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Unit 41 Contemporary Issues in Marketing Management Assignment – ICT
Market experts emphasize of a rapid change in the marketing field. Marketing themes that involve creative strategic thinking and freshness, calls for marketing liability and marketing strategies that are sustainable.
In first task, discussion is involved on information and knowledge management and its role in relationship marketing, crm followed by relevant application to companies. In second task, discussion is focused on understanding different nature of organizations including private, public and voluntary sectors followed by understanding nature of relationship with customers in each case. In third task discussion is focused on service sector to understand relevance of extended marketing mix and use followed by identifying issue involved. Finally, a short discussion is made on role of it integration in service sector with applied examples.
In this section, discussions are made to outline and describe the significance of relationship marketing for organizations particularly in context of d&d enterprises, which is undergoing business crisis. As marketing consultant, the client d&d has been explained concept of knowledge management and role in relationship marketing citing examples of real cases that benefit from ict and crm. Finally, recommendations are provided for client improvements that are detailed in following part of report.
1.1 Explain the concept of knowledge management and its role in relationship marketing (ac1.1)
The transformation of industrial economy to knowledge economy ever since the shift from producers to service providers has led to the concept of knowledge management. Knowledge is processed information that becomes valuable and meaningful when developed and analysed correctly by organizations to make reliable decisions and strategic actions. These help to deliver greater value to customers, increase the product or service development and capably resolve business problems or challenges through information gained from knowledge base and past experiences. Hence, knowledge management is defined as insight used by organizations from values, information and experience that adds expertise and helps to develop organizational process and capabilities by creation, coordination, sharing and use of knowledge. This concept is widely used as source of competitive advantage for organizations to respond to customers and reach them in real time fashion. (alegre, sengupta and lapiedra, 2013)
Km and role in relationship marketing
Organizations use concept of knowledge management to build strong relationships with their customers by collecting and managing customer information to add value to their service and gain competitive advantage. This is used to add intelligence and innovation by continuous organizational learning hence knowledge management and relationship with customers is inter related concept and needs to be integrated in crm strategies of organization to get value added knowledge for customers as well as organizational objectives. (fidel, cervera and schlesinger, 2016)
Moreover, km is used to develop new products/services by using information on customer behaviour, patterns and perceptions. Even if the information gained is negative, it can be used to develop sales, new positioning strategies and increase customer satisfaction through customised relationships. An integrated model of km and its role in relationship marketing is outlined in diagram below.
1.2 How ict can support the crm process in a particular organization (ac1.2)
Integration of technology in the process of business and communication is widespread today, which has built real time access, faster services and reduced manual working in the companies. In business ict is integrated into two ways i.e. Through traditional computer based application and modern digital communication. (kang, tang and fiore, 2014) example, starbucks that is a retailer company has integrated technology to facilitate customer relationship. They have switched from traditional methods like telephone communication or drop box to new improved ways for customer relationships such as social networking, digital media etc.
The various ways of ict that supports crm process in starbucks are:
- Starbucks have customer subscription accounts by which customer can manage their shopping and rewards online.
- Starbucks have reward cards, gift vouchers and loyalty coupons to value customer relationships. For every purchase that is made points are credited on cards which when swept in stores details the purchase data of customers on starbucks’ pos. These then sends customised discount offers or rewards to customers depending on their shopping patterns.
- Starbucks have online shopping portals, which eases shopping habits of customer’s by giving quick and convenient access from anywhere anytime.
- Database used by starbucks stores and manages information on products, prices, stores, stocks etc that helps to maintain flawless customer delivery by processing and storing vital information on procurement, billing, stockpiling etc.
- Emails are used in starbucks to connect with customers, suppliers and even employees by sending instant messages across interest groups. This is mostly used to mail newsletters, promotional messages as well as by employees to process company information. (kang, tang and fiore, 2014)
- Video conferencing arrangements are also used to connect starbucks management with geographically spread teams to discuss business strategies and decide on critical functions through virtual meetings.
1.3 Benefits of crm in a selected organization similar to d&d enterprises (ac1.3)
Customer relationship management is the process managed by organizations to facilitate valued services to their customers and maintain competitive edge in their offerings by connecting with them personally. These specialised processes help to handle customer queries and complaints effectively in real time as well as maintains public relationships. Example, crm in starbucks helps to maintain a favourable and strong brand image on customer perception that helps them to deliver uniqueness in market. The customer service representatives as well as sales force team of starbucks interact with customers daily and thus they know tastes and preferences of customers. They build close coordination with customers by understanding their needs. This helps to maintain customised service for customers and meet their specific expectations. Also database maintained for crm helps to deliver targeted discounts or loyalty benefits according to purchase patterns of customers which helps them return back to stores. This even helps to identify changes in preferences so that starbucks can modify product/service offers to suit customer demands and maintain their market dominance. (chua and banerjee, 2013)
Starbucks has feedback groups where customers can register their concerns or complaints for which they can expect assured responses from starbuck management. This helps to solve problems as well as build a favourable image on customers. Moreover, social groups help to maintain public relationships as well as target existing and new customers with new arrivals and events. Overall, this helps to maintain bonding with customers and maintain their satisfaction levels.
1.4 Recommendations for improving crm for the selected organisation (ac1.4)
In order to improve customer relationship management within d & d enterprises the following recommendations for improvement can be incorporated:
- D&d enterprises can focus on adding customer delight to spread positive word of mouth promotions that affects sales. Adding delight in customer expectations means going extra mile above their anticipations to add enthusiasm and value from services or products offered. This will improve key performance indicators and stimulate customer desire for repurchases. Customer delight can be integrated through process, framework, people or administration improvement that adds quality practices and conveys values to customers.
- D&d enterprises can focus into client delight too by building stronger associations and better correspondence among suppliers. This will add timely procurement and distribution of products to keep the services within stores more functional and hassle free. The suppliers can be given better commissions or rebates on mass supplies as well as transparent contractual agreements to build strong business alliances. (schiff, 2014)
- They can also start loyalty programs like reward coupons, club card sponsorships to express value to customer and add joy to them. In addition, personalised handouts or messages can be given as token of appreciation for customers. This will increase loyalty and make the customer’s feel valued.
- Lastly, they should empower support staff to enable strong customer management in stores. When employees will be better trained, they would be capable to assist customers and support their necessities. This will add extraordinary improvements into crm at d&d enterprises.
Thus from the study it can be concluded that proper understanding and application of knowledge management concepts are useful for building relationships with customers and suppliers. It not only improves business learning and identification of existing trends but also even prepares for future challenges along with improving customer satisfaction and relationships.
In this section discussion is made to understand the role of marketing in non traditional organizations by carrying out stakeholder mapping for voluntary and public sector organizations, understanding nature of relationship with customers in different organization followed by outlining marketing contemporary issuesin virtual organizations. For better learning various real examples are applied in study as followed.
2.1 Carry out a stakeholder analysis for a voluntary sector and a public sector organisation (ac 2.1)
Stakeholder is someone who has concern in business and they can be financers, shareholders, employee, customer or society. Based on interest their involvement can vary widely. Stakeholder analysis is systematic representation and logical interpretation of interest and power of these stakeholders in business. In this section stakeholder analysis is conducted on voluntary (british red cross) and public sector (nhs) organizations. (ncvo, 2014)
Stakeholder mapping of brc
- Employee: they are representatives of brc who work to achieve the goals and values of this voluntary organization. They partake in charitable and emergency administrations to support the cause of community help by brc. The employees have both high interests but low power in organization.
- Board of directors: they are visionaries who direct the future mission and objectives of brc through their expertise guidance and administration. They deal with arranging aids, funds and support from community or government regularly to achieve activities of this not for profit organization. They have high interest and power within organization.
- Donors:they are people who offer grants or financial help for brc to provide its social activities on regular basis. They have high interest and power.
- Supporters: they are fund raisers who participate in raising contributions from people by making them understand what and how brc functions. They create awareness among society to make them step forward for charity. They have low interest and low power.
- Media: they are people involved in public awareness and relations between public and workers of brc. They communicate activities to general public to encourage voluntary support and contributions. They have high interest but low power.
- People in need:these are individuals who are supported by brc either during disaster or emergency support. They can be people who were given first aid or refugee support. They have low interest and high power.
- Community:these are native communities that provide voluntary support or contribution during rescue and disaster support or health & care. They have high interest but low power.
- Government:they support causes of brc by funding their activities or by providing support through agencies like medical providers, emergency service providers or relief operators to support needy during catastrophes. They have high interest and high power.
Stakeholder mapping of nhs
- Director of public health & nursing: these people have high influence and interest in activities and objectives of nhs and they are regularly involved in decision and strategic planning for development of action plans. (inha, 2015)
- Board committee members & trustees: they are nhs bench members who plan, execute and control activities of nhs and its associates. They have high influence and power.
- Funders: they are stakeholders who provide funds or grants to support initiatives of nhs and public funding. They have high interest and power.
- Employees: they are serviced providers of nhs and work for fulfilment of its goals. They have high interest but low influence. (inha, 2015)
- Patients: they are service users of nhs who have low interest but high power. Delivering quality service is necessary to keep them satisfied.
- Interest groups & media:they are people who maintain public awareness by conveying benefits of various activities taken by nhs or raising risk concerns by educating public. They have high influence and interest. (inha, 2015)
2.2 Nature of the relationships with customer within two selected not-for-profit organisations (ac 2.2)
Maintaining transparent and strong relationships with customers mainly donors, sponsors, fund raisers, recipients etc within ngo’s is critical to maintain flow of funding. Donors get interested to contribute only when they believe that their charity is used properly for community support and not misused. In this section, discussion on nature of relationships is made in context of british red cross and cancer research uk.
British red cross: they provide voluntary community services for distressed people responding to their first aid needs, emergency service, refugee support, disaster and armed conflict relief. They protect and work for betterment of society by directly interacting with people by their activities. Brc volunteers provide emergency and disaster relief services to affected people by providing food, shelter, healthcare and mental support. They support military families and veterans by protecting their needs, provide conventions during wartime to soldiers and civilians and safeguard international humanitarian laws to improve relationships with civilians, army and donors. Brc also provides refugee and asylum support, provides mobility aids like wheelchairs, walking sticks etc and organises blood donation camps to meet needs of community. Thus, they interact tirelessly to build relationships with members and donors. (british red cross, 2016)
Cancer research uk: they provide cancer support services to community by funding scientist, doctors and nurses who work for cancer care and research. They raise donations from society and develop policies that inform people about various government decisions and support related to cancer and its research. (cancer research, 2016) some of the highlights of activities undertaken by cancer research during 2015-16 are shown below.
They also raise funds from donors to invest in life saving research. Fig below will illustrate their active investments. Hence, cancer research has both direct and indirect relationships with their customers who are researchers, care workers, recipients, donors and volunteers.
2.3 Compare methods used in marketing within the public, private and voluntary sectors (ac2.3)
- Private sector: these constitute business owned by individual proprietors for purpose of profit generation. Example, topshop is british fashion company that has entire range of products from clothing, accessories, shoes, bags and beauty. It is a massive and favourite fashion destination among consumers aging between 15-35 years and they use aida model for marketing and driving consumer focus.
- Attention:topshop uses visual promotion technique to draw customer attention. They endorse their brands by involving celebrities like kate moss and christopher kane along with featuring signature styles in london fashion week regularly to create customer attention and appeal for high street fashion. (wong and yazdanifard, 2014)
- Interest:topshop charms their regular targeted customers with trending styles and glamorous picks to make seasonal profits. They also target young adults specially college students to raise their interest by offering discounts when they receive student loans such as back to school/college promotion campaigns. Further to target interest among office goers topshop markets their products by promotions like lock in’s or late night shopping as these groups can shop only in free evening hours.
- Desire:topshop creates customer desire by endorsing celebrity fashion icons or by creating appealing publicity on social media. This desirability targets customers even if they do not have need but for satisfaction of desire. (wong and yazdanifard, 2014)
- Action:after successfully creating attention, raising interests and planting desires in customers, topshop enjoys action phase i.e. Purchases made by customers which is result of their aida model used for marketing.
- Public sector: this constitutes organizations or institutes funded by public money. Example nhs provides healthcare support in uk and is funded by public taxes that are paid to government. These run for no profit purpose and their focus is providing access to services for all citizens uniformly.
In order to market their services nhs uses various promotional campaigns to raise public awareness and education. Example, “change4life” initiative of nhs encourages improving nation’s health by healthy eating and living longer life. They promote their message to public through tv advertisements, digital media and by interacting with people directly. Target customers of change4life are parents and children. Similar initiative undertaken by nhs is star4life, which targets healthy habits right from birth. (crawshaw, 2014)
The marketing strategy taken in change4life includes collaboration of government agencies, corporate and social groups. Like department for transport support this campaign by encouraging walking and cycling, dcms supports through free-swimming etc. Ngo’s like cancer research, british heart foundation support this campaign by raising public awareness through linking weight gain and disease further corporate like kellogg’s, pepsico, asda, tesco etc support breakfast club programs, sponsored public service activities and benefits of active life.
Voluntary sector: this constitutes of organizations that work for community development and support. They have no profit motives but works globally to provide relief services during crisis, disaster, epidemics or emergencies. Example, msf (doctors without borders) markets its strategies to generate donations and attracts funds by using content and social media marketing and target marketing. Msf target audiences are doctors, nurses who can volunteer their service for public health. They market their services and initiatives in hospitals, medical institutes by interacting, distributing pamphlets and posting articles on digital media to narrate crisis faced by vulnerable people, refugees, warzone civilians etc. They use info graphics and stories to target audiences for funding and volunteering support. (powers, 2014) they also use documentaries like exodus to raise concern on issues faced due to migration in syria, mexico thereby marketing charity calls from public and agencies. Msf use public celebrity figures like angelina jolie to create attention of public for their charitable causes along with promoting interest on social media through posting true stories that can encourage donations and hope.
2.4 Key issues involved in marketing in a selected virtual organisation (ac2.4)
Virtual organizations are those that focus on digital marketing and distribution. Their products are displayed on internet platform and they have no point of sale or customer touch points for selling. Customers visit their website, browse products and order them online. They have strong partnership function with suppliers. In this section, issues faced in marketing within virtual organisations and behaviour like ebay is discussed.
In organizations that operate in physical space, sales persons are representatives that interact with customer directly to identify, anticipate and satisfy their needs. Whereas ebay uses digital platform to interact and understand customers which is a complex process with limited scope. Sometimes customers have habit to browse various categories without actually reaching to final purchase. However, this is not so in non-virtual organizations as sales force convinces and persuades buyers to create interests. Ebay cannot use push sales strategy for promotions through its distributors. They have only scope of pull sales strategies to create interest, plant desire and initiate purchases. Lastly, quality cannot be perceived on virtual platform so ebay has to depend largely on customer reviews and word of mouth promotion for creating publicity and attract customers. While non-virtual organizations have touch points where customers can check product quality to make their mind for buying. (zhou, zhang and zimmermann, 2013)
Thus to ease approaches of marketing in ebay cookies and advanced technology is incorporated to understand, identify and analyse customer behaviour and patterns so that customers can be convinced to reach to final purchase decisions without need for physical space.
Hence, it can be said that there are different sets of strategic application used in private, public and voluntary organizations depending upon their objectives. Each of them follows different patterns depending on nature of business and its customers for marketing.
3.1 Describe the use of the extended marketing mix in a selected service sector businesses (ac3.1)
Product marketing’s marketing mix comprises of 4ps whereas the services marketing intakes three more ps commonly known as extended market mix or 7ps of service industry. The added 3ps are people, process and physical evidence. Service industry needs the additional ps because of its unusual characteristics. One can observe that a service industry’s product is not tangible as it cannot manufacture and compress services but are concurrently produced and delivered. A service cannot be touched but are experienced by the customers. Services are perishable which are dependent on who, when and how it is provided. Service industry requires additional marketing mix elements because of characteristics like intangibility, inseparability, heterogeneity, instability etc. (bhasin, 2016)
The first 4ps in the figure depicts the product marketing mix while the next 3 ps are added for making the extended marketing mix.
The extended marketing mix has been explained by considering the ledbury as a service example.
- Process in ledbury:the sole purpose of this element is identifying how the restaurant can thoroughly do things further creating a process that meets thecustomers’ expectations. Being a restaurant ledbury determines the number of tables it shloud have, whether alcohol will be served, number of waiters needed, how many tables per chef will handle etc. Deciding the process empowers ledbury in executing the operations more easily and quickly which is the prime role of extended marketing mix. Ledbury designs a service blueprint outlining the entire process, right from the time customers enter the restaurant to the time they leave and the table is cleaned. Manager ensures that everything is followed according to the service blueprint. (bhasin, 2016)
- Physical evidence ledbury:this being a tangible element, ledbury adds it to its intangible services for differentiating itself from the competitors. Ledbury ensures it is a high budget restaurant by keeping only necessary furniture and engaging minimum workforce, adding good lighting and ambiance, serving exotic dishes.
- People in ledbury:this is crucial element because ledbury understands that the business cannot grow in the absence of right people in the right place. (bhasin, 2016)
3.2 How product/service mix can be used to enhance value for the customer and organisation (ac3.2)
One can refer product mix to the wide range of product lines that organizations offer to the consumers. The dimensions of a product mix comprises of width, length, depth and consistency. Service mix, on the other hand, is the consolidation of various services a service sector organization offers to the customers for giving value. (suttle, 2016)
Service mix can be classified into three namely core service, facilitating service and enhancing service. The usefulness of service mix has been analysed by considering burger king as an example.
- Core service: burger king’s core service is serving burgers, fries and hot dogs i.e. A pure fast food to its customers. Their key objective is offering the customers with fresh, healthy and delicious food for sustaining longstanding relations. Hence, it is essential that burger king, which originally is a fast food chain, maintain a robust core service for delivering maximum customer satisfaction in terms of value propositions. (suttle, 2016)
- Facilitating service: it is linked with burger king’s core service. Take for example, activities like billing and payment, sharing information to customer, taking and delivering orders etc. Are considered as facilitating services that supports the core service of the fast food chain. (suttle, 2016)
- Enhancing service: in this last section, burger king ensures that the customers are provided with added services such as baggage counter, parking zones, kids corner etc. Whenever they visit the outlets for enhancing their interest in making repeated visits to the store.
3.3 How marketing of services difficulties can be overcome with reference burger king (ac3.3)
Organisations have to deal with uncertain difficulties in the marketing of services because of agressive market competition, rapidly changing customer preferences, demographics, culture and economic conditions. When us based e-commerce brand ebay planned to expand its business in china, the marketing team undertook the themes similar to that of us and uk markets which eventually resulted into zero output. Ebay’s promotion strategies went unaffective in the chinese market because of two prime reasons, first, the unawareness of the brand and secondly, because of strong market foothold of alibaba which is a chinese e-commerce company. Tremendous downfall in sales forced ebay to temproraily stop its operations in chinese market and conduct a rigirous market research for addressing the problem. During the market research, ebay realised that since chinese people are vastly familiar with the local language the promotional campaigns of ebay went unseen. Its biggest competitor alibaba engaged local vendors for products supply and even its website is translated into local language i.e. Chinese triggering their market share to approximately 80%. Once the probelms were identified, ebay immedaitely changed its marketing promotional theme and got in touch with the local vendors for maintaing the supply chain. Hence, one can observe that localisation has a significant role in the marketing of services of global brands. (lafevre, 2013)
3.4 Role of it in services marketing management in a selected organization (ac 3.4)
With the emergence of advanced technology, organizations are being highly influenced because today more and more customers are dependent on technology for fulfilling their needs. For being in the race of market competition, organizations are enforced to incorporate it into business practices. Through service marketing burger king aims of delivering quality and innovative services to targeted customers. One can observe the prominent role of it in burger king through its website. (moneymatters, 2016)
Burger king’s key objective is serving healthy and quality foods iced with excellent services to its customers. Keeping the objective in mind burger king has installed smart tables in the outlets allowing customers to order their food without waiting for the waiter or stand in long ques.
This digitalization of services has enabled burger king in becoming more customer-friendly and instant serving of food. Moreover, the technology-enabled systems will allow the stores in maintaining the customer details in the database making the home delivery services more prompt and reducing the errors in the billing process. Although, use of advanced technology comes with additional costs, it can guarantee effectiveness of services further enhancing customers’ equity within burger king.
At the end, one can conclude that effective crm plays a significant role in not only attracting more customers but also retaining the old ones. Ict has emerged as key marketing tool and its absence can restrict business efforts of establishing effective marketing. By conducting stakeholder analysis d&d enterprise can easily determine the key stakeholders and their impact on overall business. Discussion have made on the importance of extended marketing mix in the service industry.
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