19 Holistic Marketing Orientation and Customer Value

Bhagwan Singh

LEARNING & INSTRUCTIONAL OBJECTIVES

At the end of this chapter, learner should be able to:

Understand the importance of Holistic Marketing
Define Holistic Marketing
Define Customer Value
Know about components of Holistic Marketing
Understand the various holistic marketing orientation and customer value
Understand benefits of Holistic Marketing Concept
Gist / Summary of the Module
Review questions

1. INTRODUCTION

Holistic means wholeness. When wholeness i.e. everything from top to bottom or bottom to top, is thought about marketing of products or services is termed to be holistic. Holistic marketing is a new paradigm shift of marketing management and the series on concepts of marketing and it can be said as a marketing strategy which deems business as a complete and not as an entity with diverse parts.

According to holistic marketing concept, even if a business is made of various departments, the departments have to come together to project a positive & united business image in the minds of the customer. Holistic marketing concept involves interconnected marketing activities to ensure that the customer is likely to purchase their product rather than competition.

The Chief Marketing Technologist Scott Brinker explains that if one wants to evidence just how sweeping and fragmented “Marketing” is, try making a list of each and every marketing present out there. It starts with search marketing, e-marketing, product marketing, viral marketing and the like. And these phenomena of 131 different types of marketing being able to look at the bigger picture of marketing and perceive the forest for the tree when making decisions about what type of marketing tactics one plans to follow for marketing. In short “Holistic Marketing” is to take everything into account that affects particular marketing strategy or tactics or plan or approach rather than to just look at it as discipline. An organization possesses different departments like:

Marketing and Sales (M&S)
Accounting & Finance (A&F)
Operations & Production (O&P)
Human Resource (HR)
Research & Development (R&D)

The holistic marketing takes place in the organization only if, R&D and O&P takes the feedback from M&S to launch the product which will almost certainly attract customers, asking the revenues and expenditure from A&F and consulting HR for employability and retention of suitable persons in the organization.

Samsung is one of the examples of holistic marketing where the customers are kept in mind while developing products and services provided by them are polite and quick.

Henceforth, following Holistic Marketing one gets the right product at proper price with appropriate profits. Along with this one gets the right customers who will market one‟s product in proper manner. If companies follow it then they may be sure that right customer will be purchasing their product demanding the brand of that company. By following this product and brand stands firm and has better chance to be successful than by working on individual elements or departments without the vision of being holistic.

The main element or key driver of Holistic Marketing is communication. The work of communication is to send right message to the right audience at right time. This has to be taken care while going for the vision of Holistic Marketing.

2. DEFINITION: HOLISTIC MARKETING

Philip Kotler and Kevin Lane Keller define this holistic approach as follows: “A holistic marketing concept is based on the development, design and implementation of marketing programs, processes and activities that recognize the breadth and interdependencies. Holistic marketing recognizes that ‘everything matters’ with marketing and that a broad, integrated perspective is necessary to attain the best solution.”

Holistic marketing originated as a response to fundamental changes in the current marketing environment and is probably the newest approach to marketing and the latest business concept. Holistic marketing concept inculcates all elements of marketing mix 7P, closely related to the marketing mix 4C and web marketing mix 4S.

“Holistic marketing” is a new marketing paradigm, as it provides new avenues of looking at a business. The idea of Holistic marketing depends on creating, configuration, and execution of advertising projects, procedures, and exercises that perceive their broadness and interdependencies. Holistic marketing sees to ‘everything matters’ with marketing.

In Holistic Marketing everything of a business & marketing matters like its place in economy, society and in lives of its customers. It aims at developing and maintaining different business activities. It aims that the brands and products are interdependent and strongly bind together along with the stakeholders of organization.

Thus, everything matters under the umbrella of holistic marketing. Due to increase in the competition and a large amount of information available the new marketing paradigm has shifted the emphasis from product and production, to selling, then integrated marketing within the holistic marketing concept.

3. DEFINITION: CUSTOMER VALUE

Customer value is the satisfaction which consumer feels after making a purchase for goods or services relative to what (s)he must give up to receive them. Customer value means low priced, receiving what is desired and receiving quality on payment.

It has two aspects: desired value and perceived value.

Desired value refers to what customer‟s desire in a product or service.
Perceived value is the benefit that a customer believes he or she received from a product after it was purchased.

When the organizations understand the customers‟ values then they develop products and services providing higher profit-potential for the business. The organizations may have certain criteria‟s for judging customer value stated below:

Do the company products and services deliver the same as promised?
Has the company delivered the promises made in the past and will it deliver the same in future?
How services and products offered by the company will benefit the customers?
What the customers understand about the value of services and products offered?
What will be the impact on the customers of these services and products offered?

3.1 There are four steps to quantify the customer value

3.1.1. Can we increase the customer revenue?

3.1.2. Can we decrease the customer total cost of ownership?

3.1.3. Can we minimize the customer total requirements?

3.1.4. Can we reduce customer‟s risk?

Fig-1: Source: http://www.aftermarketeurope.com/wp-content/uploads//2013/08/customer value2. jpg

3.2 The customer value delivery process

Table: 1: Source: http://timreview.ca/article/525

Thus customer value can be delivered if a company works on:

Providing the consumer with the best cost.
Providing the consumer with the best product.
Providing the consumer with the best service.

4. COMPONENTS OF HOLISTIC MARKETING

Broadly there are four main components of holistic marketing are:

4.1. Integrated Marketing.

4.2. Internal Marketing.

4.3. Performance Marketing.

4.4. Relationship Marketing.

Fig-2: Source: http://ftp.repec.org/opt/ReDIF/RePEc/rau/homkmg/SP11/HOMKMG-SP11-A6.pdf

4.1 Integrated marketing – Products, services and marketing of the organization should work hand in hand towards to growth of the organization. Communication channel should be communicating and delivering the intended value to the targeted or chosen customer. The major components of integrated marketing are:

Products
Services
Communication Channels

From a customers‟ point of view, each and every marketing tool should be designed to convey customer benefit. It can be seen by the view of customer query based on AVIS:

Access: Where can “I” find it?
Value: What is “MY” total or actual sacrifice to get this result?
Information: Where can “I” learn more about it?
Solution: How can “I” solve my problem or need?

It could be further extended for

Internal Customers

One who is in direct connects to an organization, and is usually internal to the organization like stakeholders, employees.

External Customers

One who uses a company’s products or services but is not part of that organization.

4.2 Internal marketing – Marketing coordination between all the departments in an organization.

Senior Management
Marketing Department
Other departments

4.3 Performance marketing – Reducing costs and increasing sales so as to drive revenue growth of the organization holistically.

Brand and Customer Equity
Community
Environment
Ethics
Sales revenue

4.3.1 Social responsibility Marketing

Act socially responsibly;
consider the ethical consequences of one‟s actions;
Focus on satisfying customer needs

a) The Community

b) Ethics

c) Environment

d) The Legal Perspective

Fig-3: Element of Social Responsibility Marketing (Source: Author Created)

4.4 Relationship marketing – Building a better relationship with your internal and end customers.

Channel Partners
Channel Customers

Relationship Marketing is based on:

– Developing Marketing Networks

– Using CRM

Maintaining customer relationships by delivering superior customer value and satisfaction
Using information to create marketing strategies that develop and sustain desirable customer relationships
Establishing long-term relationships with buyers and sellers

4.4.1 Share of the Customer

The portion of the customer‟s purchasing in its product categories that a company gets.
Methods to increase share of customer

– Offer different products to current consumers

– Train employees to cross-sell and up-sell in order to market more products and services to existing customers.

4.4.2 Customer Satisfaction

The extent to which a product‟s perceived performance matches a buyer‟s expectation.
It can be achieved better if the company aims at delighting the customer by promising only what they can deliver, then delivering more than they promise.

5. HOLISTIC MARKETING ORIENTATION AND CUSTOMER VALUE

When all the departments work together to make customer happy, then the purpose of Holistic Marketing is solved. In this customer is really a “KING” and not a customer who is “CUST-SE-MAR” means die with all problems. The Holistic Marketing framework is such that customer value has its own relevance.

The problems of customers are addressed in such a way that customers get the full value they have spent for services or the product.

The holistic marketing framework is designed to address three problems:

i. Value Exploration

ii. Value Creation

iii. Value Delivery

5.1.1 Value exploration: How can a company identify new value opportunities?

By an understanding of the relationships and interactions, the companies need a precise strategy for value exploration among three spaces:

5.1.1.1 The collaborator’s resource space.

5.1.1.2 The company’s competence space

5.1.1.3 The customer’s cognitive space

5.1.2Value creation: How can a company efficiently create more promising new value offerings?

The company needs value-creation skills to exploit a value opportunity. The Marketers need to recognize new customer gains from the customer’s view. It involves three steps:

5.1.2.1 defining or redefining the business concept

5.1.2.2 positioning or repositioning the company’s brand identity

5.1.2.3 shaping or reshaping the business scope

5.1.3 Value delivery: How can a company use its capabilities and infrastructure to convey the new values proficiently?

Case Study of Chik-flick-A:

A video is worthwhile watching put on website of mhhe.com can make us understand the various holistic marketing orientation and customer value regarding restaurant marketing chicken.

I acknowledge them and thank them for posting these types of videos which may be used for explaining the Holistic Marketing also.

http://lectures.mhhe.com/media/0078028981/Video_Cases/ChickfilA.m4v

6. BENEFITS OF HOLISTIC MARKETING CONCEPT

Attracting New Business Entities
Better Customer Satisfaction
Creating the Right Environment Strategies for Achieving Success
Differentiating from the Rivals Competitors
Growing Awareness of the Business

Fig-4: Source: http://www.kathrynmcmann.com/what-is-holistic-marketing/

The above figure explains that the organization, its business resources and processes are coordinated with communication and media channels to provide Consumer Brand Relationship. They indicate:

1. Business resources and processes which includes different departments of organization like:

a. Finance

b. Human Resource

c. Information Communication Technology

d. Legal

e. Personal Relationship and Marketing

f. Sales

2. Brand Campaign Project

3. Communication and Media Channels

a. Customer Care

b. Information on Mobile

c. Word of mouth

4. Consumer brand relationship

6.1 Holistic Marketing Concept’s core principle benefits

It brings various departments and services together for effective communication to stakeholders. It helps in designing flexible and responsive market strategies. It also helps in managing the projects across multiple marketing channels to give a reliable knowledge and experience to customers by offering effective communications and efficient internal management for external smooth delivery and rationalizing the channels of communication for developing integrated marketing strategies.

The points to be remembered under Holistic Marketing core principle benefits may be:

Departments and services working together for effective communication to stakeholders
Designing flexible and responsive market strategies
Developing integrated marketing strategies
External smooth delivery
Give a reliable knowledge and experience to customers
Managing the projects across multiple marketing channels
Offering efficient & effective communications
Offering efficient internal management
Rationalizing the channels of communication

6.2 Why does Holistic Marketing Matters

There are a number of reasons why holistic marketing is essential for business:

1. Consistency in business

2. Efficiency in business

a. addressing problems

b. efficient work flow

c. greater communication and collaboration

3. Making the business effective

a. Reinforcing the brand

b. Keeping everybody‟s focus on the big picture instead of sub-group priorities or individual closing thoughts.

6.3 Holistic Marketing elements that give benefits if closely monitored:

6.3.1. Marketing Mix 7 Ps

a. Packaging

b. People

c. Physical evidence

d. Place

e. Price

f. Product

g. Promotion

6.3.2. Marketing Mix by 4 Cs

a. Convenience / Channel (instead of Place of 4Ps)

b. Cost (instead of Price of 4Ps)

c. Customer Solution (instead of Product of 4Ps)

d. Communication (instead of Promotion of 4Ps)

6.3.3. Web Marketing Mix 4 S

a. Scope

b. Site

c. Synergy

d. System

7. GIST / SUMMARY OF THE MODULE

By practicing the holistic marketing approach the organizations or firms can realize about what it should make than what it can sell, instead of trying to sell what it can make. As change is basic human tendency and every person expects new things according to changes happening in surroundings. Holistic marketing forces the manufacturer to produce several products with different size, color, quality as expected by the consumer. But the monotonous production will not convert customers all times so change is must to all the products to standardize the market as per holistic orientation. Companies must also take note of the customers and become skilled at understanding customer needs and preferences, in order to enhance the customer satisfaction for its value and experience.

In short “Holistic Marketing” is to take everything into account that affects particular marketing strategy or tactics or plan or approach rather than to just look at it as discipline. An organization possesses different departments like:

Marketing and Sales (M&S)
Accounting & Finance (A&F)
Operations & Production (O&P)
Human Resource (HR)
Research & Development (R&D)

8. REVIEW QUESTIONS

A. Multiple Choice Questions

1. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization‟s products.

a) Production

b) Selling

c) Marketing

d) Holistic Marketing

2. _________________ depend(s) on a product‟s perceived performance in delivering value relative to a buyer‟s expectations.

a) Customer satisfaction

b) Customer quality

c) Customer value

d) Customer needs

3. ________ is the difference between the prospective customer‟s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

a. Perceived usefulness

b. Failure avoidance rate

c. Report rating

d. Customer perceived value

4. When a consumer considers a product or service, he or she will choose whichever product or service delivers the highest ________.

a. Customer perceived value

b. Customer perceived cost

c. Consumer discount

d. Consumer relationship

5. The task of a business is to deliver ________ at a profit.

a. Customer needs

b. Customer values

c. Products

d. Products and services

6. Holistic marketers achieve profitable growth by expanding customer share _________ and capturing customer life time value

a. Building customer loyalty

b. Renewing a customer base

c. Undermining competitive competencies

d. Inspecting all market share data

7. ________ can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breadth and interdependencies of their effects.

a. Niche marketing

b. Holistic marketing

c. Relationship marketing

d. Supply-chain marketing

8. What does NOT come under the 4Ps?

a. Product

b. People

c. Place

d. Price

9. What does NOT come under the 4Cs?

a. Cost

b. Concession

c. Convenience

d. Communication

10. The holistic marketing framework is designed to address three problems. One of them is ______

a. Value Consumption

b. Value Co-ordination

c. Value Creation

d. Value Perception

B. Short Questions & Answers

11. What are the elements of Social responsibility marketing?

Ans: Four elements of Social responsibility Marketing

a) The Community

b) Ethics

c) Environment

d) The Legal Perspective

12. Indicate what are the benefits of Holistic Marketing Concept?

Ans: Benefits of Holistic Marketing Concepts are:

1. Attracting New Business Entities

2. Better Customer Satisfaction

3. Creating the Right Environment Strategies for Achieving Success

4. Differentiating from the Rivals Competitors

5. Growing Awareness of the Business

C. Long Questions & Answers

Question: Explain holistic marketing framework designed to address problems.

Ans: The holistic marketing framework is designed to address three problems:

Value Exploration
Value Creation
Value Delivery

i. Value exploration: How can a company identify new value opportunities?

By an understanding of the relationships and interactions, the companies need a precise strategy for value exploration among three spaces:

1. The collaborator’s resource space.

2. The company’s competence space

3. The customer’s cognitive space

ii. Value creation: How can a company efficiently create more promising new value offerings? The company needs value-creation skills to exploit a value opportunity. The Marketers need to recognize new customer gains from the customer’s view. It involves three steps:

5.1.2.4 defining or redefining the business concept

5.1.2.5 positioning or repositioning the company’s brand identity

5.1.2.6 shaping or reshaping the business scope

iii. Value delivery: How can a company use its capabilities and infrastructure to convey the new values proficiently?

9. REFERENCES: Books Referred

Kotler Phillip and Keller Kevin, Marketing Management (14/E), Pearson Education Inc. New Jersey, 2011
Kotler Phillip and Armstrong Gary, Principles of Marketing (Version 12/E). Pearson Education Inc. New Jersey, 2006
Kotler Philip, Burton Suzan, Deans Kenneth, Brown Linen , Gary Armstrong, Pearson Higher Education, AU, 2013
Kumar Arun & N Meenakshi, Marketing Management, 2/e, Vikas Publication, New Delhi, 2011

Websites Referred

https://managementmania.com/en/marketing-mix-4c
https://managementmania.com/en/holistic-marketing-concept
http://www.marketing91.com/holistic-marketing-concept/
https://tiffanyabrown.wordpress.com/what-is-holistic-marketing/
http://www.slideshare.net/srikirthi/holistics-marketing2?related=1
https://www.act-on.in/whitepaper/introduction-to-building-a-holistic-marketing-strategy/
http://www.kathrynmcmann.com/what-is-holistic-marketing/
http://www.wheelhouseadvisors.net/what-is-holistic-marketing-and-why-does-it-matter/
http://holisticpr.com/press/the-need-for-holistic-marketing.pdf
https://www.act-on.com/whitepaper/introduction-to-building-a-holistic-marketing-strategy/
http://www.marketing91.com/holistic-marketing-concept/
http://www.citeman.com/382-a-holistic-marketing-orientation-and-customer-value.html
http://marketinginfoz.blogspot.in/2013/10/a-holistic-marketing-orientation-and.html
http://timreview.ca/article/525
http://www.houstonbusinessimageconsultants.com/trad_marketing.htm
https://www.google.co.in/search?q=define+customer+value&oq=customer+value+&gs_l=serp.1. 2.0i67j0i7i30l2j0i67j0j0i67l2j0i7i30l3.217658.220334.0.222463.3.3.0.0.0.0.155.295.0j2.2.0….0…1c.1.64.serp..1.2.295.PYMe8v_7k60
http://www.businessweek.com/smallbiz/tips/archives/2008/05/delivering_value_to_your_custome r.html