This cycle produces new or updated products and services. With Strategic Interactive Marketing (SIM) it is possible to start at a low key level, simply by pushing existing products down the new mediums, perhaps simply using the new medium for product information. This again equates to the Mass Information stage of the Customer Relationship Cycle. However, unless one is taking a low cost strategy which can be sustained in the face of similar actions by competitors, then this approach is not recommended.
Ideally, new products and services should be developed that exploit the power of the new interactive mediums and meet the needs of your most profitable customers. At the same time they need to be competitive in the market place. This competitiveness is increasingly less likely to be on price alone, but rather through product features and service delivery.
Joseph Pine, in his book Mass Customization, contrasts the Old Ways of Mass Production with the New Ways of Mass Customisation. There is an emphasis on high-quality, small scale flexible production, fast NPD, co-operative and innovative organisational cultures, and much more.
Most industries are experiencing an ever decreasing product development cycle,
but with SIM this is accelerated to what may appear to be extreme levels.
Product and service development is less sequential. Rather it is dynamic,
reinforced by Dynamic Systems Feedback
Loops, many of which are derived directly through
consumer interactions using the new mediums.
Click the diagram to see it enlarged.
|One way to address the demands of a faster product/service development cycle and to meet customer's individual needs is to develop components (or modules) rather than full blown products. Then through a process of Mass Customisation, shift the final product design to the customer, who in return obtains the specific product or service he or she needs. Pine defines 6 types of modularity as shown in the table, along with examples from the Financial Services industry.||Pine's 6 Types of Componentisation
with Financial Services Examples
|Component-Sharing||Payment by Credit Card|
|Cut-to-Fit||Level of cover.|
|Mix||Credit Card properties|
|Sectional||Universal Variable Life|
Because of the intangible nature of financial services products, and also the dependence on Information Technology, Component Based Development plays an key role in the Mass Personalisation and Mass Customisation stages of the Customer Relations Cycle.
A Component Based Approach introduces a new paradigm to Product/Service Development. (Click the diagram to see it enlarged).
Stage 1 is to Develop Components rather than complete products. These components need to be design with modularity in mind and then to well defined so that they can be exploited in many situations. With SIM, these component could well be used by customers, so the definition will include appropriate textual descriptions and perhaps pictures and even video.
However, before the components can be offered to customers, various assembly rules need to be defined. These rules ensure that customers can only design and purchase products that are legally valid and within the company's marketing and administrative limits. Examples include such items as minimum levels of cover, premium payment methods, and legal protection being only valid on general insurance products. Follow the link for more general information about Rule Based Approach.
In stage 3, Marketing must now promote both the component, the benefits of customised products, and the all important process that facilitates Customer Acquisition. To assist customers in learning and using this approach, marketing could well define sample assemblies for typical customers (if such people exist anymore!).
"Finally" there is an ongoing process of refining both the component, the assembly rules, the marketing promotional activities, and all the downstream activities, such as the Customer Acquisition process, which will be covered in the following pages.
However, before considering these we need to define where we wish to be on the Customer Relationship Cycle.
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