WEEK 3
• How to Discover People’s True Needs?
• Ones attitude toward objects is largely
determined by the total environment in
which he is evaluating the object (McGuire)
The Roles of Internal Filters
• It is the attitudes not the opinions we should
be exploring, and that we should recognize
that the environment in which a new
product is to be used plays an important role
in its evaluation.
Five Levels of Emotion That
Guide Consumer Behavior
Self
Values Different than beliefs, more intense.We don’t like discuss
Fidelity, family, honesty. We seldom tap into Values.
Beliefs Reflects a persons particular social and private orientation
Attitudes We begin to take a serious look.Our behavior can be
influenced at this level.
Opinions First emotional responses
“Hmm maybe I like that. I am not sure I will ask my friends”
Assimilation (Absorption) First Exposure, First observation or perception
of new information.
Perception Expansion Theory
We first begin to form acceptance or rejection
of new concepts at the attitude level.
Self Precursors to the formation of beliefs and
values.
We process the data and examine it to see how
it fits within our value structure.
We begin to make decisions about issues and
Values
situations, and we become prepared to present
Beliefs
those decisions as our own, ready to defend
them to the outer world.
Attitudes
Can it help me solve problems, or feel better
Opinions about myself or make me feel more secure?
If so we react positively to the incoming data
Assimilation if not the data is rejected.
“OK you fit, I will react positively to you”
The sale is made, because we have answered
the question WIIFM.
Breaking the Opinion Barrier
Concept Boards
McGuire's findings suggest that a respondents
attitude toward objects, (technology/products)
is largely determined by the total environment in which
Self he or she is evaluating the object.
We need to create an artificial environment that would replicate the
environment in which he or she is evaluating the object.
Values
The most effective way is to create a concept board.
Beliefs
11” * 14” graphic renderings suggesting a product in use situation
Attitudes
Opinions
Assimilation
Probing for Negatives
• Ask customers to look at the concept boards and
give us reactions, they immediately share their
expertise in the area, or tell us how they don’t
need this.
• First reaction comes from the opinion level( the
immediate reactions) and then we probed beyond
that.
• Challenge them what is wrong with this concept
• We need to learn what the concept doesn’t solve.
• Fulfilling our customers unmet needs.
• People buy products and services because
of the benefits being promised, not because
of features the product may have.
• People buy for One reason
WIIFM.
So we must be able to identify their real needs
accurately, before we can create products that offer
benefits that fullfill those needs.
WIIFM
What Is In It For Me ?
• What is our potential customer really looking for in a new product or
service?
• How will it benefit him or her?
• What need or desire are we fulfilling with our new product?
Build a brand that stands for
solving problems
The quest for a solution brand
The USP Links Features and
Benefits to Needs
Products Consumers
Features Unique Selling
Proposition Needs
Benefits
If we truly have the benefit needed by customers all we have to is to find a unique way of
presenting it to them, a way that appeals to their conscious or subconscious needs and we ll
make a sale. And that is what its all about.
Linking Benefits to Needs
• Unique Selling proposition
– Earths biggest selection - Amazon.com
– The worlds online market place - Ebay.com
– The internet superstore - buy.com
– Solid smarts, straight talk, easy answers Dell.com
– The ultimate driving machine - BMW
– Everything that is fit to print - NY Times
• Brand image
– Give your product a first class travel ticket through
life..
Erase the Line between
Product and Service
• No longer is it enough to simply, market a product or a service alone.
• Products and services alone must be so tightly linked that it becomes impossible to see
where intangible benefits and tangible benefits begin
• And that interconnection must not be limited to the selling process; it must drive the
product development process from it s inception to create what we call an offering.
Product
Product Marketing
(Tangible + Intangible)
Development Service
Offering
Nike.com
Where Do Products Fit?
• Internet driven world is less about tangible items than about intangibles.
Intangibles > Tangibles
Information
Information about Stuff
about Stuff Information
about Stuff
Information
Information about Stuff
about Stuff
Information
about Stuff
Instant access All information
All the time
•The networked environment increasingly affects how the offering is created
sold and distributed.
Buyers can instantly measure:
Supply against Demand Increased Commoditization
Feature against Feature of many products.
Price against Price
With the market itself determining the real value of a
product at any given moment.
New and expanded competition
The emergence of flex pricing
The emergence of digital b2b marketplaces
Automated shopping agents.
Commoditization can affect just about any product, from hard to soft goods as the
nature of the business environment changes.
When products or services are commoditized you must find other ways
to provide added value
-Something that people will be willing to pay for.
Amazon.com Web site
Hotmail MSN Messenger
Nike.com Your own brand name shoe
The Great Value Shift
Products are commoditized Find other ways to provide value
Onstar System
Can I
help you?
Emergency
The Offering
• One way a company can protect itself against a possible value shift in
its business category is to do the value shift itself.
• Marketers need to look for ways to expand what the company
provides its customers.
• The new way of doing this is to create an offering.
Offering
• An offering is a tight unification of product
and service that better satisfies customer
needs and wants and helps enhance the FV
of the Customer Relationship.
Increased Future Value of
Customer Relationship
Service Product
Customer
Interaction
Expanding the Future Value of
CR
Focuses on
What is being sold $$$$$$
An offering
How the purchase can be
leveraged for
Up selling
Cross-selling
Selling something entirely new
Future Value
• To truly unlock FV, an offering must
be structured in such a way that it Maximize opportunity
maximizes the opportunities to gain to collect information
valuable information.
• A company must take into account
Customer Service as an integral part of
the offering itself rather than as an
Include Customer Service in the
integral value proposition, or, worse, offer
afterthought.
• Selling, implies convincing the
customer of the value of a products or Convince the customer of the
service. value of the product
• The emphasis switches from a
company selling to a buyer choosing. Buyer chooses
• When you provide an offering , you
recognize that the customer is in Customer is in control of the
control of the process of deciding how
to satisfy his or her real preferences. process of deciding
Product Service Linkages
• Service that surrounds product
• Service that encompasses product
• Service that is added to the product
• Service that creates the product
• Service that becomes the product
Service that Surrounds Product
- Selling banking products is still its
core competency but the services that
surround it s products are the
differentiator.
- The banking and the service are the
new offering.
Real time stock trades online
$1 million Cellular power systems
1999 Profit $289 million up 77.6% from previous year
Service Encompasses Product
Everyone having access to anyone and anything at
the touch of a button. No company can disassociate
themselves from any element of the value chain.
Mastercard and Intel
“Cardholders and merchants
are now coming directly to us”
President, CEO Mastercard
Service Added to Product
When the airbags are deployed,
when you hit the Button the service
is on the way.
Strengths the product offering
Increases customer loyalty.
Service Creates Product
A personalized Garden
The service actually developed the product.
Also provides lots of instant data about the
customer’s gardening interests
Service Becomes the Product
Educational and entertaining
Virtual Bank Accounts
As the various features of the web site are accessed whether through chat rooms
Games or educational areas virtual money is earned by the young person.
The more traffic the more money.
The service becomes the product in the minds of registered participants as much as the
Actual bank account that is opened in order to accept the offering.
Add Relationship Equity to
Brand Equity
•In the new era of individualized marketing everything changes.
• A company's Products, Services, Prices and customer contacts must
become as varied as the customers themselves.
•As companies moved from customized products to customized
relationships the implications are immense.
•In a wired world customers are in charge and any relationship must be
established on their terms.
•If you apply customer knowledge to each transaction the outcome can
be unique experience for each customer.
Building a Relationship Brand
• While the products of the company will come
and go, the relationship created between
company and customer can establish a lasting
bond.
Reflect.com
• Sells cosmetics, all which are designed online by
the customer.
• Begins the relationship by answering series of
questions.
• Customers can even choose the colors of the web
site itself.
• It is backed by Procter & Gamble.
• The data gathered from customization process is
extremely valuable to P&G
– Primary market research to understand what makes a
person buy
Reflect.com
• “When you treat a customer as an individual, it is
no longer marketing, it is a relationship.”
• If a customer creates a product and doesn’t like it,
we will re-customize it free of charge.
– They mail a sample of what they produced.
• In house customer service and fulfillment.
– We want to own all the touch points.
• We believe a truly loyal customer is someone who
is evangelist of the brand.
Reflect.com
• Everything it does continually generates
more knowledge to drive its future decision
making.
• Reflect.com had to create an affordable way
to manufacture a different product for each
customer and even filed for a patent on its
customized manufacturing infrastructure.
Make Your Interactive Process
become the Product
• Process as product from consumer perspective.
• Lands End, $1.3 billion
• Utilizes online shopping:
– benefit the consumer
– to add profit to the company's bottom line.
• You put your measurements and a model like
you will appear.
LANDS’END
• Already the largest seller of clothes online
anywhere in the world
• Strategy does not involve competing on price $70,000,000
or other than providing other than the usual
retailing promotions and incentives. $60,000,000
$50,000,000
• Why is Lands’ end so successful
$40,000,000
• Marriage of technology and customer $30,000,000 Sales
experience online and offline world.
$20,000,000
• First innovation was the personal model.
– During first 6 months 1.6 million $10,000,000
women came to the site and created $0
computer generated models. 1st 2nd 3rd
• Shoppers talk directly to the CSR. Year Year Year
• CSR average 9 year experience
A Marketing Strategy
without an
interactive component,
is NO marketing strategy at all.
Platform as a Brand
• Michael Dell understands the concept of
process as product.
• This understanding that made Dell into the
world leader in selling PC.
E-branding
• Connect with end customers
– Bring prospects and customers to the site and introduce
them a genuinely rewarding experience that keeps them
coming
• Drop Brand Baggage
– GTE Genuity, Bell Atlantic Verizon
– The chance for a new relationship, a new brand
experience that it expects will create even greater brand
equity in the Net future.
• Try Verb branding
– Xeroxing
– Amazoning “Amazon the book to his colleague”
Brand Experience
• Brand experience is no longer limited to experience of the product or service
alone.
• It extends to experience of the company as a whole.
• The FV of the Enterprise is equal to the sum of the brand value and the
relationships value
Brand Experience = Experience of the product / Service
Brand Experience = Experience of the Company as a whole
FV of the Enterprise = Brand Value + Relationship Value
Wall Streets Footprint on the
Brand
• More and more Americans owning stock, how wall Street
rates a business becomes part of the brand image of the
company.
• CNBC, CNNfn, and web investment chat rooms, Wall
streets perception is an increasingly important part of Main
Streets perception of the brand
• More than ever before, the company itself is seen very
much like a product.
• Corporate management will be increasingly pressed to
focus not only on the customer but on all of the
stakeholders.
Stakeholders can include
• Customers
• Employees
• Managers
• Distributors
• Business partners
• Suppliers
• The Shareholders
Brand Experience leads to FV
• Brand experience directly affects the relationship
between company and customer and contributes to
the long term FV of the business
• Satisfaction with the product being branded (P)
• The interactive contact experience a customers has
with it (C)
• Interaction of those two elements over multiple
contacts in multiple contexts over time (T)
• What are others saying about the product (O)
Brand Experience
• Brand Experience = (Product quality +
Contact quality + Others opinions ) * Time
Brand Experience = ( P + C + O) * T
Spheres of Influence
Sales
Staff
The
Customer
Other Competitors
Customers
Brand Perception v.s. Brand Experience
• Created largely by broadcasting one way • Created largely by direct contact
message
• Once established is more lasting
• More easily changed
• Often develops over multiple contact
• Developed by saturation,concentration,
points and interactions
repetition the brand message
• Negative experience is difficult to
• Changes by changing the ad agency
change
• Company has more control
• Company has less control
• Involves indirect feedback • Involves direct feedback
Amazoning
• It can be ordered with one click.
• It will be the right product.
• The sender will receive notification.
• The billing will be correctly charged to the buyers credit card.
• A package tracking mechanism will be in place and available to the buyer.
• If there is a problem, it can be fixed by simply sending an email to
Amazon.com or calling Customer Service.
It is this processing platform that allowed Amazon.com to expand into selling
other products such as CD’s, toys, recreational equipment,electronics
Jeff Bezos realized early that the customer experience was more valuable
than the products themselves.