In this article we will discuss about the recent trends in marketing. Learn about:- 1. Customer Relationship Management (CRM) 2. E-Marketing 3. Internet Marketing 4. Marketing through Social Channels 5. Societal Marketing 6. Cause-Related Marketing.
The Ultimate Guide to Recent Marketing Trends
Recent Marketing Trend # 1. Customer Relationship Management (CRM):
The opening up of our economy through liberalisation and globalisation has led to increase in production and availability of a variety of products services. The market is flooded with different brands of these products and product differentiation is becoming more and more challenging. Therefore, acquiring and maintaining long-lasting relations with customers would enable the organisation to increase sales and profits.
Definition of CRM:
Parvatiar and Sheth (2001) have defined CRM as “a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.” Gronroos (1990) stated “CRM is to establish, maintain and enhance relationship with customers and other partners, at a profit, so that the objectives of the parties involved are met.”
Practitioners and consultants use Customer Relationship Management (CRM) to refer to technology-enabled processes for customer interactions and relationship building, while marketing academicians prefer the team ‘Relationship Marketing’ (Ref. G. Shainesh and Jagadish N. Sheth), Customer Relationship Management, MacMillan India Ltd., New Delhi (2006).
Features of CRM:
1. Customer Relationship Management (CRM) initiatives focus on building and maintaining profitable and long-lasting relations with the customers and creating superior customer value and customer satisfaction.
2. CRM focuses on co-operative and collaborative relationship between the firm and its customer. The focus is creating, growing, and retaining customers. Normally, a customer buys a product that offers the highest perceived value i.e., the difference between all the benefits and the cost of the product compared to that of competition.
Customer satisfaction denotes the extent to which a product’s performance matches with the expectation of the buyer. If the product matches his expectations, the customer is satisfied. If the performance exceeds expectations, then the customer is delighted.
3. Relationship management requires putting customer first and genuine customer involvement through communication and sharing of knowledge.
4. The customer is not to be treated as one-time purchaser but as a person who will patronise the brand for life time. If the customer is taken care, sales volume, market share and profits will grow.
5. CRM should focus on Customers (consumers, users and channel members) and the Brands.
6. CRM makes use of IT and database, interactivity through websites, call centres and other means of contacting customers. CRM solutions are provided by Siebel, Oracle CRM, Mynap CRM and others.
These CRM suites have the following facilities:
i. Demand planning
ii. Interactive selling
iii. Sales and service contact centres
iv. Analytics capability
v. Accounts management
vi. Automatic routing capability
vii. Mobile sales and service support.
Two important factors to be considered while selecting the customers are:
(1) Life-time value of the customers is based on the idea that customers who generate revenues throughout their life-time are more valuable than those who only make one transaction. Example- When a bank provides credit card, education loan to students for professional courses like MBA, these students may not be profitable in the initial years when they are studying. If the bank retains them after studies, they are profitable since many of them receive high-paying jobs.
(2) Share of the customer- Some customers are more valuable to the firm than others and over a period of time, the amount of money the customer spends with the firms can increase. Example- An automobile company like Maruti increasing its share of customers expenses through car loans at the point of sales, car insurance and servicing and spare parts, exchange offers, etc.
Customer and dealer research provide valuable inputs for developing CRM activities. Examples- Dealerwise, monthwise productive sales, payment pattern of dealers, key consumers and their offtake of different products etc.
Relationship Selling:
Personal selling plays a major role in selling consumer durables and industrial products. Some executives feel that all customers are important and all should be treated equally. This approach is good for building relations with public but does not take into account customer value and contribution to company sales and profits. It is a well-established fact that all customers do not contribute the same value to the company. Further, only a small percentage of the customers contribute to a large percentage of the total sales volume and profit.
Important factors to be considered while selecting the customers’ are:
i. Benefits- Concerned about quality, price and service
ii. User status- Non user, Ex user, potential user, occasional user and regular user
iii. Usage rate- Light user, medium user and heavy user
iv. Shop/Brand loyalty- None, medium and strong
v. Attitude to product- Enthusiastic, positive, negative and hostile
It is not possible for a salesperson to meet all the customers and develop relationship with them. To start with he has to select a few customers in each market so that he can offer more personalised service, which makes them feel happy and important.
1. Distribution Channel:
The channel members consist of wholesalers (distributors) and retailers and the company has to develop relationship with these channel partners. Distribution channel initiatives are designed to improve sales and profitability of the territory by developing a network of committed retailers and offering value-added services and solutions.
In order to be successful in the market-place, the channel partners particularly the distributors, should align their activities with the management objectives of the company. Companies are using Internet and other IT tools to avoid manual processing of data and promote positive channel partner experience.
2. Distributors:
The Company should initiate, at least on an annual basis, Business Development Plan Meeting with all the distributors. The meeting should focus on business performance, during previous year, areas for improvement (applicable to the company as well as the distributor) and plans for the next year. Incentives for achievement of agreed targets should also be discussed and finalised during the meeting.
This meeting provides an opportunity for the senior managers of the company to interact with distributors and sort out pending issues, if any. The plan should not remain on paper and, therefore, the sales executive and the reporting manager should do necessary follow up and assess the progress made during the course of the year.
All genuine problems have to address in the interest of the distributor and the company. The sales executive and the distributor could undertake joint tours and sort out the problems of retailers. The sales executive should also organise training programes for distributors’ promotion and sales staff to improve their performance.
3. Retailers:
Retailers plays a major role in sales, since they have close association with consumers. Further they extend credit facilities and push products where the margins are high. While there may be a large number of retailers engaged in selling, only a small percentage of retailers contribute to large percentage of the sales and profits of the company.
The company should create database showing retailer-wise information such as total sales value, volumes of different products sold, cash and credit transactions and company’s share in his total business. It has been observed that about 20% of the retailers contribute to about 80% of the business done by a company in a sales territory and, therefore, the sales executive should identify potential retailers and develop relations with them.
Some of the activities which will increase the involvement of the retailers’ are:
1. Detailing the products and highlighting product benefits.
2. Involving him in product demonstrations and meetings.
3. Credit facilities.
4. Sales incentives for achievement of agreed targets.
Retaining Customers:
It has been observed that acquiring new customers is a costly process compared to retaining existing customers. Further, a large percentage of profit comes from long-term customers and, therefore, the companies have to focus on existing customer-base. When a company loses a customer, it loses much more than a single sales transaction. It loses the entire business the customer would make over a period of time known as ‘customer life time value’.
Companies lose customers for a variety of reasons:
(a) If the customer finds that the price is high compared to the benefits offered by the product, he may buy another product;
(b) When a new product, with more features, is offered in the market, the customer may buy the new product;
(c) The customer may buy another product due to personal reasons such as easy availability, influence of friends and relatives and indifferent nature of the service provider;
(d) Some customers (Natural floaters) keep on changing brands particularly in the case of FMCG products.
However, many customers do not make complaints about products or services and some of the reasons are i.e.:
(a) The supplier may not take action on the complaint;
(b) Have to spend lot of time and efforts in filing complaint and follow up;
(c) Not aware of the procedure for complaining;
(d) Uncomfortable to make complaints;
(e) The supplier may argue and bulldoze the customer;
(f) The customer does not bother about the problem, he simply switches over to another brand.
Customer Relationship Management Programmes:
Programme # (1) Customer Loyalty Programmes:
Customer loyalty programmes offer additional benefits to loyal customers who patronise company’s products and services. Example- Hotels, airlines, shops, Credit card providers offer additional benefits in the form of bonus points, coupons, etc. to customers for repeat purchases.
Programme # (2) Customer Service Centres:
Customer service centres deal with customer complaints and offer solutions to their problems
Programme # (3) Customer Clubs:
Customer clubs provide opportunities for interaction between the customer and the company. The company tries to meet the needs of customers and provide them with goods and services that lead to customer satisfaction. Example- Many companies have formed ‘Achievers club’ which offers membership to distributors and dealers based on their sales performance.
Programme # (4) Customer Retention Programmes:
Customer retention programmes aim at retaining loyal customers by offering them target oriented schemes such as achievement of sales targets, new product volumes and prompt payment of outstanding’s, etc.
Programme # (5) Customer Interaction Programmes:
Many companies have initiated Customer interaction programmes through on-line (websites, e-mails, chat room) and off-line (telephone, fax, telephone) and outsourcing (call centres) activities.
Programme # (6) Direct Mailing:
It is a way of sending information relating to goods and services directly to prospects and customers. It can be used for sending an offer, reminder or announcement to a particular customer i.e., consumer, retailer, or distributor at a particular address. It is employed by company to bring in a personal touch.
Some of the points to be considered in preparing mailers are- design of the envelope, personalised sales letter, reply form and postage- free reply envelope. Greeting cards could also be sent during festivals such as Diwali, X-mas, Baisakhi, Durga pooja, etc. E-mail service is useful in the case of customers like corporate executives, dealers and distributors. The message arrives immediately and many companies have started using the same for sending product information and schemes.
Programme # (7) Telemarketing:
Telemarketing involves use of telephone to contact new and existing customers, to take order and to know the market situation. Telemarketing would be an additional support to the sales executive. Creating a central database of customers, timely communication and answering queries are essential for success of telemarketing programme.
Brand:
Many people feel that brand relates to product name, company name or logo. In fact, brand is much more than that. Brand includes company products, services, behaviour of company staff, distribution channel, and use of technology and management processes. It is the sum total of the experience of customers with the company.
A company may have high quality products, but if a distributor has to make repeat calls/send reminders for settlement of genuine claims, then the inordinate delay is damaging the brand. The company has to integrate the activities of sales, management, accounts, and logistic departments to develop positive brand image.
Current business environment is characterized by intense competition, more and more new products with less and less differentiation and demanding customers. The organization has to move away from a purely sales approach and initiative customer relationship management programmes to face the challenges in the market.
Recent Marketing Trend # 2. E-Marketing:
With a rapid growth of media, companies are able to sell directly to consumers without using the services of channels of distribution. The important media are catalogues, direct mailing, telemarketing, fax machines, electronic mail and internet.
During the recent years, electronic channels are being used for business transactions. Electronic marketing basically involves selling of products and services through electronic channels i.e., use of fax, e-mail, ATMs and smart cards for doing business.
ATM is a computerised telecommunication device that provides customers a method of financial transactions in a public place without the need for bank staff or bank tellers. ICICI bank is the most aggressive provider of ATM in our country. While ATM helps bank to attract customers, there is cost advantage too. An ATM transaction costs about 30% of the cost of transaction in a branch.
A Smart Card is similar to Credit Card but it contains an embedded microprocessor. It uses electronic cash and transfers from consumer’s card to seller’s instrument. Example- Using Visa Smart Card, one can transfer electronic cash to the card (from bank account) and use the card for buying products on the internet.
Advantages of E-Marketing:
Advantage # (1) Time Factor:
The company can send messages to distributors, dealers and consumers at any time and the receiver can access the mail at his convenience. The messages are received instantly.
Advantage # (2) Availability of Information:
The consumer has access to updated information on a variety of products and services which enables him to take purchase decision.
Advantage # (3) Geographical Coverage:
The messages can be sent to customers located at far off places including foreign countries and the messages will be received by them instantly. We can say that geography has become history and we are living in a “Global Village.”
Advantage # (4) To and From Communication:
There are facilities such as chatting and conferencing and business discussions could be held at short notice without the need for the physical presence of participants in one place.
Advantage # (5) Shifting of Selling Process from Seller to Buyer:
Buyers have become more and more demanding and they can choose from a variety of goods and services available in the market. E-marketing allows the sellers to catch the attention of buyers and also build relationship with them through Internet.
Advantage # (6) Distribution Cost:
E-marketing basically involves direct marketing and, therefore, the distribution channel costs are reduced. Example- The adoption of internet banking by customers cost less than that of ATM and bankers are persuading customers to follow on-line banking. ICICI bank has taken a lead in internet banking and many banks like HDFC, UTI, and SBI have seen increase in the number of customers registered for internet banking services.
Types of E-Market:
Type # (1) C2C:
In this case, consumers directly sell products and services to other consumers through internet. A good example of consumer to consumer application is e-bay. E-bay is an online auctioning site that facilitates selling of privately owned items between individuals.
Type # (2) B2C:
The organisation sells products/services to consumers; Examples- Travellers can buy tickets from Airlines and Railways through websites. E-retailing is the selling of retail goods on the Internet. Known as electronic retailing, it involves business to consumer transaction. E-retailers do not have to keep expensive show rooms as they can operate through their websites. Example- Flipkart sells books, computers, mobile phones, etc. on the Internet.
Type # (3) B2B:
The transaction is between business organisations using Internet. It includes quotations, purchase orders, payments, etc.
E-Marketing is a Customer-Led Business:
E-marketing makes use of database of customers and prospects and creates constant flow of information between customers themselves. E-marketing is a customer-led business and basic marketing principles apply to online marketing too.
Marketing management can be defined as the management process of identifying, anticipating and satisfying customer needs profitably. Similarly, E-marketing can identify, anticipate, and satisfy customer needs efficiently.
1. A website can fulfill the definition of marketing. It can identify needs from customers’ comments, enquiries and complaints through the website’s e-mail facility, bulletin boards, chat rooms and anticipate customer needs by asking questions and engaging them in a dynamic dialogue.
It recognises your visit to certain sites and without knowing your name, it knows your interest. When you visit a website, a relevant banner drops down — this is not a coincidence and cookies have anticipated your interests. It satisfies your needs through prompt responses, order status updates and helpful reminders.
2. If website is integrated with CRM system and mass customisation, then relationship develops and needs are completed satisfied in an efficient automated two-way process. Companies like Dell and IBM sell PCs online every day. Many shoppers browse online, collecting information on prices and special offers and then visit shops or pick up phone to negotiate better deals.
3. During the recent years e-advertisement has gained importance. Customers increasingly prefer to surf internet and many companies are making use of e-advertising for promoting products and services.
i. E-mail reaches a wide variety of targeted audience and companies develop a customer database and send e-mails.
ii. Banners are the commonly used form of advertising on the Internet. A banner contains a short text or graphical message to promote a product.
iii. Sky scrapers are the extra-long skimmy advertisements running down the side of a website.
iv. Mini-sites Pop-ups- These advertisements burst upon the screens. Example- ICICI, bank and naukri(dot)com.
v. Coupons can be printed out and used for online and off-line shopping.
vi. Interstitials- When you visit a site, a new window opens and it is called an interstitial. Example- Railway site and bank window asking you to apply for a loan.
E-marketing is making rapid progress in the following areas:
a. Stock Trading- On line buying and selling of shares has become popular in urban centres.
b. Music- Consumers can download recordings from the site instead of buying cassettes or CDs. Since music is recorded and stored digitally it can be distributed over Internet.
c. Tours and Travels- The industry is already making use of Internet for booking tickets, hotel rooms, etc.
d. Sending and receiving gifts.
e. Information on Residential flats/Office space available in major cities and towns.
f. Entertainment areas include downloading films and music and booking cinema tickets.
Opportunities and Challenges:
Many organisations such as Indian Railways, Indian Airlines, Jet Air, ICICI Bank, State Bank of India, Taj Hotels, Raj Travels, Bharath Sanchar Nigam Ltd., have taken initiative in E-marketing.
1. By making use of Information Technology and Internet, consumers can place orders for a variety of goods and services i.e., Air/Rail tickets, hotel rooms, books, shares of companies, wrist watches, cameras, dress materials, etc. This affects the business intermediaries such as travel agents, merchants, book-stores, and share and stock brokers. However, a new category of intermediaries, who help consumers in finding out low cost hotels, air tickets, etc., has come up. Examples- www(dot)yatra(dot)com, www(dot)makemytrip, www(dot)travelguru(dot)com
2. A customer database apart from providing details such as name, address, and telephone number, also gives information on past purchases by individual customers and also demographic and psychographic information.
Based on database companies can identify individuals or customer group and customise the messages about products and services to meet specific requirements. Creating database involves investment in terms of men, material and money and a well-prepared database can help the company to increase sales volume.
3. A company can have its presence on the web in two ways. It can rent a space on a commercial on-line service or it can create its own website. The website has to be made attractive through text, sound, and animation to motivate the consumer to visit the website repeatedly. Company can release on-line advertisements by many ways such as banners, pop-up windows and banners that move across the screen.
4. Many of the consumers who use websites, Internet, etc. are young and they form the target group for electronic products, travel and tourism and financial services. While on line shopping is picking up, misuse of credit/debit cards by unscrupulous elements is one of the problems faced by marketers. Of course companies are taking adequate safeguards to ward off such problems.
5. Many people surf the net for getting information about products and services rather than buying the product. There are very large number of websites, which provide voluminous information. The site should be able to draw the attention of people. Otherwise, it will go unnoticed.
6. Websites provide lot of information to the consumers and at the same time consumers may very strongly express their dissatisfaction about the company or the produce or the services and the same will be read by millions of people. Consumers are also concerned about unsolicited e-mails.
Internet users are mainly middle class people in urban areas. Only a small percentage of traders/business use internet. Many consumers are reluctant to buy through Internet as they not sure of the quality of the products and delivery of the products. Further they would like to touch and feel the products and negotiate the prices.
7. In the case of service industries, one has to be either a high-volume low-cost provider or a high-touch customer service provider. For the high-volume low-cost model one can use Internet technology to create self-service approach.
By providing lot of information to customers, we can drive a lot of traffic and transactions through Internet site offering best price. Since only a few companies in any market will be the high-volume players, most companies will have to find ways to use the Internet not just to reduce costs, but also to deliver new services.
8. With liberalisation and globalisation, the availability of products and services has increased in the recent years. The companies are trying to find out effective methods to reach the consumers and e-marketing offers lot of opportunities to the creative marketers. Examples- HUL has connected all their suppliers and has launched a project to connect their 7,500 distributors. Further, they have plans to connect key retailers in the market-place. ICICI Bank is attracting customers by offering them a host of special services such as Demat, electronic bill payment, etc.
Recent Marketing Trend # 3. Internet Marketing:
The advent of computers and Internet has added another important medium for selling products and services. The Internet is a worldwide network of computers to provide an alternative communication network. The Internet is free, but the user has to pay fees to Internet service provider for connectivity. Internet marketing can be defined as the use of the Internet and related digital technologies for achieving the marketing objectives.
The important types of network are:
(1) Internet consists of computers and users who can receive and send data files and has facilities for creating, viewing and listening to the contents.
(2) Intranet runs internally in a company and connects people within an organisation.
(3) Extranet connects vendors, distributors, dealers and consumers within the company. The access can be either partial or restricted.
Types of Internet Sites:
1. Company/product sites provide information about company, products/brands- www(dot)himpub(dot)com
2. Service sites facilitate customer service interface for a company like www(dot)monster(dot)com, www(dot)naukri(dot)com
3. Selling sites for purchase of products like www(dot)amazon(dot)com, e-bay
4. Information sites like www(dot)google(dot)com, www(dot)yahoo(dot)com
Types of Stores:
Type # 1. Web Store Format:
It is an online website and the customer could visit the website and buy products. It offers listing of products and payment processing facility.
Type # 2. Brick and Mortar Model:
Brick and Mortar Model has a commercial address and customers can transact business face to face. Further, the company may also have online services. Many consumers believe that Brick and Mortar Stores are more reliable due to the presence of physical shop with customer service counter. Of course, the younger generation is comfortable in doing Internet transactions.
Type # 3. Brick and Click Model:
Brick and Click Model provides on-line and off-line facilities. The customer can order online and pick up the product from the shop.
Internet and Market Segments:
These are three market segments:
1. Cyber buyers are professionals who spend considerable time on-line, at their place of business. They have to make major purchase decisions and want to locate sources of supply.
2. Cyber consumers are mainly home computer users who may be interested in on-line shopping and buying.
3. Cyber surfers are typically young people who surf net for fun.
During pre-Internet days, the only way consumers could get goods from most manufactures was through tiers of distributors and dealers. Today, consumers can transact business directly with the manufacturers who offer Internet service. Nowadays manufactures can provide on the Internet, the equivalent of a factory outlet.
Before the Internet, gathering all the information for travel, financial products and consumer products required lot of time. A number of service companies made money by collecting and organising the required information for the customers. Today, consumers themselves can go to the Internet to find out much of the information they need.
The company can dispense valuable information cheaply by means of Internet without branch offices. The websites provide information on products and services and the buyer can place orders directly by making use of credit or debits cards. The products are delivered to the address of the customer through courier or messenger service.
Mobile Commerce is the buying and selling of goods and services through handheld instruments such as cellular phone and digital assistants. The users can access Internet without the need for plug in. Mobile commerce would become the preferred choice for digital commercial transactions.
The areas covered include mobile banking, mobile ticketing, mobile vouchers, coupons, loyalty cards, information services such as sports results, stock data, and mobile browsing and shopping.
Recent Marketing Trend # 4. Marketing through Social Channels:
Many of us approach social channels consisting of relatives, friends or neighbours requesting them to recommend a doctor, hotel, hospital, insurance agent, plumber, painter or a lawyer to meet our requirements. Similarly, we take the suggestions of our social channels before buying consumer durables like refrigerators, air-conditioners and automobiles. Since we have confidence in their recommendations, we follow their advice in making a purchase decision.
In such cases, word of mouth publicity plays a major role in product promotion and companies are finding out way and means to stimulate social channels to recommend products and services. Word of mouth is probably the only method of promotion by consumers for consumers. Satisfied consumers make repeat purchases and recommend the products to others. Word of mouth publicity through social channels costs the business relatively little.
Companies can take the following steps to stimulate social channels to recommend the products:
1. Identify influential people in the society and convince them about the advantages of the products.
2. Offer them products at special rates.
3. Use influential people in testimonial advertising.
4. Develop rapport with them and request them to recommend products. Example- the Insurance agents, mobile merchants and salesmen dealing with household products are already making use of social channels for selling their products and services.
Recent Marketing Trend # 5. Societal Marketing:
It is broadened marketing concept and management is called upon to bring about balance of three factors- (1) Customer demand satisfaction, (2) Public interest (social awareness), and (3) Profitability.
The environmental trends like public welfare, increasing concern for better ecological or living environment on the earth or the higher quality, i.e., enrichment of human life, now stress that all organisations would have to adopt socially responsible marketing plans and programmes in order to assure social welfare in addition to customer satisfaction.
The societal marketing concept is based on the following premises:
1. The marketer has to fulfill the customer demand and also to contribute to enrichment or quality of life.
2. The marketer shall not offer a product to consumers if it is not in the best interests of consumers.
3. The marketer will offer long-run consumer and public welfare.
4. The integrated marketing plans and programmes shall duly consider consumer-citizen wants. Social welfare and corporate needs, i.e., sustained economic growth without ecological imbalances and disturbances. In essence, widened marketing concept will enable marketing management to create and deliver not only materials for good standard of living but also healthy life in the universe free from environmental degradation.
It has been observed that, while meeting customer wants, the marketers have neglected society’s needs.
Examples:
1. For the convenience of consumers, many companies have introduced carry-away plastic bags, plastic trays, disposable cups and all these items are thrown all over the place causing environmental problems.
2. Food products, mineral water, cosmetics, soft drinks are all packed in attractive plastic containers and pose health hazards and disposal problem.
3. Increase in demand for two-wheelers/four wheelers has caused high fuel consumption and at the same time adding to traffic congestion, air and noise pollution and safety problems.
Freedom from all types of pollution, enrichment of life and restoration of balance in the ecology have assumed unique significance in all countries since 1985.
The societal marketing concept is a management philosophy that believes in assessing the needs and wants of consumers on target market and to adapt the organization to produce and market goods to give expected satisfaction more effectively than competitors in such a way that preserves the consumers and society’s wellbeing.
Recent Marketing Trend # 6. Cause-Related Marketing:
Cause-Related Marketing refers to a type of marketing involving co-operative efforts of a business enterprise and a non-profit organisation for mutual benefit. The term is used broadly and generally to refer to any type of marketing effort for social and charitable causes.
Cause- Related Marketing differs from corporate philanthropy as the latter generally involves a specific donation that is tax-deductible, but Cause-Related Marketing is marketing relationship generally not based on donation.
The creation of the term Cause-Related Marketing is attributed to American Express and it was used to describe the campaign led by American Express in 1983 for the Statue of Liberty Restoration Project. American Express made a one cent donation to the Statue of Liberty every time someone used its charge card. The number of new cardholders soon grew by 45 per cent and card usage increased by 28 per cent.
The possible benefit of Cause Related Marketing for business includes positive public relations and improved customer relations and additional marketing opportunities.
Conclusion:
The essence of modern marketing is that the customer is the centre of the entire business system. There is a gradual shift from ‘buyer beware’ to ‘seller beware’. All elements of marketing mix have to be geared towards customer satisfaction. Many companies are following innovative marketing practices that focus on customer satisfaction and profitability.