSTOMER LIFETIME VALUE CUSTOMER EQUITY CUSTOMER  EQUITY SHARE...
<ul><li>Shift from Measuring Profitability in terms of Gross Profit, Contribution Margin or Throughput to revenues and cos...
CURRENT  SALES CUSTOMER  LIFETIME VALUE <ul><li>CLV  is the present value of future cash flows attributed to customer rela...
<ul><li>Shift from measuring value of the brand to sum of lifetime values of all of a company’s customers. </li></ul><ul><...
MARKET  SHARE CUSTOMER  EQUITY SHARE <ul><li>Customer Equity Share is the value of the company’s customer base vis-à-vis t...
<ul><li>Cultivating Customers: </li></ul><ul><ul><li>Creating  an Organization culture designed to serve customers & custo...
<ul><li>Customer Facing Functions: </li></ul><ul><ul><li>CRM: Create an interface to gauge customer needs & behaviors to e...
<ul><ul><li>Shift in organizational structure from marketing driven to customer driven. </li></ul></ul><ul><ul><li>Approac...
REINVENTION <ul><li>Build a Customer Centric Organization. </li></ul><ul><li>Cultural transition  - from selling a product...
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Rethinking marketing

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Transcript of "Rethinking marketing"

  1. 1. MARKETING REDEFINED ……………… .
  2. 2. CONTENTS WHERE are we today? WHY – need for change The TRANSITION The New Transition METRICS Shifting PARADIGM REINVENTION
  3. 3. WHERE are we today? <ul><li>A Product driven culture </li></ul><ul><li>Depend on one – way mass marketing to push a product to many customers. </li></ul><ul><li>Maintain a transactional relationship, thus expecting the customers to accept what we have to offer. </li></ul><ul><li>Driving Transactions </li></ul>
  4. 4. <ul><li>To make our brands subservient to long term customer relationship. </li></ul><ul><li>To drive decisions based on customer information. </li></ul><ul><li>Focus on long term health of the organization. </li></ul><ul><li>To attain sustainable competitive advantage. </li></ul>NEED for change
  5. 5. The TRANSITION Product Driven Customer Driven
  6. 6. The New METRICS CURRENT SALES BRAND EQUITY MARKET SHARE CUSTOMER LIFETIME VALUE CUSTOMER EQUITY CUSTOMER EQUITY SHARE PRODUCT PROFITABILITY CUSTOMER PROFITABILITY
  7. 7. <ul><li>Shift from Measuring Profitability in terms of Gross Profit, Contribution Margin or Throughput to revenues and costs associated with the customer relationship in a specified period. </li></ul><ul><li>A Shift from Marketing Products to cultivating customers. </li></ul><ul><li>Approach the market through a structured Customer Relationship Program. </li></ul><ul><li>Rewarding for brand transition to build Customer value rather than product/ brand based performance. </li></ul>PRODUCT PROFITABILITY CUSTOMER PROFITABILITY
  8. 8. CURRENT SALES CUSTOMER LIFETIME VALUE <ul><li>CLV is the present value of future cash flows attributed to customer relationship </li></ul><ul><li>A company with strong current sales but poor prospect base will decline gradually. </li></ul><ul><li>Evaluate long term health of the organization based on lifetime value of the customer rather than profits generated in short run. </li></ul><ul><li>Use of future oriented customer metrics, like customer retention rate, customer value, or brand assets. </li></ul><ul><li>Rewarding and reflecting customer metrics in financial statements. </li></ul>
  9. 9. <ul><li>Shift from measuring value of the brand to sum of lifetime values of all of a company’s customers. </li></ul><ul><li>Brand equity is more like facilitator to the customer equity. </li></ul><ul><li>Synergy between brand and customer equity makes marketing more relevant to shareholder value. </li></ul><ul><li>Marketing activities to be tracked more closely using niche media for specific customer segment. </li></ul>BRAND EQUITY CUSTOMER EQUITY
  10. 10. MARKET SHARE CUSTOMER EQUITY SHARE <ul><li>Customer Equity Share is the value of the company’s customer base vis-à-vis total value of customer in the market </li></ul><ul><li>Market share reflects company’s current competitive sales position. </li></ul><ul><li>CSE reflects long term competitiveness w.r.t. profitability. </li></ul><ul><li>Need to be adept at tracking customer information at several levels – Individual / Segment / Aggregate. </li></ul>
  11. 11. <ul><li>Cultivating Customers: </li></ul><ul><ul><li>Creating an Organization culture designed to serve customers & customer segments. </li></ul></ul><ul><ul><li>Build relationship with more individualized two-way communication. </li></ul></ul><ul><ul><li>Using technologies to interact, and mine information gathered to tailor offerings, rather than just analyzing only aggregate sales statistics. </li></ul></ul><ul><ul><li>E.g: AmEx capitalizes on customer lifetime value by tracking usage through Membership Rewards, Gold Card or Platinum card. </li></ul></ul>Shifting PARADIGM
  12. 12. <ul><li>Customer Facing Functions: </li></ul><ul><ul><li>CRM: Create an interface to gauge customer needs & behaviors to execute customer cultivation strategy. </li></ul></ul><ul><ul><li>Market Research: Shift the scope of research from aggregate to individual customer base, analyzing more customer upon customer metrics. </li></ul></ul><ul><ul><li>Make the MR info available to all, from marketing to finance & distribution. </li></ul></ul><ul><ul><li>R & D: Make product reflect real world needs. Creative collaboration with users in the design process, e.g: Nokia Beta Labs, a virtual developer community. </li></ul></ul><ul><ul><li>Customer Service : In-house function to ensure not only quality service but also long term relationship building. </li></ul></ul>Shifting PARADIGM
  13. 13. <ul><ul><li>Shift in organizational structure from marketing driven to customer driven. </li></ul></ul><ul><ul><li>Approach customers as behavioral scientists rather than marketing specialist. </li></ul></ul><ul><ul><li>Align deep customer knowledge with broad organizational or product knowledge. </li></ul></ul>Shifting PARADIGM Product Managers Customer Managers
  14. 14. REINVENTION <ul><li>Build a Customer Centric Organization. </li></ul><ul><li>Cultural transition - from selling a product to Building Relationship with customers across the organization. </li></ul><ul><li>Evolve and adapt new metrics of transition to encourage Customer Value and profitability. </li></ul><ul><li>A paradigm shift in focus as: Brand exist to serve customers, not the other way around. </li></ul><ul><li>Capturing more customer information at several levels and from all sources, to keep evolving in long run. </li></ul><ul><li>The shift is inevitable </li></ul><ul><li>This may be the only competitive way to serve the customer. </li></ul>

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