Download (Who) is a Customer?

Marketing Fundamentals
CUSTOMER-DRIVEN
Einstein created his theories
not from experiments,
but from thought problems.
We’re not Einstein, but this section has more to do with
philosophy than practice….
It purpose is to create a mindset….
Think of two occasions when you felt that you
were a valued customer.
Why did you feel that way?
Think of two occasions when you felt that you
had a negative experience as a customer.
Why did you feel that way?
Fundamentals
http://www.youtube.com/watch?v=KkBvzS_fJ2g&feature=player_embedded#
The marketing concept is the
philosophy that firms should analyze
the needs of their customers and then
make decisions to satisfy those needs,
better than the competition.
Today most firms have adopted the
marketing concept, but this has not
always been the case.
In 1776 in The Wealth of Nations, Adam Smith wrote
that the needs of producers should be considered only
with regard to meeting the needs of consumers. While
this philosophy is consistent with the marketing
concept, it would not be adopted widely until nearly
200 years later.
The Production Concept
Can we produce the product?
Can we produce enough of it?
The Sales Concept
Can we sell the product?
Can we charge enough for it?
Examples of Marketing
Concepts
http://www.youtube.com/watch?v=l4seWLW2KhQ&feature=player_embedded
Number 1
What (Who) is a Customer?
A customer?
Who are we talking about?
Not always clear:
Who is a customer?
Take a piece of paper and answer
the following questions:
Who is a customer?
1. Is a student a customer?
Who is a customer?
1. Is a student a customer?
2. In what ways are they
a customer?
Who is a customer?
1. Is a student a customer?
2. In what ways are they
a customer?
3. In what ways are they
not
a customer?
Is a student a product?
Is a student more like a patient?
Is the student a partner?
Further:
Practically no one tries to sell to everyone……
Why?
Because:
Not everyone is a Customer!
Markets are segmented:
Practically no one tries to sell to everyone……
Markets are segmented:
80/20 Rule
Demographics
Psychographics
Needs/Wants
Needs are: Wants backed by resources!
IS the customer always RIGHT?
Is the customer always right?
NO!
“The cliché is wrong. The right customer
is always right. The wrong customer, is
not right for the selling company.”
Jeffrey J. Fox
Okay Customers are:
Profitable
Loyal
Spreads positive WOM
Gives positive referrals
Okay customers can:
also be:
Tough, exacting, impatient, challenging, fickle,
exasperating, needy, insistent,
and a pain in the neck.
Not Okay customers are:
“Difficult”
1. The service provider doesn’t care about them
2. The service provider isn’t listening to them
3. The service provider isn’t doing anything to resolve
the problem
4. They have been victimized, unfairly treated
or taken advantage of
5. The service provider gives the customer the
run-around
6. Promises are not kept
Not Okay customers are:
About 3% of the population is clinically insane
Not Okay customers are:
About 3% of the population is clinically insane
Another 40% is neurotic…………
And we just don’t all agree on
things.
http://www.expedia.com/pub/agent.dll/qscr=dspv/htid=11379/crti=7/hotel-reviews
PROFITABLE
Low
Low
High
Customer Misfits
Big Spenders
Spinners
Underachievers
LOYAL
Win-Back Cust
Advocates
New Potentials
Loyalists
High
Student evaluation of teaching taken at random
from the internet as an example.
Teacher A (picked at random… named Smith)
Student 1
“I am still extremely disappointed I took this class.
I took it as an elective just because I thought it would be interesting...
wrong teacher. The tests were so hard; I'm a straight A student
and ended up with my first B. Don't take him…”
Teacher A
Student 2
“I like her as a person ,however, I wasn't very fond of her teaching style.
The last month all we did was presentations and were left on our own.
If you don't learn well this way, don't taker her. Otherwise she is pretty good.”
Teacher A
Student 3
“HE is a guy. His name is Roland Acosta. He's actually pretty good,
but his classes take FOREVER. Bring a laptop or small
GameBoy and you will be fine.”
Is Teacher A:
a good teacher, or a bad teacher….
Is Teacher A:
For that matter:
a man or a women?
Types of “difficult” customers
1. Verbal abusers
2. Blamers
3. Rule Breakers
4. Opportunists
5. Returnaholics
Berry, L.L, and Seiders, K. (2007) “A Cognitive-emotional Theory of Customer
Injustice and Emotional Labor.” Advances in the Psychology of Justice and
Affect. (D. De Cremer, Ed.), 199-226.
Not Okay customers are:
(bottom line)
Unprofitable:
i.e., not worth the price you are paying.
The wrong customer is wrong.
Actually….
All Businesses have Partners:
Partners:
Customers
Competitors
Employees
Governments
Society
The Media
To be successful:
All of these must be kept happy!
Number 2
The Importance of a Customer
Orientation
Clayson’s Simple Definition:
“Marketing is arranging a buyer for a
seller.”
This means:
1. Marketing is the process of creating
satisfying exchanges.
2. Wealth is created through free exchanges.
Marketing Concept:
“All marketing strategies should be based on
known consumer needs and/or wants.”
Extension:
“All firms and companies have the same product…
that is, a customer.”
Implications…………..
Managers get trapped by an inverted
pyramid….
Clayson’s Even Simpler Definition:
“Marketing is arranging free exchanges!”
“Marketing is arranging free
exchanges!”
This means…
1. Marketing is the process of creating satisfying exchanges.
2. Wealth is created through free exchanges.
You have a dollar….
I have a newspaper…
You go into a store to buy a shirt.
You go into a store to buy a shirt.
What is the product?
What is the promotion?
What is the price?
What is the place?
Number 3
What are Customers Like?
We like to think that
our customers are like
these people….
We like our customers to be upscale
and aware…..
http://www.uni.edu/resources/prospective-students
Perception is Reality!!
The right Stimulus!
Getting and holding Attention!
Creating the right Hypothesis!
The Importance of Memory!
Are Customers Rational?
Depends on what is meant by rational…
Depends on what is meant by rational…
1. The Theory of Utility (economics)
Depends on what is meant by rational…
1. The Theory of Utility (economics)
2. The Pressure of the Environment
Is a brain necessary for
learning?
Pavlov
How much of a
customer’s behavior is
determined by the
environment?
B.F. Skinner
Depends on what is meant by rational…
1. The Theory of Utility (economics)
2. The Pressure of the Environment
3. The Complication of the Psychic
How much of a
customer’s behavior is
determined by
unconscious factors?
Sigmund Freud
Depends on what is meant by rational…
1. The Theory of Utility (economics)
2. The Pressure of the Environment
3. The Complication of the Psychic
Depends on what is meant by rational…
1. The Theory of Utility (economics)
2. The Pressure of the Environment
3. The Complication of the Psychic
4. The Subtlety of Culture
How much of a customer’s behavior is
determined by cultural factors?
Norms
Depends on what is meant by rational…
1. The Theory of Utility (economics)
2. The Pressure of the Environment
3. The Complication of the Psychic
4. The Subtlety of Culture
5. The Control of Information
Marketing Maven:
A maven (also mavin) is a trusted expert in a particular field, who
seeks to pass knowledge on to others. The word maven comes
from the Hebrew, via Yiddish, and means one who understands,
based on an accumulation of knowledge.
Gatekeepers…
http://movies.nytimes.com/2009/12/20/movies/20scott.html
Information:
Example: Oliver North and Congress 1987
The Iran-Contra Affair
5/06/87
“Folks in North’s hometown recall his driving ambition”
Front page story
5/06/87 (Same day)
Nothing
5/08/87 North begins testimony
5/10/87
“North attracts support from sympathetic viewers.”
Front page story
5/10/87 (Same day)
Nothing
5/11/87
“Poll: Americans believe North but not Reagan.”
Front page story
5/11/87 (Same day)
“Poll: Americans believe North but not Reagan.”
Front page story
5/12/87
“North comes out as hero during week of hearings”
Front page story
5/12/87 (Same day)
Nothing
5/19/87
“Contras sack poor village in Nicaragua: Pregnant woman,
3 kids among killed in attack”
Source: NY Times
Top front page story
5/19/87 (Same day)
“Reagan urges more funding for Contras”
On page A3
5/20/87
“Nicaragua gets more aims” [from the Soviet Union]
First page story
5/20/87 (Same day)
Nothing
So….
What is news?
Information control has become a major
problem/opportunity in a connected society.
http://www.youtube.com/watch?v=5YGc4zOqozo
Number 4
What are They Actually Buying
Customers do not buy products.
They buy what products DO for them.
What does the product
do for you?
What products do is not always
obvious or tangible…..
What a product does for one person,
may not be what it does for someone else.
Buyers, Users, Payers are not always
the same Person.
And no….that was not Sarah Palin!
Number 5
How to Find Out What Customers Want/Need
What is Information?
Information is
something that changes
What You KNOW.
Information is Something that Changes
What You KNOW.
1. It is very valuable… and expensive.
2. It has a very pragmatic value.
Information:
Value
Dependent upon the value of
decisions that can be made with
a change in what you know.
Information is Something that Changes
What You KNOW.
1. It is very valuable… and expensive.
2. It has a certain value.
3. The amount of information 1/prob.
Information is Something that Changes
What You KNOW.
1. It is very valuable… and expensive.
2. It has a certain value.
3. The amount of information 1/prob.
4. It is property.
5. It always needs to be evaluated.
Information:
Evaluation
•
•
•
•
•
•
•
Who produced it?
When was it produced?
How was it produced?
How was it analyzed?
Why was it produced?
Who benefits from this information?
Why is this information available to me?
Information:
Warning signs:
• Confirms what you have always known.
• Confirms what you WANT to believe.
• Contradicts what you have always known.
• Is it GOOD THINK?
Number 5
Getting to Know the Customer
Getting to Know the Customer
How to obtain information:
1. Do marketing research…
Check out: www:cba.uni.edu/clayson/mba
for a complete outline for research
Conflicts between MR and Management
1. Personality: The bottom line is that the manager who is using research is
probably unlike the person that is producing it.
2. Research may be critical:
3. Money (expense): At times it is an expense without an explicit bottom line.
4. Time - “need it now”: Managers want information “now;” researchers want
to supply it “later.”
5. Intuition (art): Successful managers typically have successful track records.
Many have assumed that decision making is an “art,” and “art” and research may
be seen as incompatible.
6. Past - Future Orientation: Research is ultimately done on past events,
while a manager is asking for research to reduce the uncertainty about the future.
7. Pseudo Research: Researchers do not like to produce pseudo research.
Managers many times want information that will never be used for decision making
for a variety of reasons.
Managers’ Response to Research and Evolution
1. Stage of Ignorance:
2. Stage of Blind Faith:
3. Stage of Disillusionment:
4. Stage of Sophistication:
Do-It-Yourself Marketing Research
Getting to Know the Customer
How to obtain information:
1. Do marketing research…
Check out: www:cba.uni.edu/clayson/mba
for a complete outline for research
2. Start liking your customers
“My job would be great if it weren’t for the customers.”
Some consultants recommend that top managers
spend 50 percent of their time face-to-face with
actual customers.
Getting to Know the Customer
“Spending time with customers is a hundred times
more important than attending staff meetings and
reading monthly reports.”
Jeffrey Fox
Getting to Know the Customer
How to obtain information:
1. Do marketing research…
Check out: www:cba.uni.edu/clayson/mba
for a complete outline for research
2. Start liking your customers
3. Listen
“It does no good to get close to customers if you
aren’t listening.”
Jennings & Haughton
Getting to Know the Customer
How to obtain information:
1. Do marketing research…
Check out: www:cba.uni.edu/clayson/mba
for a complete outline for research
2. Start liking your customers
3. Listen
Empathy
Curiosity
Patience
Getting to Know the Customer
How to obtain information:
4. Don’t be an Info-Snob
“Do you do regular in-depth interviews with the
sales force?
Getting to Know the Customer
How to obtain information:
4. Don’t be an Info-Snob.
“Do you do regular in-depth interviews with the
people who interact with customers
(clerks, etc.)?
Coast to Coast
Everyone else is a “flyover.”
Getting to Know the Customer
“Do you do regular in-depth interviews with the
sales force?
“Do you do regular in-depth interviews with the
people who interact with customers
(clerks, etc.)?
Why Not!!
Number 7
Creating a Customer-Oriented Organization
Product Development
Don’t be product driven!
Products are the objects of a transaction.
It is the transaction, not the product, that
is important.
For example:
If it is the transaction, then
always make it very easy to do the transaction.
Always make it easy for the customer to pay you.
https://online.kitco.com/sellprice/Ordr_Faq.htm
http://www.youtube.com/watch?v=2pkzfjnGoKo
Product Development
The products come from customer
needs and/or wants.
Products should not come from:
a. What can be done
b.What developers want done
Product Development
Don’t throw products over the wall!
Destroy the Bureaucracy!!
Destroy the Bureaucracy!!
“Blow it up as fast as you can!”
Destroy the Bureaucracy!!
“Anyone found guilty of building or
perpetuating bureaucracies should
be tried on charges of management,
malpractice, found guilty, and spend
serious time in the slammer. “
Jennings & Haughton
Destroy the Bureaucracy!!
The best idea always win.
Irrespective of where, or from whom, it
comes.
Destroy the Bureaucracy!!
The best idea always win.
Reward ideas
Even when they are wrong!
Destroy the Bureaucracy!!
The best idea always win.
Reward ideas
Acknowledge people’s contributions.
Positive reinforcement works almost
every time it is tried.
All Business is Service!
“People become rich when they
make other people happy.
They become very wealthy
when they make a lot of
people happy.”
Benjamin Stein
The Importance of Management
Management
Management
Management
The Importance of Management
Management
Management
Management
Service is no better than management!!