Four Levels of Marketing

Strategic Tactical Administrativ Transformation

Marketing Marketing e Marketing al Marketing

Transformational Marketing deals with the process of keeping the

marketing activities updated to the changing technology and
consumer patterns and emerging environmental dynamics (i.e.
changes in the macro, micro and task environments) …
In today’s era, it mainly covers Electronic Marketing …

Copyright: Raja Shuja-ul-Haq (2009)

 Understanding Customer
Value
Copyright: Raja Shuja-ul-Haq (2009)
 Universal Fact

Every company in the world is in the

“value business”

Companies survive by creating some

kind of value for their customers

Copyright: Raja Shuja-ul-Haq (2009)

 The Customer Value Equation

Customer Value =
Perceived Benefits –
Perceived Sacrifice

Copyright: Raja Shuja-ul-Haq (2009)

 Customer Value Creation

Customer Value

Positive Negative

Perceived Benefits: Perceived Sacrifice:

 Product Benefits  Monetary Costs

Minu
 Service Benefits  Time Costs
s
 Relationship  Energy Costs
Benefits
 Psychological Costs
 Image Benefits

Copyright: Raja Shuja-ul-Haq (2009)

 The Customer Value Equation

Customer Value =
Functional Benefits + Image
Benefits
Price +Time +Energy +Psychic
Costs
Functional benefits refer to either “superior
performance” or “superior economy” whereas image
benefits refer to the brand being used by the customer
as a vehicle of “self-expression”

Copyright: Raja Shuja-ul-Haq (2009)

 Customer Value Disciplines

Market-oriented companies attempt to create customer value in order to

attract and retain customers. Their aim is to deliver superior value to
their target customers.

Customer Value can be delivered by following one of the “value

disciplines”:

 Operational Excellence : providing reliable products and services at

competitive prices, delivered by minimum difficulty
 Customer Intimacy: tailoring the offerings to meet customers’
demand very precisely
 Product Leadership: offering leading-edge products and services

Copyright: Raja Shuja-ul-Haq (2009)

 Customer Value Disciplines

Successful companies
Market-oriented companies specialize
attempt (are value
to create customer considered
in order to
attract
by the andcustomers
retain customers.
asTheir
theaim is to deliver
best) in one superior
of thevaluevalue
to
their target customers.
disciplines and maintain an “above average”
performance (as compared to competitors) in
Customer
the other Value
two can…be delivered by following one of the “value
disciplines”:

 Operational Excellence : providing reliable products and services at

competitive prices, delivered by minimum difficulty
 Customer Intimacy: tailoring the offerings to meet customers’
demand very precisely
 Product Leadership: offering leading-edge products and services

Copyright: Raja Shuja-ul-Haq (2009)

 New ways of delivering superior value to
customers is marketing as a process,
not marketing as a department or
function

Copyright: Raja Shuja-ul-Haq (2009)

 Companies are known by the
type of value they offer to their
customers …

A company needs to specialize

in providing one of the three
types of customer value
dimensions …

Copyright: Raja Shuja-ul-Haq (2009)

 Customer Value Dimensions

Psychological
Value

Economic Value Functional Value

Copyright: Raja Shuja-ul-Haq (2009)

 Dimension of Customer Value

Psychological
Value

Economic Value Functional Value

1

Creating value for the customers by offering “relatively

lower” prices as compared to the other competing
brands in the market or offering “more quantity” for the
same price or “much more quantity” for a slightly more
price …
Copyright: Raja Shuja-ul-Haq (2009)
 Dimension of Customer Value

Psychological
Value

Economic Value Functional Value

2

Creating value for the customers by offering superior product

performance or superior / sophisticated set of technical
features in the product …

Copyright: Raja Shuja-ul-Haq (2009)

 Dimension of Customer Value

Psychological
Value
3

Economic Value Functional Value

This type of value is driven by intangibles such as

customer service, brand image, trust, relationship and
reputation …

Copyright: Raja Shuja-ul-Haq (2009)

 Understanding Customer
Satisfaction
Copyright: Raja Shuja-ul-Haq (2009)
Customer satisfaction occurs when customer’s perceived
performance of the product matches the customer’s
expectations from the product

Customer
Exceeding customer
expectations Delight

Meeting customer Customer

expectations Satisfaction

Not meeting customer Customer

expectations
Disappointmen
t

Copyright: Raja Shuja-ul-Haq (2009)

 Customer expectations (about the product) are formed
through post-buying experiences, word-of-mouth or
supplier’s marketing activities

Customer
Exceeding customer
expectations Delight

Meeting customer Customer

expectations Satisfaction

Not meeting customer Customer

expectations
Disappointmen
t

Copyright: Raja Shuja-ul-Haq (2009)

 Repeated customer delight, over a number of purchase
experiences, will eventually become a customer expectation

Customer
Exceeding customer
expectations Delight

Meeting customer Customer

expectations Satisfaction

Not meeting customer Customer

expectations
Disappointmen
t

Copyright: Raja Shuja-ul-Haq (2009)

 QDC Model of Customer Satisfaction

(Functional Value)

(Psychological Value) (Economic Value)

Copyright: Raja Shuja-ul-Haq (2009)

 Customer Delight
and Satisfaction
leads to Customer
Loyalty

Copyright: Raja Shuja-ul-Haq (2009)

Customer Loyalty
Ladder
Platinum
Long-term
Advocat
loyalty
e

Diamond
Support
er

Client Gold

One-off transactions

Custom Iron
er

Prospec Lead
t

Copyright: Raja Shuja-ul-Haq (2009)

 Understanding Marketing
Opportunities
Copyright: Raja Shuja-ul-Haq (2009)
 What is a Marketing
Opportunity?
Marketing opportunity is an area of
buyer need and interest in which
there is high profitability that a
company can perform profitably by
satisfying that need …
Therefore, a marketing opportunity exist
when a marketer identifies a customer
segment of sufficient size whose needs are
going unsatisfied

Copyright: Raja Shuja-ul-Haq (2009)

 Main Sources of Market
Opportunities
Supplying something in short-supply
(easiest level of marketing)

Supplying an existing product or service in

a new or superior way (moderately
tough level of marketing)

Supply a completely new product or

service (toughest level of marketing)

Copyright: Raja Shuja-ul-Haq (2009)

 Nine Ways to Find Market
Opportunities
Product

Existin Modifie New

g d

Modify our current Design new products

Sell more of our
products and sell that will appeal to
existing products to
Existin more of them to our our existing
our existing types of
existing customers customers
g customers (Market
(Product (New Product
Penetration)
Modification) Development)
Market
Enter and sell our
products in other Offer and sell Design new products
Modifie geographical areas modified products to for prospects in new
new geographical geographic areas
d (Geographical
Expansion) markets

Sell our existing Design new products

Offer and sell
products to new to sell to new types
New modified products to
types of customers of customers
new types of
(Segment (Diversification)
customers
Invasion)

Copyright: Raja Shuja-ul-Haq (2009)

 Understanding Marketing
Objectives
Copyright: Raja Shuja-ul-Haq (2009)
 VMV

 What are Visions, Missions and Values?

 What part does each of the above play in helping a

company achieve its goals?

Copyright: Raja Shuja-ul-Haq (2009)

 VMV Table

Issue Possible Descriptions

What are we here for? • Purpose

• Mission
• Aim

Where are we going? • Vision

• Goal, Destination
• Strategic Intent

What belief will guide our behaviour? • Values, Credibility

• Ethics, Principles
• Guideline, Rules,
Procedures

Copyright: Raja Shuja-ul-Haq (2009)

 Some Winning Marketing
Objectives
Marketing Objective No.1:

Win Through Higher Quality!!!

Companies with this objective strive to
maintain high quality of their products

They can, however, face four

problems:

1) Quality has a lot of meanings: If an automobile company claim

good quality, what does it mean? Better starting performance?
Faster acceleration? Better interior? or More durable exterior?
Quality therefore needs to be further defined

Copyright: Raja Shuja-ul-Haq (2009)

 Some Winning Marketing
Objectives
Marketing Objective No.1:

Win Through Higher Quality!!!

Companies with this objective strive to
maintain high quality of their products

They can, however, face four

problems:
2) People can not tell the quality of a product by looking at it: First
time customers, at best, have merely an image of quality without
any evidence … How would you tell which “home water purification
system” or “television receiver” is of good quality? (You would
probably consider only the brands that you have heard of before)
…

Copyright: Raja Shuja-ul-Haq (2009)