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MARKETING FINAL EXAM NOTES
List of Topics:7 Ps of serviceBrand Equity
Competition-based pricing (services)Consumer buyer behaviorConsumer surplusConsumerismConventional distribution channel vs vertical marketing systemCore product !upplementary services (flo"er of service)Criticisms of marketingC#$ (Customer #elationship $anagement) !trategiesCycle of failure% mediocrity% success&emand management approaches&emand $anagement !trategies
&ifferentiation !trategies&imensions of service quality&istribution channel conflictEnvironmentalismEstablishing service levels'our categories of service'our service focus strategies'ront and back stage personnelaps in service design and deliveryeneral Pricing pproachesood vs* !ervice
+igh vs* ,o" involvement productsmportant vs determinant attributes.ack /rout0s four principles of positioning$arketing communications mi1$arketing concepts$arketing Environment$arketing ntelligence$arketing $i1$arketing #esearch$arketing2&istribution channels$aslo"0s +ierarchy of 3eeds
3eeds24ants2&emands3e" product &evelopment
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LECTURE 1
MARKETING INVOLVES:
-consumers
-government
-avert!sers
-"roucers
-manu#acturers
$%AT CAN &OU MARKET'
-ever(t)!ng* +ut a!r
$%AT CAN $E CONTORL IN MARKETING'
-target mar,et
-ava!a+!!t(.su""(
-eman
-"rouct
$%ERE CAN &OU MARKET'
-!nternet
-s!e o# +uses
-stoc,s
-maga/!nes
-"osters
-T0v0
-nes"a"ers
$%AT IS MARKETING'
-conce"t!on
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-"r!c!ng
-"romot!on
-!str!+ut!on o# !eas goos an serv!ces
-to create e2c)anges t)at sat!s#( !n!v!ua
SOME E3AM4LES O5 MARKETING:
-"rouct.serv!ces
-"r!c!ng
-"romot!on
-!str!+ut!on
Conce"t o# !#e* u2ur(* cot)es* cars
LECTURE 1
Who are the experts?
Consumers
E2"osure: to messages* tact!cs* "rograms
What is marketing?
Attract!ng ne customers +( "rom!s!ng an e!ver!ng su"er!or vaue
6u!!ng ong-term reat!ons)!"s !t) customers +( e!ver!ng cont!nue customer
sat!s#act!on
Creat!ng* +u!!ng* an manag!ng t)ese reat!ons)!"s "ro#!ta+( over t!me
The Marketing Process: (fig. 1.1)
10 Unerstan t)e mar,et"ace an customer nees an ants
70 8es!gn a customer r!ven mar,et!ng strateg(
90 Construct a mar,et!ng "rogram t)at e!ver su"er!or vaue
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0 6u! "ro#!ta+( reat!ons)!"s an create customer e!g)t
;0 Ca"ture vaue #rom customers to create "ro#!ts an customers e
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C)oose t)e r!g)t segment to target
O##er a un!ect!ve v!e o# t)e o##ers vaue com"are to com"et!t!ve o##ers
Customer sat!s#act!on:
customers su+>ect!ve v!e o# t)e vaue rece!ve !n return #or t)e "urc)ase "r!ce
Customer e!g)t
Customers su+>ect!ve v!e o# t)e !ncrease vaue rece!ve a+ove t)e "urc)ase
"r!ce
Non-For-Profit Marketing
Mar,et!ng o# !eas* vaues an !nst!tut!ons
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-!ncreas!ng aareness t)at t)ese organ!/at!ons must +u! reat!ons)!"s !t)
const!tuents an sta,e)oers
-c)aenge o# us!ng ne mar,et!ng tec)n!
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-M!ss!on Statement:
Statest)e organ!/at!ons "ur"ose
Mar,et an customer-or!ente 4rov!es !rect!on to !nterna sta,e)oers
-Customers are t)e #ront-!ne
Strategic Business Unit (SBU)
- a un!t o# t)e com"an( t)at )as a se"arate m!ss!on an se"arate o+>ect!ves an
t)at can +e "anne !ne"enent( #rom ot)er com"an( +us!nesses
- can +e a com"an( !v!s!on* a "rouct !ne !t)!n a !v!s!on or somet!mes a s!nge
"rouct or +ran
The Marketing Process
ana(/e current s!tuat!on
ana(/e mar,et!ng o""ortun!t!es
seect target mar,ets
eveo" t)e mar,et!ng m!2
manage t)e mar,et!ng e##ort
6CG- Grot)-S)are Matr!2
Value Delivery Network:
10 Com"an(=s Vaue C)a!n
70 Su""!ers
90 Customers0 8!str!+utors
Num+er one goa !n mar,et!ng- Long-term "ro#!ta+e customers reat!ons)!"s
Marketing Mix:
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T)e set o# controa+e* tact!ca mar,et!ng toos t)at #!rm +ens to "rouce t)e
res"onse !t ants !n t)e target mar,et
4rouct* 4r!ce* 4romot!on* 4ace
The Four Ps and the Four Cs
4rouct provides Customer Sat!s#act!on
4r!ce represents Customer Cost
4ace provides Conven!ence
4romot!on enables 2-way Commun!cat!on
Manage the Marketing Effort
6u! strong o"erat!ona Mar,et!ng "an
Organ!/e mar,et!ng e"artment
Leverage vae c)a!n an vaue netor,
E2erc!se Contro
-Set goas
-Measure an evauat!on "er#ormance
-Ta,e correct!ve act!on
$)at !s a Mar,et!ng 4an'
Marketing Control Process
Set goasMeasure 4er#ormanceEvauate "er#ormanceTa,e correct!ve act!on
CHAPTER 13: Introduction to Services
$)( Stu( Serv!ces'
Serv!ces 8om!nate Econom( !n Most Nat!ons
Most Ne o+s are Generate +( Serv!ces
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-5astest Grot) E2"ecte !n Knoege-+ase !nustr!es
-Man( ne >o+s are $e-"a! re
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10 4rouct eements
70 4ace an t!me
90 4r!ce an ot)er user outa(s
0 4romot!on an eucat!on;0 4rocess D
0 4)(s!ca env!ronment D
0 4eo"e D
Chapter 3 Overview:
$)at !s our roe as consumers'
$)at !s our roe o# "roucers'
$)at !s t)e roe o# t)e mar,et!ng s(stem'
Socially Responsible Marketing:
-Most Cana!ans #ee t)at com"an!es are F>ust averageF !n t)e!r soc!a res"ons!+!!t(
-%a# o# consumers sa( t)e( ou not "urc)ase #rom a com"an( t)at as not soc!a(
res"ons!+e
-Cana!ans )ave )!g) e2"ectat!ons o# t)e!r com"an!es
-$)at !s t)e !##erence +eteen +e!ng res"ons!+e an soc!a( res"ons!+e mar,eters'
- #oo!ng as.soc!a( oo,!ng a#ter commun!t(
Ethics:
In (our on ors:
-- 8!##erences a+out )atFs r!g)t an rong'
-- $)at !s meant +( "ro#ess!ona et)!cs'
-- $)at !##erent!ates F!egaF #rom Funet)!caF'
Gu!e!nes."o!ces an "roceures o# )at com"an( t)!n,s !s r!g)t an rong*
usua( mae "u+!c
s)oun=t o !t* cant o !t
Criticism of Marketing:
-%!g) 4r!ces: ea to )!g)er "r!ces ue to mar,et!ng act!v!t!es
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-Unnecessar( Avert!s!ng: E20 As !n as)rooms* ema! s"am
-%!g) "ressure se!ng: e20 !m!te t!me ea
-8ece"t!ve avert!s!ng: e20 vacat!on "r!ces ?ta2es@
-Creat!ng #ase nees: e20 coogne."er#ume
ConsumerismEnvironmentalism
Consumer Protection Act: Scanner Price Accuracy Voluntary Code
-I# t)e scanne !tem !s )!g)er t)an t)e s)eve "r!ce* (ou can get !t #or #ree* u" to a H1
ma2!mum
-enorse +( t)e Com"et!t!on 6ureau
-Over ; reta!ers across Canaa are Vountar( Coe "art!c!"ants
Lecture 9
C%A4TER
Marketing Environment Defined:
T)e "rocess an #orces outs!e mar,et!ng=s !rect contro t)at a##ect mar,et!ng
management=s a+!!t( to eveo" an ma!nta!n success#u transact!ons !t) target
customers0
Microenvironment:
5actors cose to t)e com"an( t)at a##ect !ts a+!!t( to serve !ts customers
Un!
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5actors:T)e com"an(* su""!ers* mar,et!ng !nterme!ar!es* customers*
com"et!tors* "u+!cs
Microenvironment:
Larger soc!eta #orces t)at a##ect t)e m!croenv!ronment
Cons!ere to +e +e(on t)e contro o# t)e organ!/at!on
5orces: 8emogra")!c #orces* econom!c #orces* natura #orces* tec)noog!ca
#orces* "o!t!ca #orces* cutura #orces
Demographics
Mar,eters trac, c)ang!ng age an #am!( structures* geogra")!c "o"uat!on s)!#ts*
eucat!ona c)aracter!st!cs an "o"uat!on !vers!t(
Baby Boomers:
J m!!on +orn +eteen 1J-1J
Account #or one-t)!r o# "o"uat!on
%!g) amount o# !s"osa+e !ncome
No mov!ng !nto m!e-age
Economic Environment:
A t)ose #actors t)at a##ect consumer +u(!ng "oer an s"en!ng "atterns-Income eves an !str!+ut!on
-T)e necess!t(= o# "roucts
-C)anges !n trens an consumer s"en!ng
-Econom!es o# !##erent nat!ons
Cultural Environment:
T)e !nst!tut!ons an ot)er #orces )at a##ect a soc!et(=s +as!c vaues* "erce"t!ons*
"re#erence an +e)av!ors
Cutura vaues are )!g)( "ers!stent
Learne #rom #am!( an commun!t(
International Trade Issues
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Trae restr!ct!ons
-tar!##s
-
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Mar,et!ng researc) !s conucte to coect ata- +ut mar,et!ng managers muc)
transate t)at ata !n#ormat!on
Customer Reat!ons)!" Management ?CRM@ s(stems)at are t)e( an )at
o t)e( o'-Com"an( +ase s(stem manag!ng "otent!a su""!ers
CRM Example:
Net#!2* VC0com* Ama/on Lea E-Reta!ers !n Customer Sat!s#act!on
-Keogg ants to !nvest!gate !# (oung c)!ren )ave an !m"act on t)e!r "arents=
ec!s!ons to +u( +rea,#ast #oos: seconar(* casua
-Un!vers!t( 6oo,store ants to get some !ns!g)ts !nto t)e !m"act on saes I# t)e(
!ncrease "rocess +( 7B: "r!mar(* casua* surve(
-G!ette ants to eterm!ne )et)er a mar,et e2!sts #or a ne !ne o# eoorant #or
c)!ren: "r!mar(* escr!"t!ve* #ocus grou"
Im"ortant to unerstan )o cutura* soc!a* "ersona* ")(s!oog!ca #actors
a##ect "urc)ase ec!s!ons0
-Same ec!s!on-ma,!ng "rocess a""!es to cars as !t oes to co##ee
From a buyers perspective
An e2am"e o# a +us!ness +u(er ou +e a )os"!ta
$)o o (ou t)!n, +u(s t)e sca"es an t)e 2-ra( mac)!nes* )o o t)e( ec!e
)!c) ones to +u('
-Same ec!s!on-ma,!ng "rocess a""!es to cars as !t oes to co##ee
The Consumer Buyer Decision Process:
5!gure 0
Business markets and business buyer behavior
$)at #actors ou !n#uence +us!ness +u(er +e)av!or'
-5!2e "r!ce vs0 negot!at!on
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-Cas).cre!t vs0 "a(ments
8ec!s!on cr!ter!a !s "ro#ess!ona* not "ersona
-Consumers +u( !tems one at a t!me an #ocus on +ran."r!ce
-6us!ness +u(ers "urc)ase +( t)e t)ousans* #ocus on tota cost o#oners)!" an a#ter-saes serv!ce
Types of Needs:
Overa as"ects* not categor!/e
Ma!n not !n!v!uas
Maslows Hierarchy of Needs
4ersona Nees:Goas* ac)!evements* se#-sat!s#act!on.actua!/at!on
Soc!a Nees:5r!ens* 5am!(
Sa#et( Nees:5ree #rom attac,
4)(s!oog!ca Nees:S)eter* 5oo
CHAPTER 14: Consumer 6e)av!or !n a SERVICES Conte2t
4re-"urc)ase StageServ!ce Encounter Stage4ost-"urc)ase Stage
Pre-purchase Stage:
R!s,-reuct!on strateg!es t)at serv!ce su""!ers can eveo"
Serv!ce e2"ectat!ons
Nee aareness
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In#ormat!on Searc)
Evauat!on o# Aternat!ves
4urc)ase 8ec!s!on
-Evoked set:set o# "oss!+e serv!ces or +rans t)at a customer ma( cons!er !n t)eec!s!on "rocess
-t)e !##erent aternat!ves nee to +e evauate +e#ore a #!na c)o!ce !s mae
Service Attributes: Style color texture taste soundExperience Attributes: vacations sportin! events medical procedures
Credence Attributes: "uality o# repair and maintenance work
Perceived Risks:
-5unct!ona
-5!nanc!a
-Tem"ora
P4)(s!ca
-")(s!oog!ca-#ears negat!ve emot!ons
-soc!a- )o ot)ers t)!n, an act
-sensor(-unante !m"act on ; senses
$ow to %andle t%em&
-see,!ng !n#ormat!on #rom res"ecte "ersona sources
-us!ng !nternet to com"are serv!ce o##er!ngs an searc) #or !ne"enent rev!es an
rat!ngs
re"(!ng on a #!rm t)at )as a goo re"utat!on
-oo,!ng #or guarantees an arrant!es
-v!s!t!ng serv!ce #ac!!t!es or tr(!ng as"ects o# serv!ce +e#ore "urc)as!ng
-as,!ng ,noegea+e em"o(ees a+out com"et!ng serv!ces
Service Encounter Stage:
Encounters range #rom )!g) to o contact
An !ntegrat!ve "ers"ect!ve: Serv!ce #ac!!t!es* 4ersonne* Roe an scr!"t t)eor!es
707
T)e Servuct!on S(stem 5!g0 7077
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Post Purchase Stage
-Evauat!on o# serv!ce "er#ormance
-#uture !ntent!ons
Lecture
Segmentat!on* Target!ng* an 4os!t!on!ng
Unerstan t)at a mar,et* a mar,et segment* an a target mar,et are a
var!at!ons o# t)e same conce"t-a grou" o# "eo"eQ
T)!n, o# a "!e
No suc) t)!ng as a "rouct t)at !s #or ever(one
Segmentat!on eas to stereot("es
8on=t +e a#ra! to oo, +e(on "us) (ourse# +e(on s!m"( !nent!#(!ng ever(
mar,et segment accor!ng to age an gener
8on=t +e a#ra!# touse emogra")!c an "s(c)oogra")!c c)aracter!st!cs
Overv!e o# t)e 9-Ste" 4rocess
Mar,et Segmentat!on: Ient!#( +ases #or segment!ng mar,et
8eveo" "ro#!es o# resut!ng segments
Mar,et target!ng: 8eveo" measures o# segment attract!veness
Seect t)e target segments
Mar,et 4os!t!on!ng: 8eveo" "os!t!on!ng #or eac) segment
8eveo" mar,et!ng m!2 #or eac) segment
Mar,et Segmentat!on
-6ases o# segmentat!on:Geogra")!c:
Area* "o"uat!on ens!t(* c!mate* etc
8emogra")!c:
Age* se2* !#ec(ce* !ncome* >o+* etc0
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4s(c)ogra")!c:
L!#est(e* "ersona!t(
6e)av!ora:
6ene#!ts soug)t* status* usage rate* o(at(* att!tues* etc0
E2am"e: La+att=s 6eer
Segments: $atc) s"orts )o aso "a( ant !g)t +eer
E2am"e 7: &ouTu+e v!eo
Segment: Lo(at( to (our #r!en* #ocuse on gu(s
Segment!ng 6us!ness Var!a+es
Ma>or Cr!ter!a #or segment!ng +us!ness mar,et!ngs are:
-o"erat!ng c)aracter!st!cs o# t)e com"an(
-"urc)as!ng a""roac)es
-s!tuat!ona #actors
-customer s!/e
-Geogra")!c ocat!on
Segment!ng Internat!ona Mar,ets
Geogra")!c ocat!ons
Econom!cs 5actors
4o!t!ca an ega #actors
Cutura #actors ?anguage@
Evauat!ng Segments
Mar,eters must evauate t)e e##ect!veness o# t)ose segments:
Measura+!!t(
-Can +e measure
Access!+!!t(
-Can +e reac)e an serve
Su+stant!a!t(
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-"ro#!ta+e.arge enoug) to serve
8!##erent!a+!!t(
-Su+stant!a( !##erent t)an ot)er segments
Act!ona+!!t(-E##ect!ve "rograms can +e es!gne
Mass Mar,et!ng
No segments an s!nge mar,et!ng m!2
8!##erent!ate ?segment@ Mar,et!ng
Large segments !t) s"ec!#!c mar,et!ng m!2es
Concentrate ?n!c)e@ mar,et!ng
Sma segments !t) s"ec!a!/e mar,et!ng m!2es
M!cromar,et!ng
Custom!/e mar,et!ng to !n!v!uas
4os!t!on!ng
8es!gn!ng t)e com"an(=s o##er!ng an !mage #or a !st!nct!ve "ace in t%e mind o# t%etar!et market'
Success#ul Positionin!
Product position:
%o a "rouct !s v!ee +( consumers reat!ve to com"et!ng "roucts
T)ree "os!t!on!ng ste"s
Ient!#( com"et!t!ve avantages on )!c) to +u! a !##erent!ate "os!t!on
C)oose t)e r!g)t com"et!t!ve !##erent!at!on
Seect an overa "os!t!on!ng strateg(
Ga!n!ng Com"et!t!ve Avantage
Ke( to !n!ng target customers !s to unerstan t)e!r nees +etter t)an (our
com"et!tors o an to e!ver more vaue
Com"et!t!ve Avantage: e2tent to )!c) a com"an( can "os!t!on !tse# as
"rov!!ng su"er!or vaue
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Ient!#(!ng Com"et!t!ve Avantage
1. 4rouct 8!##erent!at!on ?eg0 Cons!stenc( ura+!!t(* re!a+!!t(* re"ara+!!t(@
70 Serv!ces 8!##erent!at!on ?eg0 S"ee* conven!ence* care#u e!ver(@
90 Image 8!##erent!at!on ?eg0 Conve( +ene#!ts an "os!t!on!ng@0 4eo"e 8!##erent!at!on ?eg0 %!r!ng* tra!n!ng +etter "" t)an com"et!tors@
;0 C)anne 8!##erent!at!on ?eg0 Reta! outet stores vs0 t)e !nternet@
E2am"e: Mounta!n 8e:
-Image: (ou ! o an(t)!ng (ou can to get (our )ans on or "rotect (our r!n,
s"onsor!ng to e2treme s"orts* )!g) energ(* !ve on t)e ege consumer
Success#u 8!##erent!at!on
Im"ortant- o# vaue to consumers
8!st!nct!ve- o+v!ous an cear
Su"er!or- +etter vaue t)an com"et!tors
Commun!ca+e- e2"a!na+e
4re-em"t!ve- e#ena+e an un!
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6as!c 5ocus Strateg!es #or Serv!ces
Cons!erat!ons #or us!ng t)e 5ocus Strateg!es
Market #ocused: Narro mar,et segment !t) !e range o# serv!ces
Nee to ma,e sure #!rms )ave o"erat!ona ca"a+!!t( to o an e!ver eac) o# t)e
!##erent serv!ces seecte
Nee to unerstan customer "urc)as!ng "ract!ces an "re#erencesService (ocused:
Narro range o# serv!ces to #a!r( +roa mar,et
As ne segments are ae* #!rm nees to eveo" ,noege an s,!s !n
serv!ce eac) segment)n#ocused:
6roa mar,ets !t) !e range o# serv!ces
Man( serv!ce "rov!ers #a !nto t)!s categor(
8anger- +ecome a >ac, o# a trae an master o# none
Im"ortance o# 8eterm!nant Attr!+utes
Consumers c)oose +eteen aternat!ve serv!ce o##er!ngs
8eterm!nant attr!+utes eterm!ne +u(ers= c)o!ces +eteen com"et!ng
aternat!ves
Esta+!s)!ng Serv!ce Leves an T!ers
Nee to ma,e ec!s!ons on serv!ce eves-eve o# "er#ormance #!rm "ans to o##er
on eac) attr!+ute
Segment customers accor!ng to !!ngness to trae o## "r!ce versus serv!ce
eve
Serv!ce t!er!ng: "os!t!on!ng strateg( +ase on o##er!ng server "r!ce-+ase casses
o# serv!ce conce"t
DD5our 4r!nc!"es o# 4os!t!on!ng Strateg( ACK TROUTDD
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4os!t!on!ng as a 8!agnost!c too
Unerstan reat!ons)!"s +eteen "roucts an mar,ets
Com"are to com"et!t!on on s"ec!#!c attr!+utes Evauate "rouct=s a+!!t( to meet consumer nees.e2"ectat!ons
4re!ct eman a s"ec!#!c "r!ces."er#ormance eves
Ient!#( mar,et o""ortun!t!es
Introuce ne "roucts
Rees!gn e2!st!ng "roucts
E!m!nate non-"er#orm!ng "roucts
Ma,e mar,et!ng m!2 ec!s!ons* res"on to com"et!t!on
8!str!+ut!on.serv!ce e!ver(
4r!c!ng
Commun!cat!on
DD8eveo"!ng a Mar,et 4os!t!on!ng Strateg( ?Ever(t)!ng t)at goes !nto creat!ng@
Ant!c!"at!ng Com"et!t!ve Res"onse
Com"et!tors m!g)t "ursue same mar,et "os!t!on
Get !ns!e com"et!tors )eas
Ana(/e "oss!+e e##ects o# aternat!ve com"et!t!ve moves
-!m"act o# "r!ce cut on eman* mar,et s)are* an "ro#!ts
-Res"onses o# !##erent segments to c)anges !n serv!ce attr!+utes
Us!ng "os!t!on!ng Ma"s to 4ot Com"et!t!ve Strateg(- use as a !agnost!c too* )e" (ou
ga!n avantage over com"et!tors* an see )ere (ou are0
Lecture ;
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C)a"ter : 4rouct Strateg(
$)at !s a "rouct'
A "rouct nee not +e a tang!+e goo
A "rouct !s an(t)!ng t)at t)e mar,eters mar,et0
-Cu+a
-%os"!ta Lotter!es
-4o!t!c!ans
-Serv!ces
8e#!n!ng "roucts an serv!ces
E2"er!ence: t("e o# "rouct t)at com+!nes a serv!ce or ")(s!ca "rouct !t) a
memora+e e2"er!ence
o 6!ggest !n#uence on "urc)ase o# "rouct
o 4urc)ase e2"er!ence
8escr!+e (our ast reta! "urc)ase e2"er!ence
Leves o# 4rouct
Core "rouct or +ene#!t
Actua "rouct
o 4ac,ag!ng* #eatures* es!gn*
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o 4arts* mater!as* ca"!ta !tems* su""!es
Consumer "roucts:
o Conven!ence* s)o""!ng* s"ec!at(* unsoug)t
Inustr!a.+us!ness "rouctso 4arts Mater!as
Ra an Manu#acture
o Ca"!ta Items
A! !n "rouct!on or o"erat!on
6u!!ngs* o##!ces* e
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Name* term* s!gn* s(m+o or com+!nat!on t)at !ent!#!es t)e ma,er
or seer o# "rouct.serv!ce
o 4ac,ag!ng
o La+e!ngo 4rouct su""ort serv!ces
A!t!ona serv!ces t)at e!g)ts t)e customers an (!es "ro#!ts #or
com"an(
4rouct L!ne an M!2
6ran!ng Avantages
$)at are t)e avantages o# +ran!ng'o 5or consumer
o 5or mar,eter
Serv!ce C)aracter!st!cs 5!g0 0;
Intang!+!!t(
Inse"ara+!!t(
Var!a+!!t( 4er!s)a+!!t(
6ran!ng 8ec!s!ons
A +ran !s not a ogo
A +ran !s an !ea
o Not a ")(s!ca or v!sua t)!ng !t !s an !ea
o Set o# attr!+utes an emot!ons
o Ma( +e re"resente +( o+>ects* ogos* names
o Set o# assoc!at!ons t)at e2!st !n t)e m!n o# t)e consumer
6ran E
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T)e !ea t)at a +ran )as numer!c oar vaue even t)oug) t)ere are no tang!+e
assets
C)a"ter J: 8eveo"!ng an Mar,et!ng Ne 4roucts
$)( eveo" ne "roucts'
5oo c)ang!ng mar,et!ng emans
Rema!n com"et!t!ve
Kee" u" !t) c)ang!ng tec)noog(
Re"ace (!ng "roucts
Re#res) an evove e2!st!ng "roucts
8!vers!#( "rouct o##er!ng to reuce r!s,
Ne 4rouct 8eveo"ment
Iea generat!on
Iea Screen!ng
4rouct conce"t
Mar,et!ng strateg(
6us!ness ana(s!s
4rouct eveo"ment
Test mar,et!ng
Commerc!a!/at!on
4rouct L!#e C(ce
A "roucts ! "ass t)roug) t)e 4LC
o %o ong !t ta,es +eteen stages
o %o ong !t rema!ns !n eac) stage
8eveo"ment- No customers* no "ro#!ts* )eav( s"en!ng
Introuct!on- Ear( ao"ter customers no "ro#!ts* )!g) aunc) costs
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Grot)- Ear( ma>or!t( customers* ra"! saes grot) an revenues
Matur!t(-ate ma>or!t( customers* #at saes ec!n!ng "ro#!ts
8ec!ne- aggar customers* ec!n!ng saes* re"ace +( ne "roucts
Matur!t( Stage Strateg(
Mo!#( t)e mar,et
Mo!#( t)e "rouct
Mo!#( t)e mar,et!ng m!2
Lecture
4r!c!ng Cons!erat!ons an Strateg!es
$)at !s a "r!ce'
Sum o# a t)e vaues t)at consumers e2c)ange #or t)e +ene#!ts o# )av!ng or
us!ng t)e goo or serv!ce
4r!ce vs0 Cost
Mar,eters o not ma,e ec!s!ons a+out costs* t)e( ma,e ec!s!on a+out "r!ces
8(nam!c 4r!c!ng:
T)e "ract!ce o# c)arg!ng !##erent "r!ces e"en!ng on !n!v!ua customers an
s!tuat!ons
Internet an e+-"urc)as!ng "rov!es t)e tec)noog!ca ca"a+!!t(
S!tes !,e e6a( even a t)e a+!!t( to negot!ate "r!ce to (nam!c "r!c!ng
"ract!ces
5actors
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$)atINTERNAL#actors !n#uence "r!c!ng'
-Mar,et!ng o+>ect!ves
-Mar,et!ng m!2 strateg!es
-Costs-Organ!/at!ona cons!erat!ons
EXTERNAL:
-Nature o# t)e mar,et an eman
-Com"et!t!on
-Ot)er env!ronmenta #actors ? econom(* reseers* government* soc!a concerns@
5!2e vs0 Var!a+e- &our Ca
4rouct "ac,ag!ng- *ariable
V4 o# Mar,et!ng=s saar(- 5!2e
Cost o# 9 mont) +!+oar cam"a!gn- 5!2e
Annua avert!s!ng +uget- 5!2e
Cost o# t)e "arts t)at go !nto manu#actur!ng t)e mar,eter=s "rouct- Var!a+e
4r!ce East!c!t(
A a( o# measur!ng )o sens!t!ve t)e mar,et !s to "r!ce c)anges
-Ineast!c: m!n!ma c)ange !n eman as "r!ce !ncreases
-East!c: s!gn!#!cant ro" !n eman as "r!ce !ncreases
Genera 4r!c!ng Strateg!es:
Cost-+ase a""roac)
-Cost-"us "r!c!ng
-6rea,-even ana(s!s
-Target "ro#!t "r!c!ng
Vaue-+ase a""roac)
-Consumer "erce"t!ons o# vaue
Com"et!t!on-+ase a""roac) ?most common a""roac)@
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-$)at com"et!tors are c)arg!ng
4r!c!ng !n 8!##erent Mar,ets:Pure Competition:
Man( +u(ers an seers )ere eac) )as !tte e##ect on t)e go!ng mar,et "r!ce
Monopolistic Competition:
Man( +u(ers an seers )o trae over a range o# "r!ces
E20 A!r!nes
Oligopolistic Competition:
5e seers an sens!t!ve to eac) ot)er=s "r!c!ng.mar,et!ng strateg!es
Pure Monopoly:
Mar,et cons!sts o# a s!nge seer
E20 LC6O
4r!c!ng Ne 4roucts
Mar,et!ng s,!mm!ng "r!c!ng
-%!g) "r!ce to rea" ma2!mum "ro#!t #rom ear( ao"ter segments
-Strateg( must +e su""orte +( "rouct
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O"t!ona 4rouct
-4r!c!ng o"t!ona or accessor( "roucts so !t) t)e ma!n "rouct ?eg0 Ice
ma,er !t) t)e re#r!gerator@
4rouct 6une 4r!c!ng-Com+!n!ng severa "roucts an o##er!ng t)e +une at a reuce "r!ce ?eg0
Com"uter !t) so#tare an Internet access0
Ca"t!ve-"rouct
-4r!c!ng "roucts t)at must +e use !t) t)e ma!n "rouct ?eg0
Re"acement cartr!ges #or G!ette ra/ors@
6(-"rouct "r!c!ng
-sett!ng a "r!ce #or +(-"roucts !n orer to ma,e t)e ma!n "rouct=s "r!ce more
com"et!t!ve ?eg0 Saust an +utterm!,@
8!scounts an Aoances
8!scounts:
-Cas)
-uant!t(
-Seasona
Aoances:
-Trae-In
-4romot!ona
Segmente 4r!c!ng
Se!ng a goo or serv!ce at to or more "r!ces* )ere t)e !##erence !n "r!ces !s
not +ase on !##erences !n costs
-Customer-segment
-4rouct-#orm
-Locat!on "r!c!ng
-T!me "r!c!ng
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4s(c)oog!ca 4r!c!ng
Cons!ers t)e "s(c)oog( o# "r!ces an not s!m"( t)e econom!cs
Consumers usua( "erce!ve )!g)er-"r!ce "roucts as )eav!ng )!g)er-
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4r!ce Cuts:
E2cess ca"a+!!t(
5a!ng mar,et s)are
8om!nate mar,et t)roug) oer costs4r!ce Increases:
Cost !n#at!on
Over-eman0 Cannot su""( a customers= nees
4r!ce Et)!cs
Com"et!tors:
-4r!ce-#!2!ng
-4reator( "r!c!ng
Manu#acturer an reta!er
-Reta! "r!ce an ma!ntenance
-8!scr!m!nator( "r!c!ng
Manu#acturer.reta!er an consumer
-8ece"t!ve "r!c!ng
4ann!ng an Creat!ng Serv!ces
A serv!ce "rouct com"r!ses a eements o# serv!ce "er#ormance* +ot) tang!+e
an !ntang!+e* t)at create vaue customers
T)e serv!ce conce"t !s re"resente +(:
-A core "rouct
-Accom"an!e +( su""ementar( serv!ces-#ac!!tate an en)ance use o# t)e
core "rouct an a vaue an !##erent!at!on
8es!gn!ng a Serv!ce Conce"t
Core "rouct
-Centra com"onent t)at su""!es t)e "r!nc!"a* "ro+em-sov!ng +ene#!ts
customers see,
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Su""ementar( Serv!ces
-Augment t)e core "rouct* #ac!!tat!ng !ts use an en)anc!ng !ts vaue an
a""ea
8e!ver( 4rocesses-Use to e!ver +ot) t)e core "rouct an eac) o# t)e su""ementar(
serv!ces
Core an Su""ementar( Serv!ces at Lu2ur( %ote
Reservat!on
Vaet "ar,!ng
Rece"t!on
6aggage serv!ce
Coc,ta! +ar
Restaurant
Enterta!nment.s"orts.e2erc!se
Internet
$a,e-u" ca
Room Serv!ce
6us!ness Centre
Cas)!er
T)e 5oer o# Serv!ce
- Nee to ,no t)!s !,e !ts go!ng out o# st(e
%o to 8eterm!ne $)at Su""ementar( Serv!ces S)ou +e O##ere
Mar,et "os!t!on!ng strateg( eterm!nes )!c) su""ementar( serv!ces s)ou +e
!ncue
5!rms !t) !##erent eves o# serv!ce o#ten a e2tra su""ementar( serv!ces #or
eac) u"grae !n serv!ce eve
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Manager!a Im"!cat!ons
To eveo" "rouct "o!c( an "r!c!ng strateg(* managers nee to eterm!ne:
$)!c) su""ementar( serv!ces s)ou +e o##ere as a stanar "ac,age or as
#ee +ase o"t!ons 5!rms t)at com"ete on a o-cost* no-#r!s +as!s nees #eer su""ementar(
eements t)an t)ose mar,et!ng e2"ens!ve* )!g)-vaue-ae serv!ces
Sett!ng 4r!ces an Im"ement!ng Revenue Management
%arer to cacuate #!nanc!a costs t)an a manu#acture goo
8!##!cut( !n e#!n!ng a un!t o# serv!ce
Serv!ces )ar to evauate
Customers ma( +e "re"are to "a( more #or #aster e!ver(
8e!ver( t)roug) ")(s!ca or eectron!c c)annes-ma( create !##erences !n
"erce!ve vaue
T)e 4r!c!ng Tr!"o
4r!c!ng Strateg(
Costs Com"et!t!on Vaue to Customer
Cost-+ase 4r!c!ng:
Tra!t!ona vs0 Act!v!t(-6ase Cost!ng
Tra!t!ona Cost!ng A""roac)
-La+or an !n#rastructure costs are cons!ere #!2e costs
Act!v!t(-+ase cost!ng ?A6C@
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-Sets o# e!ver( act!v!t!es an reate goos
-5!rms can "!n"o!nt "ro#!ta+!!t( o# !##erent serv!ces* c)annes etc0
%o o (ou Reuce 4r!ce Com"et!t!on' Outsourc!ng
Non-"r!ce reate costs o# us!ng com"et!ng aternat!ves are )!g)
4ersona reat!ons)!"s mater
S!tc)!ng costs are )!g)
T!me an ocat!on s"ec!#!c!t(
Net Vaue: 4erce!ve +ene#!ts to customer ?Gross vaue- A 4erce!ve outa(s
?Mone(* T!me* Menta.4)(s!ca E##ort@
4r!c!ng Issues:
4utt!ng Strateg( !nto 4ract!ce
%o muc) to c)arge'
$)at +as!s #or "r!c!ng'
$)o s)ou coect "a(ment'
$)ere s)ou "a(ment +e mae'
$)en s)ou "a(ment +e mae'
%o s)ou "a(ment +e mae'
%o to commun!cate "r!ces'
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Lecture
C)a"ters 11* 17* 1
Im"!cat!ons o# !ntang!+!!t( !n serv!ce "er#ormances
Customers are !nvove !n "rouct!on
Roe o# customer-contact "ersonne
8!##!cut( o# evauat!ng man( serv!ces
Nee to +r!ng su""( an eman !nto +aance
Overcom!ng 4ro+ems o# Intang!+!!t(
Ma( +e !##!cut to commun!cate serv!ce +ene#!ts to customers es"ec!a( )en
!ntang!+e
Intang!+!!t( creates "ro+ems
Genera!t( W !tems t)at com"r!se a cass o# o+>ects* "ersons* or events
Non-searc) a+!!t( W cannot +e searc)e or !ns"ecte !t) ")(s!ca o+>ects
A+stractness W no one-to-one corres"onence !t) ")(s!ca o+>ects
Menta !m"a"a+!!t( W Customers #!n !t )ar to gras" +ene#!ts o# com"e2*
mut!!mens!ona ne o##er!ngs
Avert!s!ng Strateg!es #or Overcom!ng Intang!+!!t( W !n te2t
Accenture 4romotes A+!!t( to Turn Innovat!ve !eas !nto resuts : a as use t)!s
8%L: "romot!ng t)e e##!c!enc( o# !ts !m"ort e2"ress serv!ce
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5ac!!tate Customer Invovement
$)en customers are act!ve( !nvove !n serv!ce "rouct!on* t)e( nee tra!n!ng to
"er#orm
S)o serv!ce e!ver( !n act!on
Teev!s!on an v!eos engage v!eer
-ent!sts s)o!ng "at!ents v!eos o# surg!ca "roceures +e#ore surger(
Stream!ng v!eos on $e+ an "ocasts are ne c)annes to reac) act!ve
customers
Avert!s!ng an "u+!c!t( can ma,e customers aare o# c)anges !n serv!ce
#eatures an e!ver( s(stems !n +7+ an +7c conte2ts
Saes "romot!ons to )e" c)ange customer +e)av!our
- o##er !ncent!ves to ma,e necessar( c)anges
-4r!ce !scounts to encourage se#-serv!ce on an ongo!ng +as!s
%e" Customers to Evauate Serv!ce O##er!ngs
Customers ma( )ave !##!cut( !st!ngu!s)!ng one #!rm #rom anot)er
-"rov!e tang!+e cues reate to serv!ce "er#ormance
Some "er#ormance attr!+utes en t)emseves +etter to avert!s!ng t)an ot)ers
-A!r!nes- +oast a+out "unctua!t(
-8o not ta, overt( !n avert!s!ng a+out sa#et(* am!ss!on t)at t)!ngs m!g)t go
rong ma,e "ros"ect!ve traveers nervous
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-Use !n!rect a""roac): "romote "!ot e2"ert!se* mec)an!c=s* ma!ntenance s,!s*
neness o# a!rcra#t
5!rm=s e2"ert!se !s )!en !n o-contact serv!ce
- nee to !ustrate e
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T)roug) mar,et!ng C)annes W Tra!t!ona toos o# "ersona se!ng* account
management "rograms* trae s)os* avert!s!ng* !rect mar,et!ng* saes
"romot!on* "u+!c reat!ons
Message Transm!ss!on ?7@ W rea !n te2t
T)roug) messages or!g!nat!ng outs!e t)e Organ!/at!on W ver( !n#uent!a an "oer#u
- $or o# Mout) ?$OM@ W more cre!+e t)an #!rm=s messag!ng0 Customers re( on !t
)en ma,!ng )!g) r!s, ec!s!ons
-6ogs W on !ne >ournas )ere "eo"e can "ost t)e!r "o!nt o# v!e* +oggers can
+ecome e #actor atc) ogs* !n,s ena+e !n#ormat!on s)ar!ng
-E!tor!a Coverage We!tor!a coverage a+out a com"an( !n!t!ate +( +roacasters an
"u+!s)ers
Strateg!es #or Cor"orate 8es!gn
Man( serv!ce #!rms em"o( a un!#!e an !st!nct!ve v!sua a""earance #or a
tang!+e eements to re!n#orce t)e +ran
-#or e2am"e* ogos* un!#orms* ")(s!ca #ac!!t!es
4rov!e a recogn!/a+e t)eme !n,!ng a t)e #!rm=s o"erat!ons
Use o# traemar,e s(m+o as "r!mar( ogo* !t) name seconar(
-S)e=s (eo scao" s)e on a re +ac,groun
-Mac8ona=s Goen Arc)es
Mar,et!ng or 8!str!+ut!on C)anne
A set o# !ntere"enent organ!/at!ons !nvove !n t)e "rocess o# ma,!ng a "rouct or
serv!ce ava!a+e #or use or consum"t!on +( t)e consumer or +us!ness user0 ?seete2t@
$)oesaers.Reta!ers
$)oesaers
-Merc)ant )oesaers
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-Agents an +ro,ers
-Manu#acturer=s saes +ranc)es an o##!ces
Reta!ers
-Amount o# serv!ce
-"rouct t!me
-reat!ve "r!ces
-reta! organ!/at!on
?unerstan t)e !##erence +eteen )oesaers an reta!ers@
$)at !s reta!!ng'
Reta!!ng !ncues a t)e act!v!t!es !nvove !n se!ng "roucts or serv!ces !rect( to
#!na consumers #or t)e!r "ersona* non-+us!ness use0
Amount o# Serv!ce ?NEE8 TO KNO$@
Se#-serv!ce reta!ers: Serv!ce customers )o are !!ng to "er#orm t)e!r on
ocate-com"are-seect "rocess to save mone(
L!m!te-serv!ce reta!ers: "rov!e more saes ass!stance +ecause t)e( carr( more
s)o""!ng goos a+out )!c) customers nee !n#ormat!on
5u-serv!ce reta!ers: usua( carr( more s"ec!at( goos #or )!c) customers !,e to
+e a!te on
Convent!ona vs0 Vert!ca
Convent!ona Mar,et!ng C)anne
manu#acturer
$)oesaer
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Reta!er
Consumer
Vert!ca Mar,et!ng S(stemManu#acturer
$)oesaer
Reta!er
Consumer
Vert!ca mar,et!ng S(stem
A !str!+ut!on c)anne structure !n )!c) "roceures* )oesaers an reta!ers act as
a un!#!e s(stem
One c)anne mem+er ons t)e ot)er* )as contracts !t) t)em or )as so muc)
"oer t)at t)e( a coo"erate0
C)anne Con#!ct
8!sagreement +eteen mem+ers over goas
%or!/onta Con#!ct
-con#!ct +eteen #!rms on t)e same eve
Vert!ca con#!ct
-con#!ct +eteen #!rms on !##erent eves
8!s!nterme!at!on
-!s"acement o# a tra!t!ona mem+er #rom t)e mar,et!ng c)anne-se!ng !rect v!a t)e !nternet
5ranc)!se Organ!/at!on
Manu#acturer W s"onsore )oesaer #ranc)!se s(stem0
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8!s!nterme!at!on
6("ass!ng !nterme!ar!es an go!ng !rect( to #!na +u(ers
Ra!ca( ne t("es o# c)anne !nterme!ar!es t)at com"ete !t) or !s"ace
tra!t!ona ones
Internet an e-commerce are t)e most common cause o# !s!nterme!at!on
Num+er o# Interme!ar!es
Intens!ve !str!+ut!on
-as man( !str!+utors as "oss!+e
E2cus!ve !str!+ut!on
-on( one !str!+utor !n a g!ven terr!tor(
Seect !str!+ut!on
-A seect #e !str!+utors !n a g!ven terr!tor(
Log!st!cs an Su""( C)a!n
4ann!ng* !m"ement!ng an contro!ng t)e ")(s!ca #o o# goos* serv!ces an
reate !n#ormat!on #rom "o!nts o# or!g!n to "o!nts o# consum"t!on to meet customer
re
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a+!!t( to "rom"t !mme!ate cas to act!on0
Saes 4romot!on
Cou"ons* contests* "rem!ums* an !ncent!ves0 Use to attract attent!on0
4rov!e !ncent!ve #or tr!a or "urc)ase0
Generates resuts no versus ater0
E##ect!veness eas!er to trac, t)an avert!s!ng0
Ma( etract #rom +ran eect!ves
Consumer: !ncrease s)ort-term saes or )e" +u! ong-term mar,et s)are0
Trae: get reta!ers to:
-Carr( ne !tems an more !nventor(0
-avert!se "roucts0
-g!ve "roucts more s)e# s"ace0
-+u( a)ea0
4ersona Se!ng 4ersona* #e2!+e* to-a( commun!cat!on* "rov!es !rect #ee+ac,0
6u!s "re#erence* conv!ct!on* act!on0
Su!te to com"e2* )!g)er "r!ce "roucts0
6as!s #or +u!!ng a +u(er reat!ons)!"0
Reust >un, ma!Q
Mar,eters must ma,e a t)ousan ec!s!ons to e2ecute a 8M cam"a!gn
-$)o to sen !t to
-ata+ase
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8!rect Ma! Mar,et!ng W T("e o# 8!rect Res"onse
Invoves sen!ng an o##er* announcement* rem!ner or ot)er !tem to a "erson at a
"art!cuar aress0 4erm!ts )!g) target-mar,et seect!v!t(0
4ersona an #e2!+e0
Eas( to measure resuts0
4u+!c Reat!ons
4u+!c reat!ons !nvoves +u!!ng goo reat!ons !t) t)e com"an(=s var!ous "u+!cs
+( o+ta!n!ng #avora+e "u+!c!t(* +u!!ng u" a goo cor"orate !mage an )an!ng
or )ea!ng o## un#avora+e rumors* stor!es an events0
Cannot +e "urc)ase - c)aeng!ngQ
8!rect( o""os!te to avert!s!ng W >ourna!sts cannot +e "a!0
Nes stor!es* #eatures* "ress con#erences* annua re"orts* cor"orate e+s!te0
Seen as more +e!eva+e t)an avert!s!ng messages0
More cost e##!c!ent0
Can +e !##!cut to contro0
Can +e "roact!ve an react!ve0
4u+!c Reat!ons Toos
Nes0
S"eec)es0
S"ec!a events0
6u// mar,et!ng0
Mo+!e mar,et!ng0
$r!tten mater!as0
Au!ov!sua mater!as0
Cor"orate !ent!t( mater!as0
4u+!c serv!ce act!v!t!es0
Com"an( e+s!te0
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Lecture :
C)a"ters: 1J* 7* 79
5our Categor!es o# Serv!ces
8e!ver( o# a 4ossess!on-4rocess!ng Serv!ce ?5!g0 07a-@
4eo"e-4rocess!ng ?5!g0 07a@
Menta St!muus ?5!g0 07 c@
In#ormat!on 4rocess!ng ?5!g0 07 @
6ue 4r!nt!ngDeveloping a Blueprint:
Ient!#( ,e( act!v!t!es !n creat!ng an e!ver!ng serv!ce
8e#!ne +!g "!cture +e#ore r!!ng on to o+ta!n a )!g)er eve o# eta!
Advantages of Blue printing:
8!st!ngu!s) +eteen #rontstage an +ac,stage
Car!#( !nteract!ons +eteen customers an sta##* an su""ort +( +ac,stage
act!v!t!es an s(stems
Ient!#( "otent!a #a! "o!ntsX ta,e "reventat!ve measuresX "re"are cont!ngenc(
4!n"o!nt stages !n t)e "rocess )ere customer common( )ave to a!t
6ue"r!nt!ng T)e Restaurant E2"er!ence: A T)ree-Act 4er#ormance
Act 1:Introuctor( Scenes
Act 2:8e!ver( o# Core 4rouct
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Coc,ta!s* seat!ng* orer #oo an !ne* !ne serv!ces
4otent!a #a! "o!nts: menu !n#ormat!on com"ete' Menu !nte!g!+e'
M!sta,es !n transm!tt!ng !n#ormat!on a common cause o#
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#s'cho!oica! Factors Re!ated to the use of SSTsAd"antaes:
Ti%e sa"ins +ost Sa"ins
F!e(i&i!it' +on"enience of !ocations Greater contro! o"er ser"ice de!i"er' ,ih percei"ed !e"e! of custo%i-ation
.isad"antaes: An(iet' and stress e(perienced &' custo%ers /ho are unco%forta&!e /it
h usin the% So%e see ser"ice encounters as socia! e(periences and prefer to dea! /ith
peop!e
Nature of Ser"ices Ser"ices cannot &e stoc0pi!ed This is pro&!e%atic for peop!e or ph'sica! possession ser"ices due to
/ide s/ins in de%and Goa! is to uti!i-e staff1 e*uip%ent1 and faci!ities as producti"it' as
possi&!e
Fro% E(cess .e%and to E(cess +apacit' E(cess .e%andToo %uch de%and re!ati"e to capacit' at a i"en ti%e
.e%and e(ceeds opti%u% capacit'
Upper !i%it to a fir%2s a&i!it' to %eet de%and at a i"en ti%e Opti%u% +apacit'#oint &e'ond /hich ser"ice *ua!it' dec!ines as %ore custo%ers areser"iced
E(cess +apacit'Too %uch capacit' re!ati"e to de%and at a i"en ti%e
Addressin the #ro&!e% of +hanin .e%andTwo Basic Approaches:
Ad3ust !e"e! of capacit'
Manae !e"e! of de%and
,o/ to .eter%ine .e%and #atterns Understand /h' custo%ers fro% specific %ar0et se%ents se!ect this
ser"ice Keep ood records of transactions to ana!'-e de%and patternsSophisticated soft/are can he!p to trac0 custo%er consu%ptionpatterns
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Record /eather conditions and other specia! factors that %iht inf!uencede%and
A!ternati"e .e%and4Manae%ent Strateies /ake no action
Let custo%ers sort it out #educe demand,iher prices+o%%unication pro%otin a!ternati"e ti%es
ncrease demandLo/er prices+o%%unication1 inc!udin pro%otiona! incenti"es5ar' product features to increase desira&i!it'More con"enient de!i"er' ti%es and p!aces
nventory demand by reservation system nventory demand by formali5ed queuing
Infor%ation Need for .e%and and +apacit' Manae%ent Strateies ,istorica! data on de%and !e"e! and co%position1 notin responses to
%ar0etin "aria&!es .e%and forecasts &' se%ent under specified conditions Se%ent4&'4se%ent data Fi(ed and "aria&!e cost data1 profita&i!it' of incre%ented sa!es Meaninfu! !ocation4&'4!ocation de%and "ariations +usto%er attitudes to/ard *ueuin:Linin up4/hen it is accepta&!e6 Pg* 677
+usto%er opinions of *ua!it' at different !e"e!s of capacit' uti!i-ation: e(7,ote!s8air tra"e!8retai! ser"ice
9hat is Ser"ice6.ifferent #erspecti"es of Ser"ice ua!it'Transcendent:
ua!it';E(ce!!ence Reconi-ed on throuh e(periences
Manufacturing-based: ua!it' is n confor%ance to the fir%2s de"e!oped specifications
User-based: ua!it' !ies in the e'es of the &eho!der
Value-based: ua!it' is a trade4off &et/een price and "a!ue
.i%ensions of Ser"ice ua!it'Tani&!es: Appearance of ph'sica! e!e%entsRe!ia&i!it': .ependa&!e and accurate perfor%ance
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Responsi"eness: #ro%ptness) he!pfu!nessAssurance: +o%petence1 courtes'1 credi&i!it'1 securit'E%path': Eas' access1 ood co%%unication1 understandin of custo%er
Se"en Ser"ice ua!it' GapsFi7
1. Knowledge ap:.ifference &et/een e(pectations and needs2. !tandards ap:Specif' S standards that ref!ect e(pectationsTrans!ation into desin8de!i"er' specs3. "eliver# ap:Ensure ser"ice perfor%ance %eets standardsE(ecution of desin8de!i"er' specs4. $nternal %ommunications ap: Ensure that co%%unications pro%ises
are rea!istic5. &erceptions ap: Educate custo%ers to see rea!it' of ser"ice *ua!it'
de!i"ered+usto%er perceptions of ser"ice e(ecution6. $nterpretation ap:#retest co%%unications to %a0e sure %essae is
c!ear and una%&iuous7. !ervice ap:+!ose aps > to ? to %eet custo%er e(pectations
consistent!'
Soft and ,ard Measures of Ser"ice ua!it' !oft measures-not easi!' o&ser"ed1 %ust &e co!!ected &' ta!0in to
custo%ers1 e%p!o'ees or others#ro"ide direction1 uidance and feed&ac0 to e%p!o'ees on /a's to
achie"e custo%er satisfaction+an &e *uantified &' %easurin custo%er perceptions and &e!iefse7 SER5UAL1 sur"e's1 and custo%er ad"isor' pane!s
'ard measures4 can &e counted1 ti%ed1 or %easured throuh auditsT'pica!!' operationa! processes or outco%esStandards often set /ith reference to percentae of occasions on/hich a particu!ar %easure is achie"ed7
+usto%er feed&ac0 +o!!ection Too!s Tota! %ar0et sur"e's Annua! sur"e's Transactiona! sur"e's Ser"ice feed&ac0 cards M'ster' shoppin Unso!icited custo%er feed&ac0 Focus roup discussions Ser"ice re"ie/s
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Ana!'sis1 Reportin and .isse%ination of +usto%er Feed&ac0 +hoosin the re!e"ant feed&ac0 too!s and co!!ectin custo%er feed&ac0 is
%eanin!ess If the infor%ation is not passed &ac0 to the re!e"ant partiesto ta0e action
Reportin s'ste% needs to de!i"er feed&ac0 to front!ine staff1 processo/ners1 &ranch8depart%ent %anaers and top %anae%ent
Three t'pes of perfor%ance reports:Month!' Ser"ice #erfor%ance Updateuarter!' Ser"ice #erfor%ance Re"ie/Annua! Ser"ice #erfor%ance Repot
Too!s to Ana!'-e and Address Ser"ice ua!it' #ro&!e%s Fish&one diara%+ause4and4effect diara% to identif' potentia! causes of pro&!e%s
#areto +hartSeparatin the tri"ia! fro% the i%portant7 Often1 a %a3orit' of pro&!e%s
is causes &' a %inorit' of causes @ie7 The B8D7>BCAna!'sis of +auses of F!iht .eparture .e!a's @Fi7 >D7>>C
Ser"ice Efficienc'1 #roducti"it' and Effecti"eness Efficienc': in"o!"es co%parison to a standard1 usua!!' ti%e4&ased @e7
ho/ !on e%p!o'ee ta0es to perfor% specific tas0C #roducti"it': in"o!"es financia! "a!ue of outputs to inputs Effecti"eness: deree to /hich fir% %eets oa!s
Generic #roducti"it' I%pro"e%ent StrateiesT#pical strategies to improve service productivit#:
+arefu! contro! of costs at e"er' step in process Efforts to reduce /astefu! use of %ateria!s or !a&or
Matchin producti"e capacit' to a"erae rather than pea0 de%and !e"e!s Rep!acin /or0ers &' auto%ated %achines or se!f4ser"ice techno!oies Teachin e%p!o'ees ho/ to /or0 %ore producti"e!' $roadenin "ariet' of tas0s that ser"ice /or0er can perfor% Insta!!in e(pert s'ste%s that s!o/ paraprofessiona!s to ta0e on /or0
pre"ious!' perfor%ed &' professiona!s /ho earn hiher sa!ariesAlthough improving productivit# can be approached incrementall#( ma)orgains often re*uire redesigning entire processes
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+usto%er4.ri"en 9a's to I%pro"e #roducti"it' Change timing of customer demand$' shiftin de%and a/a' fro% pea0s1 %anaers can %a0e &etter useof fir%2s producti"e assets and pro"ide &etter ser"ice
nvolve customers more in productionGet custo%ers to se!f4ser"eEncourae custo%ers to o&tain infor%ation and &u' fro% fir%2scorporate /e&sites
sk customers to use third parties.e!eate de!i"er' of supp!e%entar' ser"ice e!e%ents to inter%ediar'orani-ations
Evaluating Advertising
Ut!mate test !s )et)er saes )ave !ncrease0
Measure +e#ore an a#ter an a cam"a!gn to measure resuts0
On!ne avert!s!ng t)e eas!est to measure +ase on convers!on rates an t)e
a+!!t( to "rom"t !mme!ate cas to act!on0
Sales Promotion
Cou"ons* contests* "rem!ums* an !ncent!ves0
Use to attract attent!on0
4rov!e !ncent!ve #or tr!a or "urc)ase0
Generates resuts no versus ater0
E##ect!veness eas!er to trac, t)an avert!s!ng0
Ma( etract #rom +ran e
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4ersona* #e2!+e* to-a( commun!cat!on* "rov!es !rect #ee+ac,0
6u!s "re#erence* conv!ct!on* act!on0
Su!te to com"e2* )!g)er "r!ce "roucts0
6as!s #or +u!!ng a +u(er reat!ons)!"0 Reourna!sts cannot +e "a!0
Nes stor!es* #eatures* "ress con#erences* annua re"orts*cor"orate e+s!te0
Seen as more +e!eva+e t)an avert!s!ng messages0 More cost e##!c!ent0
Can +e !##!cut to contro0
Can +e "roact!ve an react!ve0
Public Relations Tools
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Nes0
S"eec)es0
S"ec!a events0
6u// mar,et!ng0 Mo+!e mar,et!ng0
$r!tten mater!as0
Au!ov!sua mater!as0
Cor"orate !ent!t(mater!as0
4u+!c serv!ce act!v!t!es0
Com"an( e+s!te0
Lecture J
C)a"ters: 71* 77
Serv!ce Sta##
Cruc!a( !m"ortant to t)e success o# a serv!ce #!rm
-Most v!s!+e
-Re"resents com"an( an e!vers +ran "rom!se
-Serv!ce sta##Y +ran
Instea o# a +ran manager- "eo"e manager
-Ga!n a com"et!t!ve avantage
-%e" ensure susta!na+!!t( !n t)e mar,et"ace
Understand that the wor+ of service staff can be demanding( challengingand difficult,
,iher perfor%in1 satisfied e%p!o'ees are 0e'
Front4!ine /or0 can &e de%andin @&oundar' spannersC Often ha"e conf!ictin ro!es E%otiona! !a&or
%onflict comes from sources: #erson8ro!e conf!icts
4$et/een 3o& re*uire%ents1 and o/n persona!it' Orani-ation8c!ient conf!icts
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4Fo!!o/ co%pan' ru!es or satisf' custo%er Inter4c!ient conf!icts
4+!ient to c!ient conf!ict EXAM#LES6
++LE OF FAILURE4 the search for producti"it'++LE OF ME.I+RIT4 no incenti"e to i%pro"e4e%p!o'ees unresponsi"e4increased pa' the !oner 'ou are there4ta0in initiati"e1 %a0in decisions1 pro"idin insiht is discouraed4hih 3o& securit'4e%phasis on ru!es4not satisfied /ith 3o&++LE OF SU++ESS4happ' e%p!o'ees1 /ho!e c'c!e is positi"e4&ier 3o& desins
4e%p!o'ees satisfied
9hat are the 0e' &arriers for fir%s see0in to &rea0 the c'c!e of fai!ure and%o"e in to the c'c!e of success6
Short sihted %anae%ent Lo/ %arins Forced efficienc' @9a!4MartC
The &est candidates O&ser"e &eha"ior
4Inter"ie/s1 e(ercises +onduct #ersona!it' tests
4.oes persona!it' %atch the 3o&6 Mu!tip!e1 structured inter"ie/s
4.ifferent inter"ie/ers Rea!istic 3o& pre"ie/
4E(pectations %uch %atch 3o& offerin
Other aspects of ,R Train ser"ice e%p!o'ees acti"e!' E%po/er the front !ine $ui!d hih perfor%ance ser"ice de!i"er' tea%s Moti"ate and eneri-e peop!e
The Ser"ice Ta!ent +'c!e for Ser"ice Fir%s in te(t>7 ,ire the riht peop!e
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+usto%er 5a!ue The !oner a custo%er sta's /ith a fir%1 the %ore profita&!e that
custo%er is to ser"e:4increased usae o"er ti%e
4reduced operatin costs4profits fro% referra!s and price pre%iu%
9h' is +usto%er Lo'a!t' I%portant to A Fir%2s #rofita&i!it'6+usto%ers &eco%e %ore profita&!e the !oner the' re%ain /ith a fir%:
Increase purchases and8or account &a!ances4+usto%ers8 fa%i!ies purchase in reater *uantities as the' ro/
Reduced operatin costs4,e/er de%ands fro% supp!iers and operatin %ista0es as custo%er&eco%es e(perienced
Referra!s to other custo%ers4#ositi"e /ord4of4%outh sa"es fir% fro% in"estin %one' in sa!es andad"ertisin
#rice pre%iu%s4!on4ter% custo%ers /i!!in to pa' reu!ar price4/i!!in to pa' hiher price durin pea0 periods
The .heel of /o#alt# 0ig 1123
Effecti"e Tierin of Ser"ice: The +usto%er #'ra%id
9hat /ou!d 'ou do64,o/ /ou!d OU create !o'a!t' in the ser"ice industr'6 Restaurants Air!ines $an0in +redit +ards E!ectrician
!trategies for "eveloping lo#alt# Bonds with %ustomers 44in te5t44
+o%%on O&3ecti"es of +RM S'ste%s
@Ser"ice #erspecti"esC .ata co!!ection .ata ana!'sis Sa!es force auto%ation Mar0etin auto%ation +a!! centre auto%ation
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+o%prehensi"e +RM Strate' in te(t
+o%%on Fai!ures in +RMI%p!e%entation @part > of