Strategic Marketing: 2 Year Full Time PGDM Session 2

Strategic Marketing
2 Year full time PGDM

Session 2
Area – Marketing
Credits - 4
Sessions 10, 11 & 12
An Overview of the Sessions
Session Topic Sugg. readings * Sugg. readings
Number Chapters ( RB) Chapters ( SJ)
1. Introduction and overview of marketing strategy 2

2. Customer focus and profits 1,2
3. Environment and the company 6,3
4. Strategic objectives and marketing plans 13 8
5. Portfolio analysis and Strategic Market planning 10 7,10
6. Strategic options 11,12 9
7. Market potential, demand and share 3 13
8. Customer experience and value creation 4 5
9. Market segmentation strategies 5 5
10. Understanding competition 4
11. Competitive position and advantage 6
12. Product positioning strategies 7 14
13. Pricing strategies 8 15
14. Distribution strategies 16
15. Promotion and Communication strategies 9 17
16. Strategy implementation and challenges 14 11
17. Simulation workshop TBA
18.
19. Simulation workshop TBA
20.
B
E
C
A
U
S
E
AM
A
Quote – Unquote
• Marketing is a civilized form of warfare in
which most of the battles are won by ideas,
words and disciplined thinking ….
– Albert W Emery
How about testing your basics ? ?
• What is the traditional view of marketing?

• A) Firms should just focus on production
because if the products are good then
they will automatically sell.
• B) Firms should just focus on production
and selling because marketing occurs as a
part of the selling process.
• C) Firms should have a proper marketing
team that can increase consumers'
awareness of their products and rouse
their interest in them.
• D) Firms should price their products as
low as possible so that marketing them
becomes easy.
• E) Firms should remember that promotion
is the most important of the four Ps.
• Answer: B
• Services account for nearly 40 percent of
global trade.
• Answer: FALSE
Some more ??
• AT&T, GE, Samsung, Shell Oil, and others
have engaged in a(n) ________ exercise by • What is a global firm?
sponsoring the Innovation Challenge, where • A) A firm that operates in one country and
top MBA students compete in teams to exports its goods and services to foreign
address company problems. countries.
• A) crowdcasting • B) A firm that operates in more than one
• B) syndication country and has a sales and marketing staff
in those countries.
• C) net monitoring
• C) A firm that operates in more than one
• D) product-preference
country and captures R&D, production,
• E) advertising evaluation logistical, marketing, and financial
• Ans : A advantages not available to purely domestic
• Researchers usually start their investigation competitors.
by examining some of the rich variety of • D) A firm that sells its products and services
low-cost and readily available ________ across the world but restricts
data, then collect ________ data if the manufacturing to the home country.
needed data don't existing or are dated, • E) A firm that operates in more than one
inaccurate, incomplete or unreliable. country but restricts the sale of its products
• A) primary; secondary to the home country.
• B) secondary; primary • Answer: C
• C) primary; econometric • Important developing or emerging markets
• D) secondary; econometric include Brazil, Russia, India, Canada, and
• E) exploratory; econometric South Africa, often called "BRICS" for short.
• Answer: B • Answer: FALSE
Session 02
Customer Focus & Profits
Reading Reference :
Chapter 1 & 2
Marketing Management
Roger Best
Why Focus on Customers?
• A customer is the most
important visitor on our
premises.
• He is not dependent on us.
We are dependent on him.
• He is not an interruption in
our work – he is the
purpose of it.
• We are not doing him a
favor by serving him.
• He is doing us a favor by
giving us the opportunity
to serve him.
Why Customer Satisfaction is Important ?
• It’s a leading indicator of
consumer repurchase intentions
and loyalty
• It’s a point of differentiation
• It reduces customer churn
• It increases customer lifetime
value
• It reduces negative word of mouth
• It’s cheaper to retain customers
than acquire new ones
Customer Satisfaction Index ( CSI )
INDIAN CUSTOMER SATISFACTION INDEX (ICSI)
• ICSI has been launched in India, for measuring and
benchmarking organisations in India on customer
satisfaction, within & across sectors
• Hexagon Consulting has introduced the customer

satisfaction measurement & diagnostics in collaboration
and partnership with the globally respected
American Customer Satisfaction Index (ACSI), using the
ACSI customer satisfaction measurement and diagnostics
methodology.
• This unique measurement framework enables

organisations and companies in India to benchmark all
aspects of customer experience with industry peers and
eventually with best in class companies in other
industries(the measures, benchmarks and diagnostics, will
help them improve on end customer satisfaction).
Customer Satisfaction Index ( CSI )
INDIAN CUSTOMER SATISFACTION INDEX (ICSI)
• Consumers also benefit by getting an objective &
independent end customer satisfaction based
measure to benchmark organisations &
companies.
• Indian customer satisfaction measurement
index(ICSI) objectively benchmarks organisations,
using a science-based, proprietary methodology
of American Customer Satisfaction Index ( ACSI)
, across broad swath(manufacturing and services)
of Indian economy, covering both private and
public sector organisations.
• ICSI has started with the Indian banking sector
and over time plan to cover more
industries/sectors.
Do dissatisfied customers really complain ?
Direct Impact of customer dissatisfaction
Qualitative damage
to Brand Image
Quantitative damage to
Sales
Reduction in Lifetime
Value
Impact of Customer Dissatisfaction- Qualitative Damage
How does a dissatisfied customer react
?
• Telling others about their
dissatisfaction leading to Negative
word of mouth publicity
• Holding a grudge against the Brand /
Product
• Taking Revenge at the appropriate
opportunity
• The role of social media has
enhanced the platform for
expressing dissatisfaction
Estimating Customer Retention
Very Somewhat Somewhat Very

Dissatisfied Dis-Satisfied Dis-satisfied Satisfied Satisfied Satisfied
Definitely Will Probably Probably Plan Definitely

Will Not Will Not Will To Will
NOT Re-Purchase Re-Purchase Re-Purchase Re-Purchase Re-Purchase
Re-Purchase
Customer Satisfaction and Profit Impact
Customer
CSI Present Gross Retention Consumer
Customer Margins Cost Profit
% Score Profit
Revenue
Very Satisfied 25% 100 1200 60% 720 100 620
Satisfied 35% 80 800 50% 400 100 300

Somewhat
Satisfied 20% 60 300 40% 120 100 20
Somewhat
Dissatisfied 15% 40 80 40% 32 100 -68
Dissatisfied 3% 20 60 40% 24 100 -76

Very
dissatisfied 2% 0 50 40% 20 100 -80
100% 71.60 655 49% 350 100 250

Customer Lifetime Value
• CLV is defined as a measure of Customers’ Aggregate profit
to the firm over the total time that the customer deals with
the firm
• A profitable customer is one that yields a revenue system
over a period of time which exceeds the costs of acquiring,
selling and servicing the customer over that period of time.
• Repeat customers are loyal customers in waiting. They have
high profit potential
• Captive Customers are dissatisfied customers who have an
average to long customer history. They usually have a low
desire to repeat purchase and do not generally recommend
the company to others. ( example : an airline customer
who is forced to fly because of the timing of departure and
not necessarily the quality of service)
• Unprofitable customers are those resulted from mis-
managed customer selection. They are a drain since the
cost of acquisition is never likely to be recovered
Customer Revenue – Support Costs X Average length of
Relationship – Support Costs = Lifetime Value
For the financially inclined here is an exercise
• For four interactive marketing performance tools

and application exercises, go to
www.rogerbest.com
• Just enter the data and you will see the results
instantaneously.
• A useful tool to keep handy… recommended to all
students
That’s all guys and gals!!!
Session 3
Environment and the Company
Reading Reference :
Chapter 6 , 3
Marketing Planning & Strategy
Subhash Jain

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Strategic Marketing

2 Year full time PGDM

1. Introduction and overview of marketing strategy 2

• What is the traditional view of marketing?

• Hexagon Consulting has introduced the customer

• This unique measurement framework enables

Very Somewhat Somewhat Very

Definitely Will Probably Probably Plan Definitely

Very Satisfied 25% 100 1200 60% 720 100 620

Satisfied 35% 80 800 50% 400 100 300

Dissatisfied 3% 20 60 40% 24 100 -76

100% 71.60 655 49% 350 100 250

• For four interactive marketing performance tools

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