1. 1-1Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Adapting Marketing to the New Economy Major Drivers of the New Economy –Digitalization and Connectivity –Disintermediation and Reintermediation –Customization and Customerization –Industry Convergence

2. 1-2Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Table 2-1: Old Economy vs. New Economy Old EconomyNew Economy Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Overpromise, underdeliver Organize by customer segments Focus on customer lifetime value Look also at marketing scorecard Focus on stakeholders Everyone does the marketing Build brands through behavior Focus on customer retention and growth Measure customer satisfaction and retention rate Underpromise, overdeliver

3. 1-3Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Figure 2-1: The Supplier- Customer Relationship: Traditional and New Economy Structures

4. 1-4Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Adapting Marketing to the New Economy How Marketing Practices are Changing: Customer Relationship Marketing – –Reduce rate of customer defection – –Increase longevity of customer relationship – –Enhance growth potential through cross-selling and up-selling – –Make low profit customers more profitable or terminate them – –Focus disproportionate effort on high value customers

5. 1-5Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Mass Marketing vs. One-to-One Marketing Mass MarketingOne-to-One Marketing Average customer Customer anonymity Standard product Mass production Mass distribution Mass advertising Mass promotion One-way message Economies of scale Share of market All customers Customer attraction Individual customer Customer profile Customized market offering Customized production Individualized distribution Individualized message Individualized incentives Two-way messages Economies of scope Share of customer Profitable customers Customer retention

6. 1-6Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com Adapting Marketing to the New Economy Four steps for One-to-One Marketing Don’t go after everyone, identify prospects. Define customers by their needs and their value to the company. Individual interaction with customers builds stronger relationships. Customize messages, services, and products for each customer.

7. 1-7Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com PERSONAL SELLING IN INFORMATION AGE INDUSTRIAL--1950s INFORMATION--PRESENT Evolution from industrial to information economy

8. 1-8Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com SHIFT TO INFORMATION ECONOMY Advances in transport and manufacturing Strategic resources are capital and natural resources Products and factories define the business Sales success means meeting quotas Advances in information technology Strategic resource is information Business defined by customer relations Sales success depends on adding value INDUSTRIAL INFORMATION

9. 1-9Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com EVOLUTION OF PERSONAL SELLING MARKETING ERA 1950s CONSULTATIVE SELLING ERA 1960s-1970s STRATEGIC SELLING ERA 1980s PARTNERING ERA 1990s-Present

10. 1-10Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com MARKETING AND CONSULTATIVE ERAS MARKETING –Sales team as source of strategic information on…product--market-- service CONSULTATIVE – Emphasis on need identification – Transactional selling – Information sharing & negotiation replace manipulation

11. 1-11Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com STRATEGIC AND PARTNERING ERAS STRATEGIC – Emphasis on strategic market plan – Tactics to achieve strategic plan – Product positioning vital PARTNERING – Customer, not product, as driving force – Emphasis on strategies that create customer value

12. 1-12Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com PERSONAL SELLING: DEFINITION PERSON-TO-PERSON COMMUNICATION WITH PROSPECT – – DEVELOPING RELATIONSHIPS – – DISCOVERING NEEDS – – MATCHING PRODUCTS WITH NEEDS – – COMMUNICATION OF BENEFITS – – A PROCESS THAT ADDS VALUE

13. 1-13Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com SELLING MODEL

14. 1-14Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com INTERRELATIONSHIP OF BASIC STRATEGIES

15. 1-15Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com EFFECTIVE RELATIONSHIP STRATEGY FOUR KEY GROUPS

16. 1-16Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com E-COMMERCE AND COMPLEX SALE Complex sales involve several forms of information technology support Tools include: –electronic product catalogs –contact management systems –Internet applications –presentation packages like this one

17. 1-17Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com VALUE CREATION Value = creative improvements enhancing customer experience Consumer economy rewards sales people who add value at each step When customer not aware of value added by salespeople – focus may shift to price

18. 1-18Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com RELATIONSHIPS ADD VALUE Customers perceive value added when they feel comfortable with salesperson Certain salesperson traits help create perception of value –Accountability –Honesty –Sincere concern for customer welfare

19. 1-19Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com WIN-WIN PHILOSOPHY CUSTOMER SATISFACTION PRIMARY FIRST STEP IN DEVELOPMENT OF RELATIONSHIP STRATEGY BOTH PARTIES EXIT SALE FEELING SATISFIED

20. 1-20Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com WIN-WIN vs. WIN-LOSE WIN-WIN TYPES --Help others solve their problems --Fix what caused the problem --Make life joyous for all concerned -- Learn from past, live in present, set future goals --Honor commitments WIN-LOSE TYPES -- See a problem in every solution --Fix the blame -- Let life happen, are not proactive -- Live in the past -- Make promises they never keep

21. 1-21Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com CHARACTER AND INTEGRITY Character includes high personal standards, integrity, honesty, and moral fiber Integrity involves achieving congruence between what you know, say, and do

22. 1-22Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com CUSTOMER RELATIONSHIP MANAGEMENT CRM - SOFTWARE CRM enhances relationship quality Promotes rapid and effective client communication Written records help avoid miscommunication

23. 1-23Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com EVOLUTION OF PARTNERING Buzzword of 1990s, business reality in 2000s “Strategically developed long-term relationship that solves customer’s problems” Relationship selling relies on customized approach to each client Enhanced with high ethical standards and sales automation

24. 1-24Vijay Bhandari - Senior Faculty-Consultancy - NMIMS vb73@hotmail.com PARTNERING—HIGHEST FORM Strategically developed high quality, long-term relationship focusing on solving customer problems Must be viewed as process, not an event