Marketing Management assigment 750-900 words

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Social Media

13. 1

Marketing Framework

Social Media

• Social media • People interacting and connecting with

others via online software or alternative electronic access technologies

• Traditionally, customers were recipients

• With social media, customers now have dialogue with brands

• Customers post endorsements and vent

• Marketers have less control

Word of Mouth

• Social media facilitates word of mouth • Word of mouth is powerful; more credible

• “Viral”; “buzz”

Word of Mouth

• Word of mouth works well with • Exciting products

• Clever ad campaigns • Humor, free give-aways, social causes

– e.g., Geico Gecko has Facebook friends

• Extraverted consumers • Consumers with large social networks

Social Networks

• Sociogram: networks in graphical form • The set of actors and relational ties

• Actors may be customers, firms, brands, etc.

• Ties can be symmetric • e.g., Joe and Sally are co-workers

• Ties can be directional • e.g., Joe likes Sally

• Ties vary in strength

• Network analysis requires tabular representation (sociomatrix)

Identifying Influentials

• Centrality: Number of connections each actor has with the others • Centrality index

• Central = many links

• Peripheral = fewer links

Identifying Influentials

• Cliques • Groups of people in a network

• Common in brand communities, affinity groups, cell phone friends, etc.

Recommendation Systems

• Recommendation systems • Data of purchase patterns or ratings are

aggregated over many people • Customers trust online recommendations

• It is more authentic than advertising

Social Media ROI

• Social media seems “free” but is not • It requires thought and labor

• Key performance indicators (KPIs) • Reach, frequency, monetary value of

customers, customers’ behaviors, attitudes, memory, etc.

Social Media ROI: Awareness

• Pre-Purchase: Awareness • Reach can be achieved via

• Traditional media & online – e.g., Magazine tells reader to learn more by

going to a particular web page

• Online – e.g., Web ads, search engine status, etc.

• Media that optimize reach • Tweets, Facebook, contests on Youtube, not

expert blogs, webinars, or podcasts

Social Media ROI: Brand Consideration

• Pre-purchase: brand consideration • Offer more information to build knowledge &

persuade

• Use media that give more content • e.g., Search engine ad placement, podcasts,

post information in brand community, give customer testimonials, etc.

Social Media ROI: Brand Consideration

• Pre-purchase: brand consideration • Search engine optimization (SEO)

• Consumers search when they don’t have a preferred brand

• Keywords depend on customer knowledge

• To improve SEO • Put meaningful keywords in web page title

• Order the words with most important first

Social Media ROI: Brand Consideration

• Pre-purchase: brand consideration • Key web analytics

• Frequency: number of visits and number of unique visitors

• Duration: time spent per page and overall time spent on the site

– Bounce rates: percent of one page visits

– Conversion rates: when a visitor transitions from a looker to a doer

Social Media ROI: Purchase/Behavior

• Purchase or Behavioral Engagement • Induce any action that engages the

prospective customer • What do they open, what do they download?

• Do they watch demos that may be available?

• How much time are they spending on which purchase-related pages?

• Do they register to subscribe to newsletters?

• Instead of “Contact Us” marketers prefer forms that capture specific information

Social Media ROI: Purchase/Behavior

• Purchase or behavioral engagement • Numbers of posts, etc.

• Audience build: incoming links and the speed of that growth

• Conversion rates: frequencies of web visitors to engage in the focal behavior relative to the number of visitors who come to the website

Social Media ROI: Purchase/Behavior

• Costs of the actions depend on goals • Estimates of acquisition costs; payment for

placement in search engines or banner ads, sending emails from a rented address database, etc.

• Effectiveness of actions can be assessed through • Frequencies, rates and durations

ROI for Social Media: Post-Purchase

• Post-Purchase • Satisfied customers

• Customers may post positive reviews, give endorsements, etc.

• Dissatisfied customers • Company can read complaints, address

issues, give incentives, etc.

How to Proceed

• Engaging in all social media is not desirable • Social media require maintenance and

constant activity

• Some media fit the target market better than others

How to Proceed

• Companies can learn from • Monitoring tweets, blogs and discussions

• Analyzing text on Facebook to understand customers opinions about brands

• Search brand page or search for brand name on other postings

• Analyzing content to detect consumer trends

• Checking websites for misinformation

How to Proceed

• Companies can actively • Enter online communities and ask for

volunteers for beta testing

• Conduct experiments: measure attitudes, click through rates, sign-up rates, etc.

• Use GPS data to track customers and give offers

Managerial Recap

• Social media are web-based means of interacting with others by posting opinions, pictures, and videos

• Social media usage is growing

Managerial Recap

• Word of mouth feels authentic making social networks important

• Social networks are interconnections among customers • Networks can be drawn and analyzed

Customer Satisfaction and Customer Relationships

14. 24

Marketing Framework

Customer Evaluations

• Customer evaluations include: • Customer satisfaction

• Perceptions of quality

• Customers’ intentions to repurchase

• Customers’ likelihood of word-of-mouth, etc.

• Marketers track these evaluations because they impact the bottom line

Customer Evaluations

Evaluation Outcomes

• If customers’ experiences • Surpass their expectations delighted • Meet their expectations satisfied • Fall short of their expectations dissatisfied

• Low-involvement purchases • Evaluation is instantaneous

• Expectations are usually latent

• Higher-involvement purchases • Evaluation is deliberative & conscious

Customer Evaluations

• Search goods • Evaluation is straightforward

• Experience purchases • Evaluation completed after trial/consumption

• Expectations might not be fully formed; the experience shapes evaluation & expectations

• Credence purchases • Don’t have expertise to evaluate

• Evaluate what one can (price, looks, etc.)

Sources of Expectations

• Self • Consumers trust their own experience

• Experience can be direct or indirect

• Friends and experts • Trust those with no commercial gain

• Marketing mix • Ads, price, retail atmosphere, etc.

• Third party communications • e.g., Consumer Reports, books, Internet, etc.

Expectation and Experience

• The core (hygiene factors) and peripheral components (motivating factors) of a product both contribute to satisfaction • If the core is good, it doesn’t enhance

satisfaction much because it is expected to be good

• If the core is bad, it can affect dissatisfaction

• Peripheral services can affect both

Expectation & Experience: Flowcharts

• Marketers create flowcharts which map all of the interactions between the customer and company • From the eyes of the customer

• Flowcharts are used to • Generate quality measures at each stage

• Identify points of repeated problems

• Suggest system redesigns to improve efficiency

Types of Expectations

• Ideal levels of quality

• Predicted levels of quality

• Adequate levels of quality

• Zone of tolerance exists between the adequate and predicted levels of quality

Customer Value

• Value • The tradeoff of the quality of the purchase

received compared to the price paid and other costs incurred

• Marketers try to increase perceptions of value

Expectations

• Expectations are dynamic • What pleased a customer last time may no

longer suffice

• Expectations vary cross-culturally • In individualist cultures, satisfaction is

heavily influenced by quality of reliability and service provider responsiveness

• In collectivistic cultures, satisfaction is heavily influence by the relational aspects of front-line employees

Measurement

• Measuring quality with precision is difficult

• Customer perceptions can be measured with surveys • Compare results to previous or competitive

benchmarks

• Surveys that measure multiple facets of customers’ thoughts are more actionable

Customer Dissatisfaction

• The primary means to regain a dissatisfied customer is through empowered frontline employees • Immediately redress the problem

• Empathize with customer

• Offer a perk for customer’s troubles

Customer Relationship Marketing

• Customer satisfaction is 1st step in CRM

• Loyalty programs • Price discounts may keep customers

from defecting while inducing additional purchasing

• Some companies may assume loyal customers are price insensitive and charge them more

Customer Relationship Marketing

• CRM programs track customer information including RFM information • Recency, frequency and monetary values

• These factors are used to “score” customers in order to determine the most desirable customers

Customer Database Information

• Customer contact information

• Customer demographics

• Customer lifestyle/psychographic data

• Internet info

• Transaction data (RFM, etc.)

• Rate of response to marketing offers

• Complaints, etc.

CRM

• CRM programs • Take planning and money

• Require ongoing customer monitoring

• Companies struggle with: • Designing programs with appropriate inputs

from all relevant customer touchpoints

• Utilizing information to develop useful, managerial actions

Lifetime Customer Value

• Companies utilize Customer Lifetime Value (CLV) to assess customers in terms of their worth to the company • Some customers are costly to acquire,

others more costly to retain

Customer Lifetime Value

Managerial Recap

• Quality and customer satisfaction can be precisely measured for goods, but not as easily for services

• Surveys can be used to ask customers for their evaluations

• Marketers care about loyalty and customer relationship management

Managerial Recap

• Customer Lifetime Value is a means of translating marketing efforts in financial results

• CLV allows firms to match customer benefits to revenues to ensure each customer relationship remains profitable