Transcript Product, services, personnel, and image value

Creating Customer Value, Satisfaction,
and Loyalty (Chap. 5)
Customer Perceived Value =
Total Customer Value – Total Customer Cost
______ – product, services, personnel, image
______ – monetary, time, energy, psychic
What is the cost of holiday shopping?
Applying Value Concepts
Providing the Most Perceived Value for the
Customer
Increasing the following ratio:
Applying Value Concepts
Product, services, personnel, and image value (benefits)
Monetary, time, energy, and psychic costs
Application:
Increase total customer value or decrease total
customer cost
Compare with competitor’s offering
Customer Satisfaction (p. 145)
A highly satisfied customer:
● stays loyal longer,
● buys more as the company introduces new
products and upgrades existing products,
● talks favorably about the company and its
products,
● pays less attention to competing brands,
is less sensitive to price,
● costs less to serve than new customers
Customer Satisfaction (p. 145)
Measuring Satisfaction:
Customer satisfaction surveys
Customer loss rate – why?
Mystery shoppers
“Would you recommend this product or service to
a friend?”
Maximizing Customer Value
A profitable customer: over time yields a revenue
stream that exceeds by an acceptable amount the
company’s cost stream of attracting, selling, and
servicing that customer (p. 149)
For unprofitable customers:
Maximizing Customer Value
Customer Relationship Management (CRM) –
managing detailed information about individual
customers and carefully managing all customer
“touch points” to maximize customer loyalty (p.
152)
Hotel touch points: reservations, check-in, checkout, room service, laundry service, restaurants
Example
Traditional Marketing
Loyal Customers (20%) account for 80% of
sales. A majority of customers are deal
seekers(50%) and they account 5% of your
sales. Therefore, when retailer offers storewide discount, profits are low.
Example
Traditional Marketing
Resources expended
Loyal
Deal
seekers
Example
Customer Focused Marketing
Loyal Customers (20%) account for 80% of sales. A majority
of customers are deal seekers (50%). They account for 5%
of your sales. Therefore, when retailer focus on loyal
customers, profits are high.
Free turkey offered for those that spend 500.00 or more the
previous two months before Thanksgiving. Number of
customers spending 500.00 or more increases by 25%.
Profits are up. Customer loyalty is higher.
__________________________________________
Example
Customer Focused Marketing
Resources expended
Loyal
Deal
seekers
Customer Relationship Management
Summary (p. 153-154)
• Identify your prospects and customers.
• Differentiate customers in terms of (1) their needs
and (2) their value to your company.
• Making low-profit customers more profitable or
terminating them.
• Focusing disproportionate effort on high value
customers.
Etc.
Analyzing Consumer Markets (Chap. 6)
What influences consumer behavior or why do we buy the
things we buy?
Culture: the fundamental determinant of a person’s wants and
behavior.
Subculture: nationalities, religions, racial groups, and
geographic regions.
Social Classes: relatively homogeneous and enduring
divisions in a society, which are hierarchically ordered and
whose members share similar values, interests, and
behavior
Analyzing Consumer Markets (Chap. 6)
What influences consumer behavior or why do we buy the
things we buy?
Culture: the fundamental determinant of a person’s wants and
behavior.
Subculture: nationalities, religions, racial groups, and
geographic regions.
Social Classes: relatively homogeneous and enduring
divisions in a society, which are hierarchically ordered and
whose members share similar values, interests, and
behavior
Consumer Behavior
Why do we buy the things we buy?
Cultural factors
Social factors - reference groups
Personal factors - age, lifestyle
Psychological factors - beliefs, attitudes
Chapter 7
Analyzing Business Markets
A business seller (supplier) is seeking ways to
improve relations with the business
customer. What will this entail?
Overview
Know your customer
Company
Company
Characteristics of Business Markets
(p 210-212)
• Professional purchasing: business goods
purchased by trained agents who follow their
organization’s purchasing policies
• Several Buying Influences
• Derived Demand
• Etc.
Offering
service to business buyers
Business Buying Situations
Straight rebuy – routine re-ordering; just-in-time
inventory is practiced. EX:
Modified rebuy – consider alternatives before
buying; routine purchase has changed. EX:
Modify product specifications, prices, delivery
requirements, etc
New Task Purchase – large investments; extensive
information search; formal decision process.
EX:
Business Buying Situations
Implications:
• Build reliability and trust
• Exceed competition – why should they buy from you?
What do your customers
?
• Understand influences and process by which organizations
buy their products. How are decisions made?
• Corporate credibility – extent to which customers believe
that a firm can design and deliver products and services
that satisfy their needs and wants (p. 228)
Chapter 8
Identifying Market Segments and Selecting
Targets
Overview- target marketing
1. Identify and profile distinct groups of buyers
who differ in their needs and preferences
________________________________
2. Select one or more market segments to enter
______________________________
3. For each target segment, establish and
communicate the distinctive benefit(s) of the
company’s market offering ________________
Overview
Effective Segmentation (p. 262)
Measurable:
Size, purchasing power, profiles of segments can be
measured.
Substantial:
Segments must be large or profitable enough to serve.
Accessible: Segments can be effectively reached and served.
Differentiable: Segments must respond differently to different
marketing mix elements & actions.
Actionable:
Must be able to attract and serve segments
Effective Segmentation
Substantial/Differentiable
1. How
people are in this market?
2. How frequently will they purchase?
3. What market share can we expect?
4. What is the
?
5. How satisfied are current customers with current
offerings?
Effective Segmentation
Accessible/Actionable
1. Can this segment be reached with current
distribution channels?
2. Can we establish new channels efficiently, if
needed?
3. What promotion media does this segment read,
listen to, or watch?
4. Can we afford to promote to this segment and is
there a media to reach them?
Segment Marketing
Market segment: large, identifiable group within a
market with similar wants, purchasing power,
geographical location, buying attitudes, or buying
habits
- low cost
- transportation
- luxury; driving experience
Niche Marketing
Niche marketing:
Niche: a more narrowly defined group seeking a
distinctive mix of benefits; has size, profits, and
growth potential
Distinct set of needs
Willing to pay premium
Local Marketing and Customerization
Local marketing: Needs and wants of local
customer groups (e.g., neighborhood)
Customerization: Combination of operationally
driven mass customization with customized
marketing in a way that empowers consumers to
design the product and service offering of their
choice
Bases for Segmenting Consumer
Markets
Geographic - Region, City or Metro; Size, Density, Climate
Demographic - Age, life stage, gender, income, generation,
social class
Psychographic - Lifestyle or personality
Behavioral - occasions, benefits, uses, attitudes
Rationale: a single product can seldom meet the needs and
desires of all consumers. Consumers are too numerous and
diverse in their buying requirements
Marketing Memo: Cheat Sheet for 21-YearOlds (p. 253)
In 2003, 4.1 million Americans turned 21, here are some facts you need to know
about them
41% - share of 21 yr olds who currently live with mom and/or dad
60% - share of college students who plan to move back home after graduation
1-in-4 – odds that a 21 yr old was raised by a single parent
70% - share of 21 year olds who have a full or part time job
$2,241,141 – amount the average 21 yr old will spend between now and the end of
his life
$3,000 – credit card debt of the average 21 year old
43% - share of 21 year olds who have a tattoo or body piercing
Source: John Fetto, “Twenty-One, and Counting…” American Demographics
(Sept 2003): 48.
Challenge of Segmentation
• Segmentation ignores the whole customer profile,
which becomes clear only with individual
profiling
EX: __________________________________
• Segments change continually
• Need for continuous research
Market Targeting Strategies
Various segments: decide how many and
which ones to target
•
What makes the segments attractive?
•
Consider company resources and
objectives
- able or unable to offer superior value
- company objectives
Market Targeting Strategies (p. 262-263)
Single segment concentration: focus on ____
segment
m1 m2 m3
p = product offering
p1
m = market segment
p2
p3
Porsche (p2) – for sports car market (m1)
Market Targeting Strategies
Selective specialization: select a
each segment is appealing
m1
m2
of segments;
m3
p1
p2
p3
Truck (p1); economy (p2); luxury (p3);
Outdoor (m3); middle-income (m1); high income (m2)
Market Targeting Strategies
Product specialization: specialize in making a certain product
for _______________ segments
m1 m2 m3
p1
p2
p3
Microscopes (p2)
Universities (m1); company labs (m2); hospitals (m3)
Market Targeting Strategies
Market specialization: serve many needs of a particular
customer group
m1
m2
m3
p1
p2
p3
Microscope (p1); test tubes (p2); chemicals (p3)
Universities (m1)
Market Targeting Strategies
Full market coverage: serve ___ customer groups
with ____ the products they might need
Undifferentiated:
Ignore segment differences
Differentiated:
Different offerings
for different segments
Market Segmentation Issues
Increased segmentation allows company to meet
needs of more customers; increased profitability
Increased segmentation increases costs
Tradeoff: Will increased segmentation ___________
for added costs?
Costs (p. 264) – product modification,
manufacturing, administrative, inventory,
promotion