Marketing Management: MKT 4430 ( CH 5, 6, 7)

CRM Process Cycle

---> knowledge discovery ---> marketing planning ---> customer interaction ---> analysis and refinement

Commonly expressed objections about an overreliance on ROMI

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Three Major objectives of CRM

1. Customer Acquisition 2. Customer Retention 3. Customer Profitability

Volume

One of the Four V's of Big Data Relates to the amount of data produced

Variety

One of the Four V's of Big Data Relates to the different types of data, including text, video, images, and audio to name a few

Velocity

One of the Four V's of Big Data Relates to the frequency at which data is generated over time, and the speed at which it can and should be analyzed and used

Veracity

One of the Four V's of Big Data Relates to the reliability and validity of the data

Knowledge Discovery

Part of the CRM process cycle. the process of analyzing the customer info acquired through various customer touchpoints

Consumer Decision making Process

Problem Recognition ---> Search for Info ---> Evaluation of alternatives ---> Product choice decision ---> Post purchase decision

Reference Group

a group of individuals whose beliefs, attitudes, and behavior influence (positively or negatively) the beliefs, attitudes, and behavior of an individual three categories: - association - desirability - degree of affiliation may be Primary or Secondary

Family

a group of two or more people living together and related by birth, marriage, or adoption

Subculture

a group within a culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography

Multiattribute Model

a model that measures an individual's attitudes toward an object by evaluating it on several important attributes. Learning which attributes are used and how individuals rank those attributes particularly helpful to marketers in creating specific marketing messages as well as the overall value proposition.

Emotional Choices

a product choice based more on emotional attitudes about a product rather than rational thought

Household Life Cycle (HLC)

a structured set of chronological activities a particular household follow over time

Internal Information Sources

all info stored in memory and accessed by the individual regarding a purchase decision

Interactive Touchpoints

allow for such two-way information exchange, they involve direct interface btw a customer and a firm's customer contact person in the form of a salesperson, telemarketer, customer service rep, interactive website, etc.

Predictive Analytics

an approach that utilizes data to make predictions about future marketing outcomes of interest. sometimes has a close relationship to diagnostic analytics--the relationships identified using diagnostic analytics can be used to predict how, as different market-relevant factors are expected to change over time, their influence on a marketing outcome leads to changes in the outcome over time.

Descriptive Analytics

an approach that utilizes data to provide summary insights. Often presented in visual format to assist in its interpretation by a broader audience. For instance scatter plots, or pie charts. Generally an appropriate first step to consider before employng more complex (and costly) analyses.

Language

an established system of ideas and phonetics shared by members of a particular culture that serves as their primary tool of communication

Customer Lifetime Value (CLV)

an important metric in CRM that demonstrates that successful long-term relationships with customers pay handsomely in terms of cost savings, revenue growth, profits, referrals, and other important business success factors the dollar value of a customer relationship based on the present value of the projected future cash flows from the customer relationship

Customer Mind Set

an individual's belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job

Preferred State

an individual's desires that reflect how he or she would like to feel or live in the present time

Real State

an individual's perceived reality of present time

Lifestyle

an individual's perspective on life that manifests itself in activities, interests, and opinions (AIO) Using this, marketers can develop a holistic view of the individual.

Personality

an individual's set of unique personal qualities that produce distinctive responses across similar situations

Learning

any change in the content or organization of long-term memory or behavior

Gender Roles

behaviors regarded as proper for men and women in a particular society

Short-term memory

info an individual recalls at the present time. Sometimes referred to as working memory

Cultural Values

principles shared by a society that assert positive ideals

Conditioning

the creation of a psychological association btw two stimuli requires little effort on the part of the learner two types: Classical: seeks to have ppl learn by associating stimulus and response Operant: entails rewarding a desirable behavior, with a positive outcome that reinforces the behavior

Desirability

the extent and direction of the emotional connection an individual wishes to have with a particular group

Formalization

the formal establishment of a firm's structure, processes and tools, and managerial knowledge and commitment to support its culture today the most prevalent form of customer-centric culture is CRM

Limited information search

when a consumer makes a purchase based on incomplete info and/or lack of personal knowledge

Minimal information search

when a consumer makes a purchase decision based on very little information or investigation

Analysis and Refinement

Part of the CRM process cycle. where organizational learning occurs based on customer response to the implemented strategies and programs

Primary Group

a reference group an individual has frequent contact with

Semi-structured Data

data that contains some elements of structure that make it easier for machines to understand its organization but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation

Structured Data

data that is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation typically numeric or text (ex. male/female)

Unstructured Data

data that is generated in such a way that is does not possess a specific organizational structure that renders it readily analyzable for knowledge creation ex. posts on social media, e-mails to customer service, call logs though not immediately actionable, it is the most common form of data available to organizations and a rich source of info on customer behavior

Degree of Affiliation

the amount of interpersonal contact an individual has with the reference group

Organizational Learning

the analysis and refinement phase of the CRM process that is based on customer response to the firm's implementation strategies and programs

High Involvement Learnign

the learning process in which an individual is stimulated to acquire new information

Firing a Customer

the shifting of investment of resources from a less attractive customer to more profitable ones

Market Planning

Part of the CRM process cycle. represents a key use of the output from the knowledge discovery phase. the info enables the capability to develop marketing and customer strategies and programs. CRM input into this process is particularly useful in developing elements of the marketing mix strategies, including employing the marketing communication mix in integrated ways to customize approaches to different customer grops.

Customer Interaction

Part of the CRM process cycle. represents the actual implementation of the customer strategies and programs. This includes the personal selling effort, as well as all other customer-directed interactions. These must be aimed at all the customer touchpoints, or channels of customer contact, both in person and electronically

Return on Marketing Investment (ROMI)

What impact an investment in marketing has on a firm's success, especially financially. A goal driven investment approach to marketing that maximizes the opportunity for a firm's offerings to reach their full potential in the marketplace

Return on Customer Investment (ROCI)

a calculation that estimates the projected financial returns from a customer. it is a useful strategic tool for deciding which customers deserve what levels of investment of various resources

Customer Relationship Management (CRM)

a comprehensive business model for increasing revenues and profits by focusing on customers

Marketing Dashboard

a comprehensive system of metrics and info uniquely relevant to the role of the marketing manager in a particular organization. Provide managers with up-to-the-minute info necessary to run their operation - actual vs forecast sales - progress on marketing plan objectives - distribution channel effectiveness - sales force productivity - brand equity evolution etc.

Customer Loyalty

a customer's commitment to a company and its products and brands for the long run

Attribution

a key consideration that arises when assessing the impact of the marketing mix, which can be thought of as determining how to give appropriate credit to different elements of the marketing mix through the measurement of their effects

Attitude-based Choice

a product choice that relies on an individual's beliefs and values to direct his or her assessment. using summary impressions rather than specific attributes to evaluate the alternatives

Selective Awareness

a psychological tool an individual uses to help focus on what is relevant and eliminate what is not relevant. Individual is exposed, on average, to btw 2,000 and 3,000 messages daily. Challenge for marketers is to break through people's decision rules, which are designed to reject the vast majority of stimuli they see every day.

Social Class

a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income, and occupation

Awareness Set

a reduced set of possible alternative a consumer considers after eliminating available options based on gathered information and personal preference

Secondary Group

a reference group with which an individual has limited contact

Consideration (Evoked) Set

a refined list that encompasses the strongest options an individual considers in a purchase decision once he or she has obtained additional info and carried out an evaluation

Marketing Analytics

a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions

Involvement

a significant outcome of an individual's motivation that mediates the product choice decision. It is activated by three elements: background and psychological profile, aspirational focus, and the environment at the time of purchase decision.

Data Mining

a sophisticated analytical approach to using the massive amounts of data accumulated through a firm's CRM system to develop segments and microsegments of customers for purposes of either market research or development of market segmentation strategies

Culture

a system of values, beliefs, and morals shared by a particular group of people that permeates over time

Perception

a system to select, organize, and interpret information to create a useful informative picture of the world drives attitudes, beliefs, motivation, and eventually, behavior

Sentiment Analysis

a type of analytic method that identifies the general attitude (e.g., positive, negative or neutral) contained within a message through an analysis of its content

Cognitive Learning

active learning that involves mental processes that acquire info to work through problems and manage life situations. Looking for information to help solve a problem

External information sources

additional information an individual seeks from outside sources when internal info is not sufficient to make a purchase decision include: independent groups, personal associations, marketer-created info, and experiences

Content Filtering

an analytic method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering

Collaborative Filtering

an analytic method that predicts a customer's preferences for products or services based on the observed preferences of customers who are perceived to be similar

Noninteractive Touchpoints

touchpoint where the customer may simply provide info on a static website's data entry form or by mail, without the capability of simultaneous direct interface with a company representative.

Prescriptive Analytics

an approach that involves determining the optimal level of marketing-relevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes. Draws on the results and insights derived from the other three approaches to provide a framework for making specific (and in many cases quantifiable) marketing management decisions. In another sense, it allows for marketing managers to engage in questions of "what if we do this or that" to assess the relative value of those decisions.

at the strategic level, a customer-centric culture includes, but is not limited to the following major componenets

1. adopting a relationship or partnership business model overall, with mutually shared risk and reward management 2. redefining the selling role within the firm to focus on customer business consultation and solutions 3. increasing formalization of customer analysis processes 4. taking a proactive leadership role in educating customers about value chain opportunities available by developing a business relationship 5. focusing on continuous improvement principles stressing customer satisfaction and loyalty

Opinion Leaders

Individuals with expertise in certain products or technologies who classify, explain, and then bestow info to a broader audience marketers can encourage through advertising, market research, and product sampling information gatekeepers

Diagnostic Analytics

an approach that utilizes data to explore the relationship btw different marketing-relevant factors that influence the organization's performance either directly or indirectly. Provides insights into the relationships of different factors with the implication being that an understanding of their relationships can have value for future marketing decisions. Linear Regressions, provide quantifiable relationship btw marketing outcome and specific market-relevant factors believed to influence that outcome, can provide evidence that any relationship exists

Marketing Analyst

an individual familiar with different forms of market and customer data and who is trained to conduct different market analyses, as well as the computational costs associated with those analyses. Four Key Types (in degree of complexity low to high) - descriptive analytics - diagnostic analytics - predictive analytics - prescriptive analytics

Database Marketing

direct marketing involving the utilization of the data generated through CRM practices to create lists of customer prospects who are then contacted individually by various means of marketing communication

Data Warehouse

handles all the customer data generated through touchpoints that can be transformed into useful information for marketing management decision making and marketing planning affords the opportunity to combine large amounts of info and then use data mining techniques to learn more about current and potential customers

Market Mavens

individuals who have info about many kinds of products, places to shop, and other facets of markets, and initiate discussions with consumers and respond to requests from consumers for market information marketers can encourage through advertising, market research, and product sampling information gatekeepers

Attitude

learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way

Aspirational Purchases

products bought outside the individual's social standing

Offerings

products, services, and customer experiences

Personalization

recommendation systems, such as content filtering and collaborative filtering, are examples of ________ using marketing analytics

Family Life Cycle

the changes in life stages that transform an individual's buying habits (series of life stages defined by age, marital status, number of children, and other factors)

Demographics

the characteristics of human populations and population segments, especially when used to identify consumer markets helpful to understand target market for two reasons - knowing the personal characteristics of a target market enables marketers to evaluate relevant statistics against competitors and the overall population using broad ____ studies like the US Census Bureau Reports - personal characteristics play a critical role in decision making - Important tool in market segmentation - enable marketers to evaluate relevant statistics against competitors

Big Data

the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources four characteristics that characterize, commonly referred to as the four V's - volume - velocity - variety - veracity Sources - business systems (POS, online transaction processing) - social media platforms - internet-connected devices - mobile apps - commercial entities - government entities

Low Involvement Learning

the learning process in which an individual is not prompted to value new information, characterized by little or no interest in learning about a new product offering

Customer Satisfaction

the level of liking an individual harbors for an offering

Nonverbal Communication

the means of communicating through facial expressions, eye behavior, gestures, posture, and any other body language

Selective Distortion

the process in which an individual can misunderstand information or make it fit existing beliefs.

Selective Retention

the process of placing in one's memory only those stimuli that support existing beliefs and attitudes about a product or brand

Motivation

the stimulating power that induces and then directs an individual's behavior basic assumptions: - person's characteristics can be measured to identity differences btw individuals - each person has a set of consistent, enduring personal characteristics Contemporary Theories of Motivation - Maslow's Hierarchy of Needs: wants and needs that influence behavior, ppl advance only to the next level if the lower needs are met - Herzberg's Two Factor Theory: certain factors in the workplace result in job satisfaction - Aldelfer's ERG Theory: expansion on hierarchy of needs, placing needs in three categories - McClelland's Achievement Motivation Theory: three categories of needs, and ppl differ in the degree to which the various needs influence their behavior Ch 6. Exhibit 6.3

Complete Set

the very large set of possible alternatives a consumer considers during the initial search for info. includes a variety of options across different brands and perhaps even products

Extensive Information searvh

when a consumer makes a purchase decision based on thorough process of investigation and research

Two primary Goals of any marketing dashboard

- Diagnostic Insight (looking at what has happened and trying to discern why) - Predictive Foresight (special emphasis here, using the diagnostic experience to better forecast results under various assumption about circumstances and resource allocations)

Social Factors

- Family - Social Class - Opinion Leaders - Reference Groups

Levels of Granularity of Personalization Achievable with Marketing Analytics

- Mass personalization - Segment-level personalization - Individual-level personalization

Situational Factors

- Physical Surroundings - Personal Circumstances - Time

What a marketing dashboard delivers...

- aligns marketing objectives, financial objectives, and firm strategy based on the selected dasjboard metrics - enhances alignment within the marketing function and also clarifies marketing's relationships with other organizational functions. Cross-functional alignment contributes greatly to a shared spirit for organizational success - portrays data in user friendly manner. creates a direct, understandable link btw marketing initiatives and financial results - fosters learning organization that values fact-based, logical decision making about allocation of marketing resources to achieve desired organizational results. - creates organizational transparency about marketing's goals, operations, and performance, increasing marketing's credibility and trust by organizational leadership and other areas of the firm.

Elements of great marketing dashboards

- efficiency and effectiveness - tools - diagnostic insight - predictive value - goals and objectives - skills - process - initiative ROI and resource allocation - brand and customer asset evolution

Potential pitfalls in Marketing Dashboards

- over-reliance on "inside-out" measurement - too many tactical metrics; not enough strategic insight - forgetting to market the dashboard internally

Customer Touchpoints

where the selling firm "touches" the customer in some way, thus allowing for information about him or her to be collected examples - POS systems - call-center files - internet access - records from direct selling or customer service encounters occur at the intersection of a business event that takes place via a channel using some media, such as online inquiry from a prospect, telephone follow-up with a purchaser on a service issue, face-to-face encounter with a salesperson etc. Interactive/Direct Interface vs Non interactive To maximize firm's ability effort must be taken to... 1) identify all touchpoints 2) develop specific objectives for what kind of info can be collected at each touchpoint 3) determine how that info will be collected and ultimately integrated into the firm's overall customer database 4) develop policies on how the info will be accessed and used