Answer from the pre-class reading only.Negative marks will be applicable for wrong answers.

Answer in one or two sentences.

Presidency Business School, QUIZ no. 5

Name : Date:

Sem: 1(MKU) Marketing Management

Two marks each What is the challenge according to

Jeffery Gitomer about customer ? What is the term used for the ‘rate at

which they lose customers’? How many steps are there to reduce

defection rate? What is the key to customer retention? Which is the company refered has

blended its external and internal marketing programs?

Answers What is the challenge according to Jeffery Gitomer

about customer ? To produce loyal customer What is the term used for the ‘rate at which they lose

customers’? Customer defection rate How many steps are there to reduce defection rate? Four What is the key to customer retention? Customer satisfaction Which is the company refered has blended its external

and internal marketing programs? L.L. Beans

Attracting and retaining customers

It is no longer enough to satisfy customers. You must delight them

Todays customers are difficult to please.

The challenge is to produce loyal customer

Attracting customers Customer acquisition requires

substantial skills in lead generation, lead qualification and account conversion

Computing the cost of lost customer

The need for customer retention The key to customer retention is

customer satisfaction. Relationship marketing:1. Basic marketing2. Reactive marketing3. Accountable marketing4. Proactive marketing5. Partnership marketing

Adding Financial BenefitsFrequency marketing programs Adding social benefits Here company personnel work on

increasing their social bonds with customers by individualising and personalising customer relationships.

Adding structural ties

Customer profitability - the ultimate

test

A profitable customer is a person household or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling and servicing that customer.

Marketing Plan What is a marketing plan ? - It is the act of putting together in a plan, the various elements of the marketing mix in a forecasted /

futuristic approach - How ,who and when of the entire marketing activity is written in the plan Elements in a plan - Mission statement – company’s end aim of business - Situation Analysis – Where are we - SWOT – Why we are here - Objectives of the plan – where do we want to be - Strategy, programme – How do we reach there - Budgets, forecast, P&L – At what cost

1. Mission Statement- Mission statement – company’s end aim of

business- Mission statements reflect a vision- Mission statement should have three

characteristics Focus on limited no. of goals Stress the major policies and values Define competitive sphere within which the

companywill operate

2. SWOT AnalysisSWOT analysis is the strengths, weaknesses , opportunitiesand threats analysis. It involves monitoring external andinternal environment factorsOpportunity and Threat are external factors, externalenvironmental issues, having a bearing on our business.A major purpose of environmental scanning is to find newopportunities.Companies can use a Market Opportunity Analysis

(MOA) todetermine the attractiveness and probability of success:

1. Can the benefits involved in the opportunity be articulatedconvincingly to a defined target market?

2. Can the target markets be located and reached with costeffective media and trade channels?

3. Does the company possess or have access to the criticalcapabilities and resources needed to deliver

4. Can the company deliver the benefits better than anyactual or potential competitor?

5. Will the financial rate of return meet or exceed thecompany’s required threshold for investment?

An environmental threat is a challenge posed by an unfavourable trend or development that would lead in the absence of defensive marketing action, to lower sales or profit. Threats should be classified according to seriousness and probability of occurrence.

Just like opportunities and threats are analysed, strengths and weaknesses should be evaluated. Clearly a business does not have to correct all its weaknesses, nor should it feel too happy over its strengths.

3. Goal Formulation / Objective settingAfter the SWOT, goals have to be set for the specified planperiod.While setting goals, care should be taken to do the

following:1. They must be arranged hierarchically, from the mostimportant to the least important.2. Objectives should be stated quantitatively as far aspossible.3. Goals should be realistic4. Objectives must be consistent.

4. Strategy Formulation / ProgrammeImplementationGoals indicate what the business wants to achieve, strategy

laysdown a long term approach path to reach there.Michael Porter , laid out three generic strategies that provide astarting point in building a strategy plan.1. Overall cost leadership2. Differentiation3. FocusOverall cost leadership means that in the industry , the firm

willachieve the best value engineering and thereby reduce cost ofproduction.

Differentiation means achieving performance in an importantcustomer benefit area valued by a large part of the market. Thefirm should be able to offer a superior differentiation comparedto competition.Focus means that the business will focus on a narrow segment.They will achieve cost leadership or differentiation within thetarget segment.Yet another area of strategy formulation is the idea of strategicalliance with another partner. Strategic alliances can take theform of marketing alliances. These fall into four categories :1. Product or service alliances one company licenses toanother to produce its products or two companies jointlymarket their complementary products or a new product.E.g., Hindustan Lever joined with Pepsico to bottle LiptonIced tea.

2. Promotional alliance is when one company agrees to carrya promotion for another company’s product or service.3. Logistics alliance is when one company offers logisticalservices for another company’s product. 4. Pricing collaborations is when one or more companies joinin a special pricing collaboration, such as airlines, hotels,car rental companies to offer attractive rates.

Programme implementation is the key to any strategyformulation. This is the stage when a holistic approach shouldbe adopted and all external and internal customers should bekept in the picture and made to realize the importance of

goodimplementation.

5. Budgets / Forecasts /P&LAny plan has to be followed with a detailed budgeting

exercise ,putting down costs, money required for the project and the

expected returns and variances expected. This should be done

for the plan period and also for the next two or three years.

Feedback and control becomes very important to do course

correction and also redraft the plan if necessary.