MK0015 Q.1 Ans. Discuss briefly about customer retention strategies in customer relationship management.

CRM (customer relationship management) is an information industry term for methodologies,

software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth. According to one industry view, CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices) Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.

Many organizations turn to CRM software to help them manage their customer relationships. CRM technology is offered on-premise, on-demand or through Software as a Service 1. Reducing Attrition

Virtually every business loses some customers, but few ever measure or recognise how many of their customers become inactive. Most businesses, ironically, invest an enormous amount of time, effort and expense building that initial customer relationship. Then they let that relationship go unattended, in some cases even losing interest as soon as the sale been made, or even worse, they abandon the customer as soon as an easily remedied problem occurs, only to have to spend another small fortune to replace that customer. The easiest way to grow your business is not to lose your customers. Once you stop the leakage, its often possible to double or triple your growth rate because youre no longer forced to make up lost ground just to stand still. 2. Sell and then sell again

So many people do an excellent job of making the initial sale, then drop the ball and get complacent, ignoring the customer, while they chase more business. Your selling has actually only just begun when someone makes that initial purchase decision because virtually everyone is susceptible to buyers remorse. To lock in that sale, and all of the referrals and repeat business that will flow from it, you need to strike while the iron is hot to allay your customers fears and demonstrate by your actions that you really care. You should thank them and remind them again why theyve made the right decision to deal with you and put a system in place to sell to them again, and again, constantly proving that they made the right decision.

3.

Bring back the lost sheep

Theres little point in dedicating massive resources to generating new customers when 25-60% of your dormant customers will be receptive to your attempts to regenerate their business if you approach them the right way, with the right offer. Reactivating customers who already know you and your product is one of the easiest, quickest ways to increase your revenues. Re-contacting and reminding them of your existence, finding out why theyre no longer buying, overcoming their objections and demonstrating that you still value and respect them will usually result in a tremendous bounty of sales and drastically increased revenues in a matter of days and will lead to some of your best and most loyal customers. 4. Frequent Communications Calendar

Avoid losing your customers by building relationships and keeping in touch using a rolling calendar of communications. This is a programmed sequence of letters, events, phone calls, thank yous, special offers, follow-ups, magic moments, and cards or notes with a personal touch etc. that occur constantly and automatically at defined points in the pre-sales, sales and post-sales process. People not only respond to this positively, they really appreciate it because they feel valued and important. It acknowledges them, keeps them informed, offsets post-purchase doubts, reinforces the reason theyre doing business with you and makes them feel part of your business so that they want to come back again and again. 5. Extraordinary Customer Service

The never-ending pursuit of excellence to keep customers so satisfied that they tell others how well they were treated when doing business with you. Moving the product or service you deliver into the realm of the extraordinary by delivering higher than expected levels of service to each and every customer. Key facets include: dedication to customer satisfaction by every employee; providing immediate response; no buck passing; going above and beyond the call of duty; consistent on-time delivery; delivering what you promise before AND after the sale; a zero-defects and error-free-delivery process and recruiting outstanding people to deliver your customer service. Extraordinary service builds fortunes in repeat customers, whereas poor service will drive your customers to your competition. 6. Courtesy system

A powerful system that improves the interpersonal skills of your team and changes the spirit of your organization. It involves speaking to colleagues politely and pleasantly, without sarcasm or parody, and treating them at least as well as you would want them to treat your customers. This will help your team to feel worthwhile and important, which makes for pleasant social contacts at work. It also motivates them to provide extraordinary service, encourages them to be consistently pleasant in all of their dealings and to relate to customers in a warm, human and natural manner. This results in better, warmer, stronger, more trusting relationships and longer term bonds with your customers. 7. Product or service integrity

Long-term success and customer retention belongs to those who do not take ethical shortcuts. There must always be total consistency between what you say and do and what your customers experience. The design, build quality, reliability and serviceability of your product or service must be of the standard your customers want, need and expect. Service integrity is also demonstrated by the way you handle the small things, as well as the large. Customers will be attracted to you if you are open and honest with them, care for them, take a genuine interest in them, dont let them down and practice what you preach and they will avoid you if you dont.

8.

Measure lifetime value

Theres a vast difference between the one-off profit you might make on an average sale, which ignores the bigger picture, and the total aggregate profit your average customer represents over the lifetime of their business relationship with you. Once you recognise how much combined profit a customer represents to your business when they purchase from you again and again, over the months, years or decades, youll realise the critical importance of taking good care of your customers. And because youll understand just how much time, effort and expense you can afford to invest in retaining that customer, youll be in control of your marketing expenditure. 9. A complaint is a gift

96 percent of dissatisfied customers dont complain. They just walk away, and youll never know why. Thats because they often dont know how to complain, or cant be bothered, or are too frightened, or dont believe itll make any difference. Whilst they may not tell you whats wrong, they will certainly tell plenty of others. A system for unearthing complaints can therefore be the lifeblood of your business, because customers who complain are giving you a gift, theyre still talking to you, theyre giving you another opportunity to return them to a state of satisfaction and delight them and the manner in which you respond gives you another chance to show what youre made of and create even greater customer loyalty. Other customer retention strategies include: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Q.2 Ans. Blogs CRM Systems Loyalty Programs Magic Moments Overcome Buyers Remorse Personal Touches Premiums and Gifts Questionnaires and Surveys Regular Reviews Social Media Welcome Book Explain briefly the 7ps of marketing mix. Marketing professionals and specialist use many tactics to attract and retain their customers. These

activities comprise of different concepts, the most important one being the marketing mix. There are two concepts for marketing mix: 4P and 7P. It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry. The 7Ps of the marketing mix can be discussed as: Product - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products. Price - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.

Place - It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers. Promotion - It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features. People - People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things. Q.3 Explain the stages in new service development and its implementation.

Ans. New service development: The Services are the concepts like insurance sector, banking sector, otel industry, hospitality and IT sector etc. The services are the intangible which makes it even more imperative for new service development having following four basic characteristics 1) Services should be Objective, not subjective. 2) Services should be precise, not vague. 3) For new service development services should be real and fact driven, it is not like opinion driven. 4) Services should be methodological, it is not like philosophical. It is necessary that for developing new services must be framed or structured and should be follow the defined stages often the new services are developed on the basis of internal peoples i.e employees, management peoples, managers subjective suggestions about what should be services and where they will succeed, rather than on the objective designs incorporating data about customer perception , market demand and feasibility. The services are produced and consumed simultaneously and often involve interaction between employees and customer, it is also critical that the new service development process involve both employees and customers. Following are the types of new service: - Major or radical innovations - Startup businesses - New services for the new current Market - Service line extensions - Change in Services Stages in New Service Development Process Front-end Planning 1. 2. 3. 4. 5. Business Strategy Development (or) Review New Service Strategy Development Idea Generation Concept Development & Evaluation Business Analysis

Implementation 6. Service Development and Testing 7. Market Testing 8. Commerlisation 9. Post Introduction Evaluation
New Service Developme nt Process

Frontend planning

Implementation

Business strategy developme nt or review

New service strategy development

Idea Generation

Service concept development and evaluation

Business analysis

Service Development and Testing

PostIntroduction Evaluation

Market testing

Commerci alization

Front and Planning The different development stages involved in front end planning, which include : 1. Business Strategy development or review : Anew service can be developed by first reviewing this vision and mission . The new service developed should align itself with the strategic vision and mission of the organization. 2. New Service Strategy Development : The goals, vision, capabilities, and growth plans of the organization need to be considered while developing new types of service. A new service strategy could be defined in terms of markets, types of services, time horizon for development , profit criteria, or other factors. 3. Idea Generation : The new service strategy screen screens the idea developed at this phase. Brainstorming, ideas from employees and customers, lead user research , learning about competitors are the methods, used for idea generation. 4. Service concept development and evaluation : The development phase begins once the idea is regarded to fit both the business and new service strategies. Service being intangible , places complex demands on this phase of the process . Describing an intangible service in concrete terms is difficult. 5. Business analysis : Estimating the economic feasibility and potential profit implication from a part of the next step after development . Demands analysis, revenue projections, cost analyses and operational feasibility are assessed at this stage. Implementation The different development stages involved in implementation , which include: 1. Service development and testing : This is the step where the product prototypes are constructed and customer acceptance is tested. This step presents unique challenges due to the inyangible nature or service and the fact that the production and consumption is simultaneous. It is in this step that the service is refined and service blueprint is drawn out. 2. Market testing: This is the stage where market acceptance is evaluated by introducing the new service in a test market. The new services might be offered to employees and their families for a time to assess their responsiveness to variations in the marketing mix. 3. Commercialization: This step involves the building and maintaining acceptance of the new service in the market. Excellent internal marketing will contribute significantly to the success of the new service. 4. Post Introduction evaluation : The information gathered during commercialization of the service can be reviewed an changes made to the delivery process, staffing , or marketing mix variables on the basis of actual market response to the offering.

Q.4 Ans.

Discuss the GAP model briefly. The five gaps that organizations should measure, manage and minimize:

G a p 1 i s t h e d i s t a n c e b e t w e e n w h a t c u s t o m e r s e x p e c t a n d w h a t managers think they expect Clearly survey research i s a k e y w a y t o narrow this gap. Gap 2 is between management perception and the actual specification o f t h e customerM a n a g e r s n e e d t o m a k e s u r e t h e organization is defining the level of service they believe is needed. G a p 3 i s f r o m t h e e x p e r i e n c e s p e c i f i c a t i o n t o t h e d e l i v e r y o f t h e experience Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the spec. Gap 4 is the gap between the delivery of the customer experience and w h a t i s c o m m u n i c a t e d t o c u s t o m e r s - A l l t o o o f t e n o r g a n i z a t i o n s exaggerate what will be provided to customers, or discuss the best case rather than the likely case, raising customer expectations and harming customer perceptions. F i n a l l y , G a p 5 i s t h e g a p b e t w e e n a c u s t o m e r ' s p e r c e p t i o n o f t h e experience and the customer's expectation of the service - Customers' expectations have been shaped by word of mouth, their personal needs a n d t h e i r o w n p a s t e x p e r i e n c e s . R o u t i n e transactional surveys after delivering the customer experience are important for an organization to measure customer perceptions of service. E a c h g a p i n t h e c u s t o m e r e x p e r i e n c e c a n b e c l o s e d t h r o u g h d i l i g e n t attention from management.

Q.5

Discuss about the marketing of service in banking sector, Airline Industry, Hospitality sector.

Ans. Bank marketing. Deryk Weyer of Barclays Bank call it a process, consisting of identifying the most profitable markets now and in future; assessing the present and the future needs of the customers; setting business development goals and making plans to meet them; and managing various services and promoting them to achieve the plans all in the context of a changing environment in the market. Why Bank Marketing? Awareness among Customers Modern technology has made customers aware of the developments in the economic environment, which includes the financial system. Financial needs of the customers have grown multifold into various forms like quick cash accessibility, money transfer, asset security, increased return on surplus funds, financial advice, deferred payments etc. With a wide network of branches, even in a dissimilar banking scenario, customers expect the banks to offer a more and better service to match their demands and this has compelled banks to take up marketing in right earnest

Features of Bank Marketing. Banking product cannot be seen or touched like manufactured products (intangibility) In marketing banking products, the product and the seller are inseparable; they together define the banking product (inseparability) Banking products are products and delivered at the same time; they cannot be stored and inspected before delivering (perish ability) Standardization of banking product is difficult (variability) Marketing in Airline Industry The India Aviation sector is one of the fastest growing aviation industries in the world. It can be broadly divided into the following main categories : Scheduled air transport service includes domestic and international flights. For example Indian Airlines, Kingfisher airlines. Non scheduled transport service includes charter operators and air taxi operators. For example Pawan Hans, Air Charters India. Cargo service includes air transportation of cargo and mail. For example QuickJet, Aryan Air. Many airlines also offer accredited taxis enabling pickup-and-return service. Plan for entertainment offerings are also on track that includes having hi-tech shopping models for its customers during their flight. Marketing in Hospitality Service The growing economy of India is also helping the hospitality sector to grow at rapid pace. Now, the hospitality sector is working on new marketing strategies. They are using marketing media very effectively. The online advertising has offered valuable services to the customer to have more information on lesser known vacation destinations. The provide supporting services such as parking and restaurant facilities, based on the requirements of the visitors.

Q.6 Ans

Write a short notes on:- (a) Pricing strategies of service. (b) Roles played by the customers (a) Pricing strategies :- Pricing strategy refers to method companies use to price their products

during service delivery. or services. Almost all companies, large or small, base the price of their products and services on production, labor and advertising expenses and then add on a certain percentage so they can make a profit. There are several different pricing strategies, such as penetration pricing, price skimming, discount pricing, product life cycle pricing and even competitive pricing. The different strategies that are used for pricing of a service : 1. Mark-up Pricing 2. Value for money pricing. 3. Image value pricing

(b)

The role for the customers in the service delivery

There are three types of roles for the customer in the service delivery process. The customer can be a productive resource, a contributor to quality and satisfaction or a competitor in the service delivery process. For the service Amtrak expects the customer to take part as a productive resource in the service delivery process to gain a better. For Amtrak it is clearly most effective for a customer to get the tickets from the Quick trek machine. There is simply no labor involved other than that of the customer himself. The second best way for Amtrak is if the customer orders his tickets online. This way, few employees are needed to send the tickets to the customers address. The last and most ineffective way for Amtrak is if the customer makes his purchase at the ticket booth at the train station. Amtrak needs to employ people to sit behind the counter and help the customer. This brings also the risk of complaints and lowering the customers perception of the service delivery. They totally depend on the person behind the ticket booth and blame that person for any mistakes. Although the customer still needs to provide the cashier with the necessary information. This leads to the second customer role. The customer can also have to contribute to the quality and satisfaction. The customer will be more satisfied if they think that they have done their part in the service delivery. Therefore it is advisable to involve the customer. By online and Quick Trek purchases the customer is fully involved. The customer needs to find out when and where he wants to go. What level of comfort he desires. If he wants to eat on the train, what he wants to eat. These are all examples of decisions that the customer is involved in. The third and last is viewing the customer as competitor. By answering the critical factors we can see that there is a way that the customer can be seen as a competitor. The customers ultimate goal is to get from point A to point B. There are few different options. The train is one and others might be going by car or taking a airplane. We can conclude that there is a certain form of viewing the customer as a competitor. If the critical factors associated with the external or internal exchange are reviewed, the conclusion is that the customer fulfills his role as a competitor by evaluating its options on substitution possibilities.