Session 1 - Creating Customer Value and Engagement

Discussion Questions No. 1

Discussion Questions To Answer:

1. Define marketing and outline the steps in the marketing process.

2. What is marketing myopia? What are the short- and long-term implications for business in this
situation?

3. Describe the five different competing marketing orientations that a business organization can
adopt to drive its marketing strategy.

4. Discuss the concept of customer relationship management. Why is it essential that a business
incorporates this in its operations?

5. Why is marketing as important for not-for-profit organizations as profit-driven ones?

ANSWERS:

1. Define marketing and outline the steps in the marketing process.

 Marketing is the study and management of exchange relationships. Marketing is the

business process of creating relationships with and satisfying customers. With its focus
on the customer, marketing is one of the premier components of business
management.

Marketing refers to activities undertaken by a company to promote the buying or selling

of a product or service. Marketing includes the advertising, selling and delivering of
products to consumers or other businesses.

Professionals who work in a corporation's marketing and promotion departments seek

to get the attention of key potential audiences through advertising. Promotions are
targeted to certain audiences and may involve celebrity endorsements, catchy phrases
or slogans, memorable packaging or graphic designs and overall media exposure.

 Marketing Process Steps:

a. Analysis of the opportunities in the market.

The first component of the Marketing Process is to analyze the market in order
to find the opportunities that should be availed. These opportunities are related
to the needs and wants of the customers that are not properly satisfied by the
competitors in the market. A company that is initiating the marketing process
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focuses the opportunities that would be beneficial in the long run success so
that its performance would be effectively improved. For this purpose, the
company gets help from the marketing information system (MIS), which plays a
significant role in providing useful information about the market.

Marketing Environment – Micro and Macro Environment

The company also conducts effective market research that would tell him the
value able information about the customers, competitors, general trends, and
any extraordinary change occurred in the market that can be useful for the
company. Then company identifies the potential opportunities from the
collected information and split the whole market into different segment. These
segments are based on some factors like age group, geographical location etc.
The company evaluates each segment separately to check the potential of the
segment in the light of its strengths and weaknesses. Finally, it selects the target
market segment to proceed further.

b. Selection of the target market.

This is the most important step of the marketing process in which the target
customers are selected. For this purpose, the company conducts a careful
analysis of the target markets in order to choose the final customers. As it is
obvious that the company do not satisfy the needs and wants of the whole
market therefore it must divide the whole market into different segments and
choose the segment that will best meet its strengths and opportunities. In this
regards, there are certain step you need to follow.

Market Segmentation:
The process in which the whole market is split into different units of consumers,
each unit having similar wants, characteristics and behavior of consumers which
need different marketing mixes and strategies.

Market Targeting:
In this process the targeted segments of the total market are evaluated to
ascertain the attractiveness of each segment so that the one or two most
suitable and potential segments should be selected and entered. The simple
rule of selecting the target unit or segment is that it must provide the
opportunity to the company to create potential customer value in the long run.
Another important rule is that a certain company has the option to satisfy the
needs and wants of one or two segments. In this case the company focuses on
that relevant segments and develops its products and strategies for them only.
Such small segments are called “niches”. The company has also another option
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to split the whole market into different segments and offers different products
and marketing mixes to each segment of the market. But the most effective
method is to focus on one or two segments and after succeeding in those
segments, further new segments should be targeted.

Market Positioning:
This concept relates to the positioning of the product of a company in the minds
of the customers as compared to the products of competitors. In other words
the company tries to maintain a clear and specific perception in customers
about its products. When a company wants to position its product, it first
specifies the competitive edge for which it offers competitive advantages to its
target customers. The whole marketing program of the company should
concentrate its identified positioning strategy. The positioning is effective when
the company truly provides the efficient, competitive offering to its customers
in order to give them maximum value as compared to the offering of
competitors.

c. Development of marketing mix.

After setting of a complete marketing strategy of a company, then it is ready to

initiate the planning of its marketing mix.

Marketing Mix
Marketing Mix is composed of certain variables of markets that are mixed by
the company in order to generate certain desired response in the targeted
segments.

In fact the demand of the product is influenced by the use of certain activities of
the marketing mix. The marketing mix is composed of the following four P’s.

01- Product: means any offering (goods or services) to the market by the
company.

02- Price: means the money paid by the customers to obtain the product.

03- Place: means the efforts which ensure the availability of the product in the
market to customers.

04- Promotion: means all the efforts by the company that ensure the sale of
products to customers through better provision of information about the
advantages of the product.
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A company develops an effective marketing program in which a suitable

combination of marketing mix is blended so that they are efficiently coordinated
into a useful program to provide the greater customer value in order to
accomplish the company’s objectives.

4P’s of marketing mix are from the seller perspective. In certain cases the 4C’s
are replaced by the 4P’s which are

Product means Customer Solution

Price means Customer Cost
Place means Convenience
Promotion means Communication

d. Management of marketing efforts.

This is actually the action phase of the development marketing program in

which a suitable marketing mix is set for a target market. For the management
of marketing efforts four functions are adopted which are as follow.

01- Analysis of the Market in which the company identifies the internal
strengths and weaknesses along with the external opportunities and threats.

02- Marketing Planning in which certain marketing plans or strategies are

developed so that the overall objective of the marketing should be
accomplished.

03- Marketing Implementation in which the developed plans and strategies are
practically implemented in order to achieve the marketing objectives.

04- Marketing Control in which the performance results of the marketing plans
and strategies are evaluated and necessary steps are taken to ensure the
accomplishment of overall marketing objectives of the company.

2. What is marketing myopia? What are the short- and long-term implications for business in this
situation?

 Market Myopia is short-sighted and inward looking approach to marketing that focuses
on the needs of the company instead of defining the company and its products in terms
of the customers' needs and wants. It results in the failure to see and adjust to the rapid
changes in their markets.
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Marketing myopia is when a business concerns itself more with its needs than the needs
of its target market – its customers. In essence, marketing myopia occurs when an
organization focuses too much on seeking sales and profits, while ignoring the needs
and wants of its customers.

The concept of marketing myopia was discussed in an article (titled "Marketing

Myopia," in July-August 1960 issue of the Harvard Business Review) by Harvard Business
School emeritus professor of marketing, Theodore C. Levitt (1925-2006), who suggests
that companies get trapped in this situation because they omit to ask the vital question,
"What business are we in?"

 Implications:
a. Unable to sustain growth
b. Lack of competition
c. No quality improvement
d. Lack of marketing

3. Describe the five different competing marketing orientations that a business organization can
adopt to drive its marketing strategy.

 Five Different Competing Marketing Orientations/ Philosophies

1. Production Concept
The Production Concept is just about producing, and does not spent much
effort on knowing something about the customer. It follows the idea that
consumers will favour products that are available and highly affordable.
Therefore, the aim of the organization is to improve production and distribution
efficiency. The Production Concept is one of the oldest orientations. It may work
in some cases, but entails the risk of focusing too much on the own operations
and losing sight of the real objective of marketing – satisfying customer needs
and building relationships.

2. Product Concept
The Product Concept focuses totally on the product: nicer, better, cheaper…,
but not on the customer and what he might need. In other words, it starts with
a product and then tries to sell this product to customers, instead of starting
with a customer and considering the needs and wants of this customer. An
example is a TV remote control which has more than 50 buttons and is capable
of everything, but does the customer really need and want it? It is based on the
idea that consumers will favour products which offer the most quality,
performance and features. Therefore, the aim is to improve the product.
However, focusing too much on the product may also lead to missing the actual
aim of marketing: Imagine you are a manufacturer of mousetraps. You design
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and produce the best mousetrap the world has ever seen, expecting that
everyone will buy it. But does the world actually want to see your product, does
it need this mousetrap, only because it is nicer, better, cheaper? The solution
people are looking for might be a spray, an exterminating service or something
else. So focusing only on improving your products does not mean success.

3. Selling Concept
The Selling Concept is, as the name indicates, all about selling, which involves
aggressive selling to any customer. It is of minor importance who this customer
may be, why he might need the product, which usually automatically leads to a
short-term customer relationship. Consequently, the Selling Concept takes on
an inside-out perspective, starting with the existing products and focusing on
finding customers for these. In other words, it is all about selling what the
company makes, following the idea that consumers will not buy enough of the
company’s products unless it undertakes a large selling and promotion effort.
There are industries where this concept holds and often is the only solution.
Typically, it is practised with unsought goods, that is, products that consumers
normally do not think of buying, such as insurances or blood donations. As said
before, this carries the risk that the only focus is on creating a sale, but not on
building profitable long-term customer relationships.

4. Marketing Concept
The Marketing Concept is the first approach which can actually fulfill the needs
of a marketing strategy: building profitable long-term relationships by
maximizing value for the customer. Why? It is about knowing the needs and
wants of target markets and delivering satisfaction better than competitors do.
Consequently, the Marketing Concept takes on an outside-in perspective,
starting with the customer needs, and aiming to find the right products for the
customer. In other words, instead of the product-centred ‘make and sell’
philosophy, the Marketing Concept is a customer-centred ‘sense and respond’
philosophy. Instead of finding the right customers for a product it aims to find
the right products for target customers. In contrast to the above explained
concepts, the Marketing Concept yields more customer value by creating lasting
relationships with the right customers, which is based on customer value and
satisfaction.

5. Societal Marketing
While in former days, a company was a closed system, nowadays it has to be
open. In other words, it has to consider what the society wants and will accept,
now and in the future. The Societal Marketing Concept addresses these issues.
Therefore, it is an advanced version of the Marketing Concept, questioning that
the latter overlooks possible conflicts between consumer short-term wants and
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consumer long-term welfare. Therefore, the Societal Marketing Concept

considers what the customer wants now, but at the same time looks at what
society wants now and in the future, calling for the satisfaction of society’s
long-term interests. It aims to meet the present needs of consumers and
businesses while simultaneously preserving the ability of future generations to
meet their needs. Factors that might be involved in this philosophy often aim at
being socially and environmentally responsible, addressing issues such as
pollution, employment conditions, safety, corporate social responsibility…
Nowadays, the societal marketing concept is may be the best orientation, since
it looks at the long-term interests of society and thereby forms a strong basis for
an effective marketing strategy. However, it is also the most difficult one to
achieve. Companies have to balance three considerations at the same time: the
company’s profits, consumer wants, and society’s interests.

4. Discuss the concept of customer relationship management. Why is it essential that a business
incorporates this in its operations?

 Customer relationship management (CRM) refers to the principles, practices, and

guidelines that an organization follows when interacting with its customers. From the
organization's point of view, this entire relationship encompasses direct interactions
with customers, such as sales and service-related processes, and forecasting and
analysis of customer trends and behaviors. Ultimately, CRM serves to enhance the
customer's overall experience.

Often used to refer to the technology companies and the systems, such as Salesforce,
that help manage external interactions with customers. The major areas of growth in
CRM technology include software, cloud computing, and artificial intelligence.

 Essentials of CRM
Elements of CRM range from a company's website and emails to mass mailings and
telephone calls. Social media is one way companies adapt to trends that benefit their
bottom line. The entire point of CRM is to build positive experiences with customers to
keep them coming back so that a company can create a growing base of returning
customers.

Increasingly, the term CRM is being used to refer to the technology systems companies
can engage to manage their external interactions with customers at all points during the
customer lifecycle, from discovery to education, purchase, and post-purchase.

With an estimated global market value of over $40 billion in 2018, CRM technology is
widely cited as the fastest-growing enterprise-software category, which largely
encompasses the broader software-as-a-service (SaaS) market. Five of the largest
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players in the CRM market today include cloud computing giant Salesforce, Microsoft,
SAP, Oracle and Adobe Systems.

Types of Customer Relationship Management - CRM Technology

1. CRM Software
2. CRM Cloud Solutions
3. CRM Human Management and Artificial Intelligence

5. Why is marketing as important for not-for-profit organizations as profit-driven ones?

 For-profit and non-profit businesses ultimately have the same objective: make money.
Whether you’re selling a tangible product or service or you’re trying to attract donors
for your cause, the bottom line is you need revenue. And that requires an effective and
memorable marketing strategy.