Profitable Customer Relationship II Flashcards
what are the 5 concepts which an organisation can adopt to design & carry out their marketing strategies
1) production concept
2) product concept
3) selling concept
4) marketing concept
5) societal marketing concept
which 3 concept is the inside approach
1) production concept
2) product concept
3) selling concept
(Old School from the 30s. From Company’s Perspective - Assumptions)
which 2 concept is the outside-in approach
4) marketing concept
5) societal marketing concept
(From Customer Perspective, Needs & Wants Satisfaction)
what is the inside-out approach
❖Companies don’t do Consumer Research. They base it on the situation they see, what they know or think they know, what they think is right, and what they think is Best for their products and brand and do it.
❖The Concept of Needs & Wants Do Not Exist for the first 3 Orientations – From the 1920s to the 1950s
❖The companies can adopt this cos there was not much Competition or Choice in those days.
what is the production concept
- The key questions that a firm would ask before
producing a product were:
➢Can we produce the product?
➢Can we produce enough of it? - ASSUMPTION: Companies believe that Consumers will only favour products that are easily available everywhere, and highly affordable
under the production concept what did company focus on
(1) Improving production and distribution efficiency;
(2) Making Products Cheap
what are the 2 situations under the production concept
SITUATION 1
❖Demand EXCEEDS Supply
❖Mgmt look for ways to up the
production
SITUATION 2
❖ Cost of Product is too high
❖ Improved productivity is needed
to bring it down
what is the product concept
ASSUMPTION: Companies believe that Consumers only favour products that offer the most in quality, performance, and innovative features.
Therefore, companies focus on making continuous product improvements, but ONLY FROM
COMPANY’S PERSPECTIVE. NO Consumer Studies Done. What the Boss thinks is good, he’ll Improve on and produce those things.
what is the selling concept
ASSUMPTION: Companies believe that Consumers will not buy enough unless there are 2 Things: (1) Hard Selling (Focus on Cornering Customers to Buy) & (2) Sales
Promotions like Discounts/Gifts etc
Therefore, companies focus on creating sales
transactions rather than building relationships
what are the 2 situations in the selling concept
situation 1
* Traditionally associated with certain products (like Insurance / Time-Sharing Holiday Investments / Go Tour Gps where they bring you to buy Herbs or Jade or Beauty Products etc)
situation 2
* When faced with overcapacity.
what is the outside-in approach
❖Companies do Consumer Research. They base it What they have found out, the Likes & Dislikes and Needs & Wants of Customers before they Produce and Make the Product.
❖The Aim is to be able to SATISFY the Customers’ Needs and Wants and in so doing, make money from them.
❖Started from late 1950s onwards. Realised with More Brands and Competition, cannot keep doing the old ways.
what is the marketing concept
To achieve organisation goals, must focus on knowing the needs, and wants of target markets, and delivering desired satisfaction better than competitors.
what is the societal marketing concept
Company should also consider the society’s long run
interests, in addition to considering consumers’ wants,
and its own objectives.
example of using both inside-out and outside-in strategy
Eg. Insurance still does Hard-Sell & Perks ( Selling Concept) but also seek to be customers’ friend now and also to understand their needs & wants and satisfy them through customisation (Marketing Concept).
Shampoo brands seek to understand what customers need and want by
producing different types of shampoos according to those needs & wants (Marketing Concept), but will also try to be as Productive and set Not too
high costs and distribute widely as possible (Production Concept)
what is customer relationship management
Customer relationship
management is the overall
process of building and
maintaining profitable
customer relationships by
delivering superior customer
value and satisfaction.
It deals with all aspects of
acquiring, keeping, and
growing customers.
