Presentation group1 knowledge based marketing

Knowledge-based
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Marketing
Marzieh Yaghini
Maede Parvizian
Arezou Ghiassaleh

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Contents
Marketing Concept
Segmentation & MR
Positioning
Promotion
Product development & Innovation
Pricing
Knowledge Plan

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Marketing Concept
Achievement of organizational goals is best fulfilled
through understanding the needs of customers and acting
to deliver satisfaction superior to that available from the
competition.
Relationship marketing
 building long-term customer loyalty.
 requiring in-depth knowledge of customers’ behavior in
the purchase process.

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promotion
Knowledge-based
Marketing
CRM &
Service
Product
Development
Market
Research
Segmentation Pricing
Customer
Behavior

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Segmentation & MR
 Possible benefits:
(a) by specialization, companies could stimulate greater
consumption and thereby market expansion
(b) if there are few competitors within a given segment,
promotional costs might be reduced
 today’s market researchers have access to powerful
low cost computer data bases and easy-to-use
software tools such as Statistical Programming Social
Sciences (SPSS).

Knowledge requirements
in mass marketing
the knowledge to
implement the
functional managerial
processes associated
with the procurement,
production and
distribution of standard
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goods
www.themegallery.com
knowledge of market
conditions (customer
needs, behavior of
competitors)
two sources of
knowledge

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One-to-one marketing
 By combining data processing capability with a wealth
of new data, large companies were placed in a position
to develop a very detailed understanding of the needs
and behavior patterns of individual customers.

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positioning
 Four possible generic competitive advantage options
available to organizations:
 Cost leadership
 Differentiation
 Focused cost leadership
 Focused differentiation

Honda Company
The Honda company in trying to sustain a global position
by:
 choosing the business strategy of ‘Small Is Smart’
 using a manufacturing model which could be adopted
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in all major factories
 defining a global standard layout for all main assembly
lines to maximize the benefits of knowledge sharing
 encouraging a ‘challenging spirit’ within the workforce

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Redeploying Knowledge:
k lo
Daido Metals :
 positioned to outperform competition in the areas of both
cost and quality.
 relying heavily on acquiring knowledge from interactions
with one customer that can then be redeployed across
projects for other customers.
Keyence:
 positioned as being the lowest cost provider of customized
products
 working with multiple customers, analyzing each customer’s
needs and then developing a family of product sensors to
solve the customer problem

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market positioning and
the nature of the knowledge
 Large firms tend to opt for reach because this
maximizes the number of customers who will receive
information that can influence purchase decisions
 specialist firms tend to focus on contacting fewer
customers but delivering to each potential purchaser a
much more extensive volume of information.
 E-commerce and appearance of new on-line
knowledge:
 offering information about competitors.

large firms can compete more effectively because of
using the knowledge in:
 Classifying customer into distinct groups based upon
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their purchase behavior
 Modeling relationships between possible variables
such as age, income, location to determine which of
these influence purchase decisions
 Clustering data into finite clusters that define specific
customer types
 Use this knowledge to tailor products and other
aspects of the marketing mix

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Network-Based Positioning
 sharing of knowledge and resources to achieve greater
scale in the execution of marketing processes is one of
the most common reasons for smaller firms to enter
into a partnership with other organizations.

Alternative Strategies for
Knowledge-Based Business Networking
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Sources of knowledge shaping
in services
 Explicit service
 Implicit service
 the customer’s previous exposure to the service
service providers need to monitor all of these contact
sources to understand their impact on existing and
potential customers.
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Service Gap Theory & SERVQUAL model
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The main objective: minimizing the gap between
customers’ desires and actual experience.

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CRM
 Effective customer relationship management is
critically dependent upon having accurate and up-to-date
knowledge about customers.
 The first step in gaining a deeper knowledge of
customer behavior is the construction of a customer
database.

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Data mining
 selecting, exploring and modeling large amounts of
data to attempt to identify new patterns, correlations or
irregularities in the data sets using a range of statistical
analysis tools.
Techniques which are applied include:
 cluster analysis (to identify groups of similar behaviors)
 conjoint analysis (to identify preferences)
 regression analysis (to explore patterns between
variables)

Data mining (Cont)
knowledge mining: abstraction and validation of data
from a diversity of company information sources
 Technics: clustering, classification, value prediction,
association discovery, sequential pattern discovery and
time sequence discovery
 data warehousing :storage of knowledge to support
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knowledge mining activities

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using knowledge to enhance
marketing activities
 customer communications
 access and customize information to fulfill the
knowledge needs of individual customers
 analyzing customer buying patterns and then send a
personalized promotional message

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Customer Targeting
 The advent of data warehousing and data mining is
now permitting firms to understand the behaviors of
individual customers. This permits the firm to analyze
the past and future profitability of individual customers
which in turn permits the marketer to implement highly
targeted, customized marketing campaigns.

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Relationship Programs
 organizations have built systems whereby the
employee handling the contact has immediate access
to customer information which places them in a
position to respond immediately to the customer’s
needs.
 proactive services: the database is used to identify a
potential need which a customer may have. Contact is
made to determine whether the customer is interested
in the additional service proposition.

 Promotion is the marketing process for providing
customers with the knowledge that can influence their
purchase behavior.
 Internal promotion: distributing information that permits
employees to have a deeper understanding of tasks
and job
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promotion

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promotional mix strategy
 Advertising
 Collateral promotion
 Direct marketing
 Personal selling
 Public relations and publicity
 Sales promotions

Feasible Alternatives for promotional activities
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 To deliver knowledge to completely new target
customer groups.
 To find an alternative approach to the delivery of
knowledge.
 To identify a new method of using knowledge to guide
the purchase process.
 To find an unconventional way of managing the flow of
knowledge provision within the market system.

The Internet and the communication mix
 Customers will be able to use the internet to acquire
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comparative information.
 enhance the volume of knowledge provision by
incorporating high-grade graphics with audio and
interactive capabilities.
 upgrading web site technology

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Online Communities
 on-line communities constituted of customers
 chat rooms
 Create brand sites
(building stronger brand– consumer relationships)

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Internal Electronic Promotion
internal knowledge sharing offers the following benefits:
 Improving the quality of technical and non-technical
resolution of customer problems.
 Ensuring greater consistency in the quality of services
delivered.
 Increasing the frequency with which frontline staff can
resolve customer problems during the first time that the
customer makes contact.
 Reducing the costs associated with resolving customer
problems.


Product development
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and Innovation

A Knowledge Enhancement Option Matrix
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Product Knowledge Management Matrix
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A Traditional Linear New Product
Process Management Mode
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Influence of Knowledge Competence on
the New Product Process
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Accelerating the Innovation
Management Process
 Using modern computer for accelerating time-to-market
 Using computer aided design (CAD) for acquiring
knowledge for evaluation of prototypes
 Using computer-aided manufacturing (CAM) systems
to provide knowledge for assessing the feasibility of
manufacturing a new product idea

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Critical factors in innovation
management
 Involving the entire workforce in organizational
learning to ensure new ideas, knowledge and skills are
spread throughout the operation
 seeking new knowledge about technological innovation
to incorporate latest scientific thinking into the
organization’s core knowledge base

Knowledge Management and R&D
 associated with innovation, the most important area to
optimize knowledge management is R&D operations
 the key aspect of knowledge management within the
R & D process are: creation, capture, retrieval and reuse
 The first phase in the research process is to initiate
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discussion and review of available knowledge

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Pricing
 Pricing decisions can dramatically impact sales
revenue
 marketers need in-depth knowledge about customer
perceptions of prevailing prices and the influence of
price changes
 To avoid on-line price competition firms must use the
for distributing additional knowledge to enhance
customer perceptions about product performance and
quality

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pricing strategies
 premium pricing
 penetration pricing
 trusted supplier value pricing
 skimming
 Average pricing
 Sale pricing
 limited loyalty pricing
 Economy pricing

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Price-Value Option Matrix

The Influence of Knowledge on Pricing
The degree to which sellers and buyers have acquired
knowledge will have a major impact on the nature of the
pricing systems which are used in a market.
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 Buyer–seller matrix

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Advent of the Internet
 access knowledge rapidly on prices and features of
thousands of products
(www.pricescan.com and www.bottomdollar.com)
 read about the purchasing experience of others can
acquire knowledge that was once accessible only to travel
agents
(www.travelocity.com and www.epinions.com )

Advent of the Internet (Cont)
the internet is so supportive of enhancing customer
knowledge because of:
 permitting rapid access to a diverse range of
information sources and thus reducing purchase risk
 enhancing the efficiency of the purchaser’s knowledge
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search

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Constructing
Knowledge Plans

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marketing planning
 the most important goal in the marketing planning
process is not the generation of a formal document
 planning is an opportunity to use organizational
learning as the basis for reviewing recent events and
determining a future direction

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marketing planning (Cont)
the firm should seek to learn more about
 the knowledge issues currently confronting the
organization
 the direction in which the organization wishes to go in
relation to the future exploitation of knowledge
 the selection of the most appropriate actions
associated with how to achieve specified future
knowledge management performance goals

The Knowledge Planning Process (Cont)
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The Resource-Based View of Knowledge
 “Competition for the future is competition to create and
dominate emerging opportunities to stake out new
competitive space”
 exploiting new and existing knowledge to understand
the probable nature of future market conditions and to
ensure the organization has acquired competencies
appropriate for achieving ongoing success
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Building a Knowledge Management
Resource Planning Matrix
Standard factors influence the degree to which customers
value knowledge:
 Level of actual knowledge associated with the product
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or service being delivered to the customer.
 Range of benefits offered by knowledge content
contained within the product or service
 Price

Resource Planning Matrix (Cont)
 Role of knowledge content in fulfilling service quality
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expectations
 Effectiveness with which knowledge is made available
to the customer
 Relative knowledge provision capabilities of
competitors

Resource Planning Matrix
Standard factors influencing knowledge management
capabilities:
 Cost of knowledge provision
 Cost of knowledge acquisition and storage.
 Impact of knowledge on employee productivity.
 Cost of internal and external distribution of knowledge.
 Cost of fixed assets required to support a knowledge
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management system.

Knowledge Management Resource Planning Matrix
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Selecting Core Knowledge Competencies
opportunity for adding value comes from exploiting
knowledge across :
 five core processes of inbound logistics, process
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operations, outbound logistics, marketing and
customer service
 four support processes of management capability,
HRM practices, exploitation of technology and
procurement.
 concentrate even more attention on optimizing those
core knowledge management competencies
associated with maximizing added value activities.

A Knowledge Chain Model For Supporting Added
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Value Generation

Issue Coverage in a
Knowledge Management Marketing Plan
1.Situation review
2.Strengths/weaknesses/opportunities/threats (SWOT)
analysis
3. Summary of key issues
4 Future objectives
5. Strategy to achieve objectives
6. Marketing mix for delivering strategy
7. Action plan
8. Financial forecasts
9. Control systems
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KM Implementation
Process

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KM Process Implementation
Recognition of
knowledge that can
contribute towards
improving current
marketing
operations
Using knowledge to
expand the
marketing operation
by entering new
markets or
acquiring new
customers
recognizing that
knowledge
management can
represent an
entirely new value
proposition for
customers

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The SABRE Story
 Initially developed as an in-house product for the
company’s own use
 the developers rapidly realized that the system could be
made more powerful by embedding data on competitors
into the system.
 SABRE was spun off as an independent company to
offer the technology to the rest of the airline industry.
 This new company which created as an electronic
platform is now valued at twice the value of the
originator, American Airlines.

Progressing the organization from using knowledge to
upgrade current operations to the point where knowledge
is the source of new value propositions is not a simple
process:
1. Instilling across the entire organization the importance
of knowledge exploitation for achieving goals and
strategies
2. Seeking out mechanisms that enhance access to tacit
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knowledge
3. Developing search and retrieval tools to acquire
internal and external information

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4. Promoting the importance of bringing creative
thinking into the problem resolution process.
5. Ensuring that new tacit and explicit learning is
captured in order that it can be reused.
6. Creating a culture which is supportive of the idea of
maximizing the degree to which employees seek and
share knowledge.

Presentation group1 knowledge based marketing

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