Marketing Domains & HR

Issues
Sanjeev Varshney

Some of the Issues

Services Marketing & Relationship
Marketing
International/Global Marketing
Development of Channel Partners
B2B Marketing

Services Marketing

Definition of Services
Identifiable,
Identifiable, intangible
intangible activities
activities
that
that are
are the
the main
main object
object
of
of a
a transaction
transaction
designed
designed to
to provide
provide
want-satisfaction
want-satisfaction to
to customers
customers
Supplementary
Supplementary Services
Services
support
support the
the sales
sales
of
of a
a good
good or
or service
service

Goods-Services Continuum

Services Marketing Differs from Product Marketing

Inseparable

Intangible

Factors
Affecting
Product
Diffusion

Perishable
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Variable

Progression of Economic Value |

Commodity->Experience
Differentiate
d

Stage
Experienc
e
Deliver
Service

Competitiv
e Position

Undifferentiate
d

Make
Goods
Extract
Commoditie
s
Market

Pricing

Premium

Discussion: Where do you think do MFL brands figure in

the economic value chain?

Managing Service Quality

Quality is defined by the customer
How work was
Expectations
of the customer Compared to performed

Help
formulate
expectations

Measure
Service quality
expectation at or above
level
expectation

Service: The Gaps

Model
Service Gap

Customer
Expectation
for service
Quality

Mgmt
perceptions of
customer
expectations

Knowledge
Gap

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Standards
specifying
service to be
delivered

Standards
gap

Actual service
Delivered

Delivery
Gap

Customer
perception of
service
quality

Retailer
Communicatio
ns about
service quality

Communi
cations
Gap

Understanding
Customer Expectations

Expectations are based on knowledge and

experience
Expectations vary according to type of service
Expectations vary depending on the situation
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Consumer Satisfaction an
Overview

It is the consumers fulfillment response (complete

Consumption Experience)
Satisfaction with events that happen during
consumption
Satisfaction with final outcomes
Satisfaction with level of satisfaction received

It is a judgment that a product or service feature, or the

product or service itself, provided (or is providing) a
pleasurable level of consumption-related fulfillment,
including levels of under-or overfulfillment.

Evaluating Service
Quality

Reliability: The ability to perform the service

dependably and accurately

Responsiveness: The willingness to help

customers and provide prompt service

Assurance: The knowledge of and courtesy by

employees and their ability to convey trust and
confidence

Empathy: The caring, individualized attention

provided to customers

Tangibles: The appearance of physical facilities,

equipment, personnel and communication
materials

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Delivery Gap: Delivering Service Quality

Empowering
Employees

Reduce
Delivery Gaps

Provide
Support
& Incentives

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Use of
Technology

Service Recovery

Listening to
Customers

Increase
Service
Recovery

Providing a
Fair Solution

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Resolving
Problems
Quickly

HR issues in Services Sector

What is the crux of Customer satisfaction ?
How many to hire (capacity problem for effective and
efficient servicing) and of what quality(competencies)?
What process to follow (what is the right process to
prove good quality service?
How to standardize functioning of employees
(Benchmarking)
How to train and on what to train the employees?
How to control and check for performance and working
of employees?
Empowerment to what extent ?
Motivation and Reward

What is Relationship Marketing ?

The Shift from Transaction-Based Marketing

to Relationship Marketing

Transaction-based marketing
Buyer and Seller exchanges
characterized by limited
communications and little or no ongoing
relationship between the parties

Relationship marketing
Development and maintenance of longterm, cost-effective relationships with
individual customers, suppliers,
employees, and other partners for
mutual benefit

Comparing Transaction-Based
Marketing and Relationship
Marketing Strategies

Key to Relationship Marketing

Internal marketing
Managerial actions that help all
members of the organization understand
and accept their respective roles in
implementing a marketing strategy
Employee satisfaction

Basic Foundations of
Relationship Marketing
Making promises
Enabling Promises
Keeping Promises

The Relationship Marketing Continuum

First Level: Focus on Price

Second Level: Social
Interactions
Third Level: Interdependent
Partnerships

Three Levels of Relationship

Marketing
Characteristic

Level1

Level2

Level3

Primarybond

Financial

Social

Structural

Degreeof
customization

Low

Medium

Mediumtohigh

Potentialfor
sustained
competitive
advantage

Low

Moderate

High

Examples

AmericanAirlines Harley
FederalExpress
AAdvantage
DavidsonsHarley PowerShip
program
OwnersGroup
program
(HOG)

Building Buyer-Seller
Relationships
Many customers are seeking ways to
simplify their lives, and relationships
provide a way to do this
Customers find comfort with brands
that have become familiar through their
ongoing relationships with companies
Such relationships often lead to more
efficient decision-making by customers
and higher levels of customer
satisfaction

Relationship Marketing :
Database Marketing
Record consumer transactions and behaviour
Observe trends and classify customers into
groups
Select the best customers or groups (remember
80:20 principle)
Calculate the life time value of their business
Create a meaningful dialogue that builds a
genuine loyalty
Use this to increase share of wallet/bill
value/cross-sell and up-sell or even increase
Positive word of mouth and frequency of visit

Customer Relationship
Management
The combination of strategies and tools that
drive relationship programs, re-orientating the
entire organization to a concentrated focus on
satisfying customers
Managing Virtual Relationships
Retrieving Lost Customers

Components of CRM
Framework
Operational CRM
Involves front office customer touch points and
focuses on capturing information
Back end of this plugs into ERP systems and
supply chain management software
Analytical CRM
Works on data collected from operational CRM
to understand consumer behavior better
Involves data warehousing and data mining
Collaborative CRM
Facilitates interactions between customers and
companies and between members of the
company

Benefits of CRM
Helps to manage customer
expectations
Increasing affluence
Greater awareness
Customer diversity

Better technological advances

Reduces organizations dependence
on periodic surveys to gather data
Service Benefits of CRM: most
5% increase in do
retention
impacts as high as 95% on
customers
nothadcomplaint
the net present value delivered by customers
Repeat customers generate twice as much gross income
as new customers

THE CRM Strategy

CRM aims at integrating the front end customer
facing systems with the back-end systems
Involves top management along with all
functional areas.
Looks for customer oriented solution
Requires change management
Generally done via means of implementation
team drawn from all the functional areas.
Important to involve team motivation and
training.

CRM & Sales force

Management
Sales force
Managemen
t

CRM

Customer
managemen
t

Campaign
managemen
t

Sales Management

Scope of Sales Management

Personal Selling (industrial as well
direct)
Channel Sales Force management

Roles of a Sales Manager

Playing a strategic role

Working as a member of the corporate team
Working as a Team Leader
A supervisor and a motivator
Managing multiple sales channels
Build Buyer-seller relationships through
technology
Managing Information

Role of Sales Force

Sales Force

Brand
Management

Retailer
Shopper
(one who involves
in the act of
purchase and
buys

Consumer
(one who identifies
the need
and decides
about the product)

Shopper may or may not consume the product

Emerging Trends in Sales

Management

Global Perspective
Technology Revolution
CRM
Sales force Diversity
Team selling approach
Managing Multi-channels
Partner Relationship Management
Ethical and social issues
Sales Professionalism

Need for Change

Increase the base of the customer
and build relationships
Tap the Potential of the sales person
Improve the level of engagement of
the sales person

Operational Decisions in Sales

Management

Sales Force Recruitment

Territory Design
Target Setting
Sales force Motivation
Managing the Channel
Performance Evaluation and designing the
career path
Training and developing the sales force

Personal Selling as
Promotion
Flexible

Focused

Minimize
waste

Goal is
sale

Costly
Difficult to
attract quality
people

Personal Selling and Marketing Strategy

Can customize the

message for a specific
buyer
Assists in creating strong
supply chain
relationships
Increased customer
loyalty through
relationship selling
Gather research input
from customers
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

When Personal Selling is

Used
PRODUCT
MARKET

Value not apparent

Concentrated:

High unit cost

Geographically

Technical
Requires demonstration

In few industries

Fitted to customers need

In several

Introductory stage

large customers

of the Product Life Cycle

The Value Added by Personal Selling

Salespeople educate and

provide advice

Salespeople save time

and simplify buying

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Changing Patterns in Personal

Selling
Relationship
Selling

Internet
Selling

Telemarketing

Automation

Staffing and Operating a Sales

Force
Recruitment & Selection

Market
Potential
Estimation

Assimilation
Training

Work Load
Analysis

Motivation
Compensation

Man Power
Planning

Supervision
Performance Evaluation

Recruiting and Selecting Salespeople

Personality
Optimism
Resilience
Self-motivation
Empathy

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Training
All sales people benefit
from training about:
Selling and
negotiation
techniques
Products and service
knowledge
Technologies used in
the selling process
Time and territory
management
Company policies
and procedures

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Motivating and Compensating Salespeople

Financial rewards

Nonfinancial rewards

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Objective of compensation
components
S.No.

Componen
t

Objective

Salary

Motivate effort on non-selling

activities
Adjust for differences in territory
potential
Reward experience and
competence

Commission Motivate a high level of selling

s
effort
Encourage sales success

Bonuses

Direct effort towards Strategic

objectives
Provide additional rewards for top
performers
Encourage sales success

Sales
Contests

Stimulate additional effort

targeted at specific short term
objectives

Proportion of Salary
S.No
.

Condition

Lower

Higher

Importance of Sales persons skills

considerab
le

Slight

Reputation of sales persons company

Little
known

Well known

Companys reliance on advertising

and other sales promotion activities

little

Much

Competitive advantage of product

little

Much

Importance of providing customer

service

slight

Considerabl
e

Significance of total sales volume as a greater

primary selling objective

Lesser

Incidence of technical or team selling

little

much

Importance of factors beyond the

control of salesperson

slight

considerabl
e

Generalized Framework for

Compensation Package
Sales Response
function
(product type/
market
conditions
Sales is an
individual
activity

Sales is a group
activity

Market
development
required

No market
Development
required

High competition

50% fixed and

50% slab system

25% fixed and

75% variable

Medium
Competition

75% fixed and

25% bonus

50% fixed and

50% variable

Low Competition

Fixed

Fixed

Fixed plus
Fixed
productivity based
bonus

PLC & Compensation

Introduction: A large fixed salary plus
large variable component
Growth: A large fixed salary plus
small variable component
Maturity: A small fixed salary plus
large variable component
Decline: A large fixed component
plus very large variable component
Discuss the Issues

Caselet 1

A Company is in the business of biscuits and snacks. It has a

wide range of products and has been adding atleast 1-2 new
products each year. However, in the process sale of its oldest
and the largest selling brand xyz has stagnated. Research
reports reveal that this stagnation is due to the lost interest
of the sales man in the product and the pressure and
incentives for every new launch. This brand of the company
comprises 18% of the companies turnover and is the market
leader in the category. Therefore management has fixed
following incentive plan for its salesforce to boost the sale of
its oldest products:
For meeting the overall monthly sales targets: 0.1% of total
sales made by the salesman
For selling xyz brand more than the designated targets (this
month targets were also fixed for this brand by taking
average of the last one year): 0.2% of extra sales made for
this product over and above the average
Questions:
1. what do you expect would be the result of this incentive plan
2. What are the expected consequences
3. What is wrong with this incentive plan

Case Let 2

Suggest a Sales Incentive plan for Star Sky Ltd. A company

in the business of selling satellite TV connections. Product
is new to India. There is only one competitor in the market,
Box TV operating since last 2 years. Star Sky has been
launched only 6 months ago. Most of the market today is
dominated by Cable people. Rates being charged vary
across markets and the reception quality being given by
them is bad.
Product Costs has following components:
Set-top box charges: Rs. 3000/Installation charges: Rs. 1000/Monthly rental: Rs 300/Immediate objective of the company is market penetration
and increasing the number of such connections many fold

Evaluating Salespeople
Tied to the
reward
structure
Evaluation
measures can
be either
objective or
subjective
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Some of the Common Evaluation

Criteria
Quantitative
Sales volume
Debtors control
Territory development
New outlets
Length and breadth of goods in each outlet

Promotion/ Publicity
Market Feedback

Qualitative
Adherence to company norms, reporting etc.
Relationship with dealers
Innovativeness, sincerity and diligence

Framework for Identifying the

Evaluation Criteria
Market
Condition
(Product Life
Cycle)

Search
attributes (eg:
non durables)

Experience
attributes (eg:
durables)

Credence
attributes (eg:
Services)

Introductory

Displays
organised

Demonstration

Trials, and
number of calls

Growth Phase
(Low
competition)

New retail outlets New service

opened and Sales outlets

Number of calls

Maturity phase
(high
competition)

Market share

Customer base

Sales

7 Step Selling Process in

Retailing
1.
2.
3.
4.
5.
6.
7.

Planning and Preparation

Opening the Call
Outlet Check and Housekeeping
Persuasion and Objection Handling
Closing
Merchandizing
Administration

International Marketing

Factors Affecting International

Trade
Consumer
Preferences

Marketing
Capability

Tax Structure

Technology

Trade
Barriers

Subsidized
Industries

Strategic Planning for

International Marketing
Global
Strategy
Regional
Strategy

Local
Strategy

Structures for Operating

in Foreign Markets
Exporting
Directly, or
through
ImportExport
Middlemen

Company
Sales
Branches

Low
Involvemen
t Abroad

Licensing
Foreign
Producers

Contract
Manufactur
ing by
Foreign
producers

Joint
Ventures &
Strategic
Alliances

Wholly
Owned
Subsidiarie
s

MNCs

High
Involvemen
t Abroad

Designing the Marketing Mix

Market Research
Product
Planning
Advertising
Pricing
Distribution Systems

International Product &

Communication Strategies
Product
C
o
m
m
u
ni
c
at
io

Do Not Change
Product
Do Not Change
Straight
Communications extensions

Adapt product

Develop
New product

Product
Adaptation
Product
Invention

Adapt
Communication
Communications Adaptation

Dual
Adaptation

Organizational Issues in
International Markets
Issue of centralization versus
decentralization in terms of
marketing strategy and policies
Roles and responsibilities of sales
and marketing people working at
different level
Reporting structures
Issues of coordination and control
Localization vs. Globalization

Channel Partners
Management

Channel Partners
Management
Focus on relationship marketing
Focus on building capabilities
Focus on Value Chain

Some of the Developments

Collaborative Planning
Recruitment of sales people
Sales People Management
Performance Evaluation
Maintaining Infrastructure
Enhancing Capabilities
Managing attrition
Documentation of Process

Resource management at Partner

level
Who controls HR processes and systems
at distributor level ?
Sales force management at Distributor/
dealer level
Means of compensating distributor
sales force (In-particular minimum
guarantee clause)
Reporting structures
High attrition at distributor level

B2 B Marketing/Marketing of
Professional Services

What Business You are Into

You are in the business of
creating Value for your
customer and for your
Organization

Business in a Professional
Firm

Effective Marketing of Professional

Services
What do you Need for Effective Marketing of
Professional Services ?
Relationsh
Knowledg
ip
Reputatio
e
Competen
n
ce
Convincin
g clients
to
outsource
certain
tasks
Identifyin
g new
service
needs

People
Business:
Creation of a
personal level
Continuity of
contact
persons

Multiplicatio
n of
successful
projects
Use of the
strong
networks
between
clients

Different Level of Marketing In

Professional Firms
Contact Marketing
Credibility Marketing
Corporate Level Marketing

Knowledge Management for Better

Client Service

Technical
Knowledge

Knowledge
about
Customers

Knowledge Management for Client

Servicing
Standardisat
ion

Codification

Individualisa
tion
Options of
Strategic KM

Personalisatio
n

People to Document

KM approach

Person to Person

Explicit Knowledge

Type of
Knowledge

Implicit Knowledge

Very High

Leveraging
Knowledge

Small

Exploitation

Focus of Org.
Learning

Exploitation

Aspects in Organisational
Procurement
Multi-personality: The involvement of several
people in the selection process
Rationality: The attempt to actively generate
an objective general view by systematically
gathering information
Multi-organization: Involvement of third
organizations like banks or professionals
in the procurement decision
Interaction: Regular and intensive contact for
the exchange of information and agreement on
common and performance objectives

Rules in Organisational Procurement

High degree of insecurity in
connection with the procurement
decision has to be reduced.
The way professionals understand an
issue is also of major importance, since
it helps to offer a tailor-made approach
to tackle a specific client problem.
Close connection of the service with
the implementing professional.

Marketing Tools
First Team Activities (Seminars, publications
in professional journals and own market
research)
Second String (Networking with potential
recommenders, newsletters and voluntary
work)
Clutching on Straws (Direct Mail cold call
etc.)
Its all about reputation management
(personal and corporate)

Issues
Transference of Trust
Lack of Networking competence among staff
I have employed people who have been sent out to get those referral bases in.
Some of them can't do it. Some of them don't want to do it. Yet they are really
good at seeing clients, but they don't want to take it that step further and go out
and actively get work.

Hesitancy of Owner Managers to let go

I'm going through a period of frustration at the moment, because
on the one hand I'm the sort of person that likes to be involved
at all levels, but when you pass on responsibility and delegate to
other people, you have to let go ... I'm really delegating job
satisfaction.

Reluctance of staff in taking up networking responsibilities

Need to match staff to clients/customers

Networking
The concept of networking as an
informal, everyone-does-it, almost as a
human need that you find in all relations
and on all levels, that is the relationships
that we build on.
Networking is not always a conscious
decision it sometimes happen, 70% of the
time, subconsciously. You do network; you
network all the time. You may not do it
consciously.

Essence of Marketing

Engagement

All the Best

sanjeev varshney@xlri.ac.in