attracting customer

8/22/2019 Attracting Customer

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Topic

Attracting Customer

through Marketing


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Objective

Define the marketing principles

known as the four Ps/Seven Ps

and explain how they apply to yourbusiness venture

Identify what is needed for starting

up your business venture


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What Is Marketing?

Choosing target markets, getting, keeping, and

increasing customers through creating,

managing, communicating, and delivering

superior customer value.

Like an iceberg, over 80-90% of

marketing occurs out of the

sight of the consumer


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Peter Drucker on Marketing?

Peter Drucker describes the process

of marketing this way: the aim ofmarketing is to know and understand the

customer so well that the product orservice fits him/her and sells itself.

Ideally marketing should result in a

customer who is ready to buy. All thatshould be needed then is to make the

product or service available.


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Selling is only the tip of the iceberg

There will always be need for

some selling. But the aim of marketing is

to make selling superfluous. The aim of

marketing is to know and understand thecustomer so well that the product or

service fits him and sells itself. Ideally,

marketing should result in a customer whois ready to buy. All that should be needed is

to make the product or service available.

Peter Drucker


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Selling

The role/function of Selling

(or Salesmanship) is to make a sale

The sales person in most

companies is the single mostimportant link with the customer.


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The Chartered Institute of Marketing

Marketing is the

management process thatidentifies, anticipates and

satisfies customerrequirements profitably


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What is Management?

Management consists of theinterlocking functions of

creating corporate

policy and organising, planning,

controlling,

and directing an organization'sresources in order to achieve the

objectives of that policy.


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Identifies

Research Anticipates

Forecast Satisfies customer

Customer Service Profitably

Good Returns


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Marketing is the management process through

which goods and services move from concept to

the customer. It includes the coordination of fourelements called the 4P's (Marketing Mix) of

marketing:

(1) identification, selection and development ofa product,

(2) determination of its price,

(3) selection of a distribution channel to reachthe customer's place, and

(4) development and implementation of a

promotional strategy.


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For example

New Apple products are developed to include

improved applications and systems, are set at

different prices depending on how much

capability the customer desires, and are sold in

places where other Apple products are sold.

In order to promote the device, the new product

is featured at tech events and is highly

advertised on the web and on television.


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Adcock et al

The right product, in the

right place, at the righttime, and at the right

price


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What is marketed?

Services

Products

Events

Experiences

People

Places

Ideas


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What is a product?

A product is anything that canbe offered to a market to satisfy

a want or need, including

physical goods, services,

experiences, events, persons,

places, properties,organisations, information and

ideas.


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The Marketing Mix (4Ps)

This is the set ofmarketing tools that the

firm uses to pursue its

marketing objectives inthe target market


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The Four Ps


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Marketing Mix Marketing mix decisions include:

Product: provides customer solution (price levels,credit terms, price changes and discounts).

Price: represents the customers cost (price levels,

credit terms, price changes and discounts).

Place: customer convenience is key (inventory,channels of distribution and number of

intermediaries).

Promotion: communicates with customer(advertising, publicity, sales promotion, personal

selling and sponsorship).


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7-18

Advertising

Makes people aware of yourproduct so they are persuaded to

buy it

Major goals

Raise customer awareness of

product

Explain product's comparative

feature and benefits Create an association between

product and lifestyle


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Social networks sites, such as Facebook andMySpace, allow entrepreneurs to connect with

potential and existing customers at little or no

cost.

More than half of Facebook users are over the

age of 25.

These sites now offer business survey tools and

advertising functionsfor promotional purposes.

Social Networking


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The 7Ps of the marketing mix

The 7Ps components of the marketing mix


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The 7Ps of Services Marketing

Traditional Marketing Mix Applied to Services Product

Place (and Time)

Price Promotion (and Education)

Extended Marketing Mix for Services

Process

Physical Evidence

People


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People As a service is intangible, it is the people/staff

delivering the service that add value to customers,not the product features. It is through the quality ofthe service delivered by staff that customersatisfaction is affected.

The people part of the mix, therefore, acknowledgesthe importance of training and motivating staff todeliver a good quality service and portray anappropriate image.

Internal marketing techniques such as newsletters(to keep staff informed of changes), and staffincentives can be used to help the staff producegood levels of customer service.

P


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Processes A service is a set of processes and it is through these

processes that an organisation differentiates its

service from its competitors, thus gainingcompetitive advantage; for example speed ofdelivery, efficiency of booking/ enquires, can beused to gain competitive advantage.

In recent years many businesses have used e-commerce functions to improve their service tocustomers, i.e. technical help online or onlineordering and/or stock checking facilities.Additionally, it is through its processes that anorganisation can develop closer customerrelationships, for example, by sending customersreminders of appointments or reminders of expirydates etc.

Ph i l E id


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Physical Evidence Services are intangible and cannot be seen or felt

by customers. Therefore, marketers will use

techniques to make their services as tangible aspossible.

The term physical evidence refers to techniques

for making services more tangible in the eyes ofthe customer; examples would be the dcor in arestaurant, providing customers with programmesat concerts/theatre shows, certificates for success

in examinations etc. The use of physical tools such as these can help

create a brand image and improve customerrecognition of the service brand


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Figure 1.4 The product life-cycle curve

P d t Lif C l


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Product Life-Cycle A companys positioning and differentiation strategy must

change as the product, market and competitors change over the

product life cycle (PLC). To say that a product has a life cycle is toassert four things:

Products have a limited life.

Sales pass through distinct stages, each posing

different challenges, opportunities and problemsto the seller.

Profits rise and fall at different stages of the

product life cycle. Products require different marketing, financial,

manufacturing, purchasing and human resourcestrategies in each life cycle stage.

Markets


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There are three major steps in target marketing. The first is market segmentation, dividing a

market into distinct groups who might require

separate products and/or marketing mixes. The second step is market targeting, evaluating

each segments attractiveness and selecting one

or more of the market segments.

The third step is market positioning, developing

competitive positioning for the product and an

appropriate marketing mix.

Target Marketing

Markets


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Target marketThe limited

portion of theindustry that the

firm goes after ortries to appeal to

Industry / Target Market Feasibility Analysis


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Target Market Attractiveness

Target marketShould be large

enough for thenew business but

small enough to

avoid attracting

larger competitors


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Segmentation

Subdividing of a market into distinct subsets of customers

according to needs and buying habitsDifferentiation

It is the act of designing a set of meaningful differences to

distinguish the companys offering from competitors

offeringsCompetitive Advantage

In order to gain and/or maintain competitive advantages,

organisations can adopt three basic strategies:

1. Cost Leadership2. Differentiation

3. Focus


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Segmentation Variables

Geographic

Region, city or metropolitan area, population density, andclimate

Demographic

Age, gender, family size, family life cycle, income,occupation, education, religion, race, and nationality

Psychographic

Social class, lifestyle, attitudes toward various societalsituations, and personality

Behavioural

Occasion of product use, user status, usage rate, loyaltystatus, readiness to purchase, and attitude toward product


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Differentiation Strategies

1. Differentiating the productitself

2. Differentiating on the basis ofservices offered

3. Differentiating by personnel

4. Differentiating by image


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Service

It is any act or performance thatone party can offer to another

that is essentially intangible and

does not result in the ownership

of anything. Its production may or

may not be tied to a physicalproduct.


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Customers evaluate service quality

using five issues:

Reliability: ability to perform the servicedependably.

Responsiveness: the ability to provide prompt

service. Assurance: the knowledge and courtesy of

employees and their ability to convey trust.

Empathy: caring, individualised attention tocustomers.

Tangibles: physical evidence of the service canbe used to judge the service.


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Characteristics of Services

Intangibility

Inseparability

Variability

Perishability

Lack of Ownership


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Characteristics of Services

Intangibility they cannot be seen,

touched or tried before purchase.

Inseparability they are used or"consumed" at the time of purchase and,

as such, cannot be separated from the

provider.


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Characteristics of Services Perishability they cannot be stored for

use at a later time.

Variability they are dependent on theperson who is providing the service and, as

such, will vary from time to time in

accordance with when they are being

provided and the circumstances

surrounding the provision.


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Lack of Ownership Services cannot be owned. As we have seen, there is

no tangible element involved in a service and so the

service terminates once the experience comes to an

end.

At the end of a plane journey the passenger alightsfrom the aircraft and the experience, positive or

negative, becomes a memory.

The seat on the plane has been "rented" for a period

of time for the price of the ticket. The seat remains

the property of the airline and is available to be

rented by other customers at other times.


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Lack of Ownership However service providers encourage the further use of

the service through frequent flyer programmes to

increase customer involvement in the service.

As a result customers will also develop a perception of

the brand through familiarisation with the service andthe level of the experience enjoyed.

It is for the marketer to ensure that this experience is

positive in order to achieve good customer relationships

and retention and manage these relationships

effectively.


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Branding

Brand

It is a name, term, sign, symbol,

design, or a combination of them,intended to identify the goods or

services of one seller and to

differentiate them from

competitors


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Develop a brand for your Business

Be able to develop a brand whichmay include any of the following:

a logo a letterhead

a shop front design a clothing range/uniform


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Advantages of Branding

Easy Selling

Legal Protection

Customer Loyalty

Easy Market Segmentation

Image Building


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Business Plan

Product/Service

What are your products/services

Price

How will you price your products/services Promotion

How will you promote your products/service

Place

Where would customer reach you to buy

your products/service2-43


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Business Plan

State your Business Mission

State your Business Objectives

Who are your customers

Who are your competitors

What is your Competitive Advantage

Do a SWOT analysis for your business

attracting customer

Documents