please answer from the notes below no outside answer

3

Explain fully marketing segmentation including the bases for segmentation.

Explain fully marketing sizing, market targeting, and market niche.

please answer from the notes below

4

Explain fully the CRM levels and the integration of CRM.

1 Explain fully how a CRM supported customer-responsive strategy results in a competitive advantage

Strategic Market Segmentation

Learning Objectives

Levels and types of market segmentation

Market-driven strategy and segmentation

Activities and decisions in market segmentation

Defining the market to be segmentedIdentifying market segments

Forming market segments

Finer segmentation strategies

Selecting the segmentation strategy

Market-Driven Strategy and Segmentation:

Market segmentation, value opportunities and new market space

Market targeting and strategic positioning

Market Segmentation, Value Opportunities and New Market Space

Market segmentation - Placing the buyers in a product-market into subgroups

Examining specific market segments helps to identify how toAttain a closer match between buyers' value preferences and the organization's capabilities

Compare the organization's strengths (and weaknesses) to the key competitors in each segment

Market Targeting

Market targeting consists of:Evaluating and selecting one or more segments whose value requirements provide a good match with the organization's capabilities

Strategic PositioningPositioning strategy - Combination of actions management takes to meet needs and wants of each market target Consists of:

Product(s) and supporting services

DistributionPricingPromotion components

Defining the Market to be Segmented

Important consideration in defining market to be segmented is

Estimating variation in buyers' needs and requirements at different product-market levels

Identifying the types of buyers included in the market

Identifying Market SegmentsSegmentation variables

Characteristics of people and organizations

Product use situation segmentation

Buyers' needs and preferences

Purchase behavior

Segmentation Variables

One or more variables may be used to divide the product-market into segments

Demographic and psychographic

Use situationNeeds and preferences

Purchase-behavior

Characteristics of People and Organizations

Consumer markets - Characteristics of people fall into two major categories

:Geographic and demographic

Psychographic

Organizational segmentation is aided by examining:

The extent of market concentration

The degree of product customization

Product Use Situation Segmentation

Markets can be segmented based on how the product is used

Needs and preferences vary according to different use situations

Mass customization offers a promising means of responding to different use situations at competitive prices

Buyers' Needs and Preferences

Needs and preferences specific to products and brands can be used as segmentation bases and segment descriptors

For example:Loyalty statusBenefits sought

Proneness to make a dealBuyers' Needs and Preferences

Consumer needs

Physiological needs

Need for safety

Need for relationships with other people

Personal satisfaction needs

Buyers' Needs and Preferences

Understanding the nature and intensity of needs is important in:

Determining how well a particular brand may satisfy the need

Indicating what change(s) in the brand may be necessary to provide a better solution to the buyer's needs

Buyers' Needs and Preferences

AttitudesEnduring systems of favorable or unfavorable evaluations about brands

Reflect the buyer's overall liking or preference for a brand

May develop from:

Personal experienceInteractions with other buyersMarketing efforts

Buyers' Needs and Preferences

PerceptionsProcess by which an individual selects, organizes, and interprets information inputs to build a meaningful picture of the world

People perceive things differently

Purchase Behavior

Consumption variables useful in segmenting consumer and business marketsLevel of product use may not necessarily identify the best value opportunities

Useful to classify buying decisions according to:

Their characteristics

Products to which they apply

Marketing strategy implications of each type of purchase behavior

Forming Market Segments

Requirements for segmentation

Approaches to segment identification

Customer group identification

Forming groups based on response differences

Requirements for Segmentation

Useful criteria for evaluating a potential segmentation strategy:

Response differences

Identifiable segments

Actionable segments

Cost/benefits of segmentation

Stability over timeProduct differentiation and market segmentationExhibit 3.8 - Approaches to Segment Identification

Customer Group Identification

Necessary to select one or more of the characteristics of people or organizations as the basis of segmentation

Segments are formed by

:Management judgment and experience

Supporting statistical analyses

Exhibit 3.9 - Product-Market Segmentation Dimensions for Hotel Lodging Services

Management Insight and Available Information

Management's knowledge of customer needs is a useful guide to segmentation

Business segment variables include:

Type of industry

Size of purchas

eProduct application

Cross Classification Analyses

Identify customer groups using descriptive characteristics

Compare response rates by placing the information in a table

Data Mining for Segmentation

Useful in consumer market segmentation

Databases are organized by geography and buyers' descriptive characteristics

Can be used to identify:

Customer groups

Design effective marketing programs

Improve the effectiveness of existing programs

Segmentation Illustrations

Important to recognize that segmentation has an international dimension in many markets

At the simplest level, country differences may dictate the need for variations in the sizes of products

Forming Groups Based on Response Differences

Alternative to selecting customer groups based on descriptive characteristics:

Identify groups of buyers by using response differences to form the segments

Segments vary in responsiveness based on:

Relative priceRelative service

Forming Groups Based on Response Differences

Cluster analysis

Groups people according to the similarity of their answers to questions

Perceptual maps

Uses consumer research data to construct perceptual maps of buyers' perceptions of products and brands

Exhibit 3.11 - Consumer Perception Mapping Illustration

Finer Segmentation Strategies

Logic of finer segments

Finer segmentation strategies

Logic of Finer Segments

Factors add up to the benefits of considering very small segments

The capabilities of companies to offer cost effective, customized offerings

The desires of buyers for highly customized products

The organizational advantages of close customer relationships

Finer Segmentation Strategies

Finer segmentation issues

How much variety should be offered to buyers?

Will too much variety have negative effects on buyers?

Is it possible to increase buyers' desire for variety, creating a competitive advantage?

What processes should be used to learn about customer preferences?

Selecting the Segmentation Strategy

Deciding how to segmentStrategic analysis of market segments

Deciding How to Segment

Choice of a segmentation method depends on:

The maturity of market

The competitive structure

The organization's experience in the market

Strategic Analysis of Market Segments

Each market segment of interest needs to be studied to determine its potential attractiveness as a market targetMajor areas of analysis:

Customers

Competitors

Positioning strategy

Financial and market attractiveness

Segment "Fit" and Implementation

Important aspect of evaluating segment attractiveness

How well the segments match company capabilities

The ability to implement marketing strategies around those segments

• Strategic Customer Management: Systems, Ethics, and Social Responsibility 04

• LearningObjectives

• Pivotal role of customer relationship management
• Developing a CRM strategy
• Value creation process
• CRM and strategic marketing
• Ethics and social responsibility in strategic marketing
• Pivotal Role of Customer Relationship Management
• CRM in perspective
• CRM and database marketing
• Customer lifetime value
• CRM in Perspective

• Seen as little more than building relationships with customers
  • To match a company's product offer better with customer needs

• Seen as developing a unified and cohesive view of the customer
  • Without regard to how the customer chooses to communicate with the organization
• CRM in Perspective
• Seen as consisting of three main elements:
  • Identifying, satisfying, retaining, and maximizing the value of a firm's best customers
  • Wrapping the firm around the customer to ensure that each contact with the customer is appropriate
  • Creating a full picture of the customer
• CRM and Database Marketing
• Database created through CRM technology should contain information about:
  • Transactions
  • Customer contacts
  • Descriptive information
  • Response to marketing stimuli
• Customer Lifetime Value
• Calculates past profit produced by the customer for the firm which is:
  • The sum of all the margins of all the products purchased over time, less the cost of reaching that customer
• Add a forecast of margins on future purchases discounted back to their present value
• Developing a CRM Strategy
• CRM levels
• CRM strategy development
• CRM implementation
• CRM Levels
• Levels from which CRM can be viewed:
  • Company-wide
    • Provides a strategic focus for CRM
  • Customer-facing
    • Offers single view of the customer across all of the organization's access channels to the customer
  • Functional
    • Considers the processes that are needed to fulfill required marketing functions
• CRM Strategy Development
• Major steps in developing a CRM strategy:
  • Organizational commitment to CRM
  • The project team
  • Business needs analysis
  • The CRM strategy
• Exhibit 4.1 - The Steps in Developing a CRM Strategy
• Exhibit 4.2 - Develop and Define the CRM Strategy to Guide the Management Process
• Successful Implementation
• Front office that integrates sales, marketing, and service functions across all media
• A data warehouse that:
  • Stores customer information and the appropriate analytical tools with which to:
    • Analyze that data and learn about customer behavior
• Successful Implementation
• Business rules developed from the data analysis
• Measures of performance that enable customer relationships to continually improve
• Integration into the firm's operational support systems, ensuring the front office's promises are delivered
• Causes of Failure
• Implementing CRM before creating a customer strategy
• Putting CRM in place before changing the organization to match
• Assuming that more CRM technology is necessarily better
• Investing in building relationships with disinterested customers
• Value Creation Process
• Customer value
• Value received by the organization
• CRM and value chain strategy
• Value Creation Process
• Defined as:
  • The value the customer receives
  • The value the organization receives
• Customer Value
• Value proposition - Expresses the benefits received by the customer
  • Explains the relationship among:
    • The performance of the product
    • The fulfillment of the customer's needs
    • The total cost to the customer over the customer relationship life cycle
• Value Received by the Organization
• Customer lifetime value (CLV) - A key concept associated with the value received by the organization
  • Expected profitability of a customer over the time-span of the relationship with the customer
• CRM and Value Chain Strategy
• Important that CRM be integrated with the different channels that access end-user customers
• Many companies interact with customers using multiple channels including:
  • Salespeople
  • Value chain partners
  • Email and Internet
  • Telephoning
  • Direct marketing
• CRM and Strategic Marketing
• Implementation
• Performance metrics
• Short-term versus long-term value
• Competitive differentiation
• CRM and Strategic Marketing
• Implementation - Critical to view this as more than technology focused on efficiency
• Performance metrics
  • Sales, profitability, and market share
  • Customer acquisition cost
  • Conversion rates (from lookers to buyers)
  • Retention/Churn rates
  • Same customer sales rates
  • Loyalty measures
  • Customer "share of wallet"
• CRM and Strategic Marketing
• Short-term versus long-term value
  • Long-term issues should be considered when:
    • Decisions are made about a company's customer priorities using historical customer profitability
  • Customer lifetime value - An attractive measure to use to examine long-term customer attractiveness
• CRM and Strategic Marketing
• Competitive differentiation
  • Lack of competitive advantage - Requires more than just investment in CRM technology
    • Particularly if it is poorly implemented
  • Information-based competitive advantage - The creation of a major new source of knowledge about customers
• Ethics and Social Responsibility in Strategic Marketing
• Corporate reputation
• Customer value and competitive positioning
• Ethics and Social Responsibility in Strategic Marketing
• Increasingly significant to the creation of effective customer relationships
  • In part because of the impact on corporate reputation
• Corporate Reputation
• Damage to corporate reputation of a business can:
  • Substantially reduce its ability to compete
  • Undermine the value of a company
• Strength or weakness of an organization's corporate reputation impacts:
  • Customer perceptions of how attractive it is to do business with that company
• Corporate Reputation
• Ethical imperatives
• Defining ethical standards
  • Business ethics
  • Marketing ethics
• Drivers of ethical demands
  • Green and ethical consumer
  • Ethical consumerism
• Corporate Reputation
• Proactive responses by firms - Trends that are indicative of the relevance of ethics and CSR in firms
  • Establishment of ethics executives
  • Codes of ethics and internal procedures to provide a framework for ethics actions
• Corporate Reputation
• Organizational involvement - Includes:
  • Favorable organization culture
  • Assignment of responsibility
  • Ethics codes
  • Operating processes/guidelines
  • Action
  • Monitoring and control
• Corporate social responsibility initiatives
  • Spans economic, legal, ethical, and philanthropic concerns by an organization and its stakeholders
• Corporate Reputation
• Defining CSR - Understood to encompass company activities that
  • Integrate social and environmental concerns into business operations
    • Into the company's interaction with other stakeholders, on a voluntary basis
• Drivers of CSR:
  • Defensive CSR
  • Strategic CSR
• Creating shared value
• Customer Value and Competitive Positioning
• Escalating transparency - Underlines the importance of CSR to a company's competitive position with customers