Transition of Marketing from Product Focus to Customer Focus. Evolution on customer relationship marketing

1. Transition of Marketing from
Product Focus
to
Customer Focus
Pranab Kishor
180554
MBA 2nd Year

2. Product Marketing
• Product marketing campaigns were designed to reach as many people
as possible.
• Treated all customers as if they had the same needs and wants.
• The product was being pitched, not only to its potential buyer.
• They thought - Availability and choice of products to consumers are
way to success.

3. The Process of Product Marketing
New Product
Launch
Marketing
Campaign
Did People
buy it?
Yes
Monitor
Revenues
Adjust Pricing
Re-Package/
Re-brand
Product
No
Launch
Revised
Campaign
Source: Dyche, 2006

4. A Journey Embarked
• Companies launched and re-launched their products.
• Analysed the responses to determine the success of marketing
campaigns.
• Companies began institutionalizing data analysis:
• Product revenue analysis
• Price-elasticity modelling
• Statisticians were suddenly in demand

5. The 1960s
• Introduced the phenomenon of “direct marketing.”
• Direct marketers monitored responses to their ads.
• Creating several versions of the same campaign and launching it in different
areas of the country
• Analysed relative response rates.
• Trimming away elements that didn't work.
• Refining other campaigns based on the learnings.
• It was apparent that messages could be tailored and consumers had
preferences.
• But It was still based on the principles of mass marketing.
• Focused on selling a mass-produced product.

6. Target Marketing
• Companies began to understand that their (usually inert) customer
data could be as valuable as the product data they were busy probing.
• Data analysts began associating products to the customers who were
buying them.
• Thus evolved the term “target marketing,”
• Promoting a product or service to a subset of customers and prospects.

7. Segmentation
• Technically, the size of a target market can range from the sum of all
customers to a single individual.
• Customers were being divided into categories based on their
demographics: age, gender, and other personal information.
• Demographic segmentation, while valuable, was not the only way a company
could categorize its customers (Yankelovich- 1964)
• E.g. Geography, Psychographics, Preferred sales channel, Profitability, Life stage, Privacy
preferences, propensity to buy, etc.
• Segmentation allowed companies to begin more specialized communications
about their products

8. Power to the Marketer (AT&T Case)
•

9. Refining Marketing Campaigns
Customer Interaction
Customer
Response
New
Campaign
Behaviour
Analysis
• The More a company
knows about its
customer the more
detailed it’s marketing
message can be.
• The concept became
Marketing Holy Grail.

10. Age of the Customer
• Relationship Marketing
• Regis McKenna, 1993.
• “Relationship Marketing: Successful Strategies for the Age of the Customer”
• Embraced as a way for
• Knowing customers more intimately by understanding their
preferences
• And thus increasing the odds of retaining them

11. Demise of The Mass Marketing
• 1993, Don Peppers and Martha Rogers:
“You will not be trying to sell a single product to as many
customers as possible. Instead, you'll be trying to sell a single
customer as many products as possible—over a long period of
time, and across different product lines. To do this, you will need
to concentrate on building unique relationships with individual
customers, on a 1:1 basis”
• Tactic of relying on economies of scale won’t work anymore.
• Relationship Marketing or One-to-One is way to go.

12. Permission Marketing
• An ingredient for successful Relationship marketing
• Customers should be able to choose how and when they wanted to
be communicated.

14. Permission Marketing
• A must ingredient for successful Relationship marketing
• Customers should be able to choose how and when they wanted to
be communicated.
• Godin, 1999
• “You can't build a one-to-one relationship with a customer unless the
customer explicitly agrees to the process.”

15. Technology
• 1980s – RDBMS and Data Warehouses
• Campaign Management Softwares –
• Xchange, Prime Response
• List Generation Software
• Variable Insertion

16. Marketing's Evolution
Mass Marketing
• Product Focused
• Anonymous
• Few Campaigns
• Wide Reach
• Little or no research
• Short-term
Market Segmentation
• Group Focused
• General Category Profiles
• More Campaigns
• Smaller Reach
• Based on segmented
analysis of demographics
• Short-term
Relationship Marketing
• Customer Focused
• Targeted to individuals
• Many campaigns
• Discrete Reach
• Based on detailed customer
behavior and profiles
• Long-term

17. References and Bibliography
• Dyche, J. (2002). The CRM handbook: A business guide to customer
relationship management. Addison-Wesley Professional..
• Yankelovich, D. (1964). New criteria for market segmentation. Harvard
Business Review, 42(2), 83-90.
• McKenna, R. (1993). Relationship marketing: Successful strategies for the
age of the customer. Basic Books.
• Peppers, Don and Martha Rogers, Ph.D., The One to One Future: Building
Relationships One Customer At a Time. New York: Doubleday, 1993.
• Godin, S. (1999). Permission marketing: Turning strangers into friends and
friends into customers. Simon and Schuster.

18. Thank You