Rethinking Marketing


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  • Clubcard - to track which stores customers visit, what they buy, and how they pay. This information has helped Tesco tailor merchandise to local tastes and customize offerings at the individual level across a variety of store formats. (Shoppers who buy diapers for the first time at a Tesco store, for example, receive coupons by mail not only for baby wipes and toys but also for beer )American Exp - existing customers’ spending ability to a trusted circle of family members or partners while introducingthe brand to potential new customers
  • CMO: Companies as diverse as Chrysler, Hershey’s, Oracle, Samsung, Sears, United Airlines, Sun Microsystems, and Wachovia now have CCOsUSAA - top managers spend two or three hours a week on the call-center phones with customers.Tesco- managers spend one week a year working in stores and interacting with customers as part of the Tesco Week in Store (TWIST) program.
  • 1. Focus less on product profitability - Products that may be unprofitable but strengthen customer relationships.2. pay less attention to current sales and more to “customer lifetime value” (CLV)3. shift their focus from brand equity (the value of a brand) to customer equity (the sum of the lifetime values of their customers)4. Customer equity share - the value of a company’s customer base divided by the total value of the customers in the market
  • Rethinking Marketing

    1. 1. Rethinking MarketingCultivating RelationshipsAhead of Building BrandsPresented By : Bijoy E.V ( IBS-BDate: 2011 (Dec 18 – Dec 21)Ref: Roland T. Rust, - Christine Moorman, and Gaurav Bhalla
    2. 2. Idea in BriefMost of the companies are still depend on mass media marketing to drive impersonal transactions As an alternative Companies can interact with customers with the help of Powerful technologies like D/W for understanding and interacting with customers Which can help to radically reorganize in “Cultivating Relationships” ahead of building brands. .
    3. 3. Basic Changes in Views Shift from pushing individual products to building long-term customer relationships.• Marketing Department to “Customer Department” • Replaces the CMO to Customer Officer • Brand Managers to Customer managers• Shift the firm’s focus Product Profitability to Customer profitability
    4. 4. Different Approach
    5. 5. Idea in Action ( Cont..) Key distinctionsTraditional and a Designed to servecustomer- customers and customercultivating company V/S segments Communication is two-way andorganized to push individualized, or at least tightlyproducts and brands targeted at thinly sliced segment
    6. 6. Cultivating Customers• IBM – Energy efficiency or server consolidation, and coordinates its marketing efforts across products for a particular customer• IBM’s insurance practice - IBM’s Insurance Process Acceleration enables customer and industry specialists to build fast and flexible processes for Insurance• Tesco - Investments in analytics that have improved customer retention, data-collecting thru loyalty card.• American Exp - Spending ability to a trusted circle. Offering special Membership Rewards
    7. 7. New Roles & Responsibilities• CCO • reporting to the CEO • designing and executing the firm’s customer relationship strategy • promotes a customer centric culture and removes obstacles to the flow of customer information • Increasing the profitability of the firm’s customers, as measured by metrics such as customer lifetime value (CLV)• Customer managers • Ultimate expression of marketing - Identify customers’ product needs. • Brand Managers, under the customer managers’ direction, supply the products
    8. 8. Proposed Org: Structure
    9. 9. Change In Prospective
    10. 10. In house-Impact• Market research. • Touch customers—including finance (the source • Scope of analysis shifts from an aggregate view to an individual view of customer • Shifts its attention to acquiring the customer input that will drive improvements in customer-focused metrics• Research and development. • Customer must be brought into the design process, Eg: Nokia Beta labs, P&G.• Customer service • In-house to ensure long-term relationships. (Eg: Delta Airlines call centre locations)
    11. 11. Building CLV1. Companies need to focus less on product profitability and more on customer Profitability2. Pay less attention to current sales and more to CLV3. Shift their focus from brand equity (the value of a brand) to customer equity (the sum of the lifetime values of their customers).4. Pay less attention to current market share and more attention to customer equity share – more relevant to shareholder value.
    12. 12. Key Note Deriving this Competitive way to serve customers.Transformation must be driven from the top down. But however daunting, the shift is inevitable.