MARKETING MANAGMENT CHAPTER 5 CREATING CUSTOMER VALUE , SATISFACTION AND LOYALTY

TYPES OF ORGANISTIONS PROFIT CENTERED ORGANISATION CUSTOMER CENTERED ORGANIZATION

CUSTOMERS

Top management Middle management Frontline people CUSTOMERS

Frontline people

Middle management

Top Management

BENEFITS OF CUSTOMER CENTERED ORGANIZATION

CUSTOMER ADVOCACY STRATEGY. COMPETITIVE ADVANTAGE. CUSTOMER FEEDBACK.

when comp USA permitted on its site for online searches it found that 20,000 more customer visited the site in a month with a 50% greater propensity to buy.

FACTORS AFFECTING CUSTOMER CHOICE

CUSTOMER PERCEIVED VALUEDifference between the prospective customers evaluation of all the benefits
and all the cost of an offering and the perceived alternatives.

TOTAL CUSTOMER BENEFIT

Perceived monetary value of the bundle of economic , functional and psychological benefits customer expect from a given market offering because of the products, services , personnel and image involved

FACTORS AFFECTING CUSTOMER CHOICE

TOTAL CUSTOMER COSTperceived bundle of costs customer expects to incur in evaluating,obtaing, using and disposing of the given market offering including monetary, time ,energy , and psychological costs.

CUSTOMER PERCEIVED VALUE IS BASED ON THE DIFFERENCE BETWEEN WHAT THE CUSTOMER GETS AND WHAT HE/SHE GIVES FOR DIFFERENT POSSIBLE CHOICES

DETERMINANTS OF CUSTOMER-PERCEIVED VALUE

CustomerPerceived value

Total Customer benefit

Product benefit Services benefit

Total Customer cost

Monetary cost Time cost

Personnel benefit
Image benefit

Energy cost
Psychological cost

BENEFITS OF CUSTOMER VALUE ANALYSIS

Identify the major attributes and benefits that customer value.

Assess the quantitative importance of different attributes and benefits.

Assess the company s and competitors performances on different customer values against their rated importance.

Examine how customers in specific segment rate the companys

performance against a specific major competitor on an individual attribute basis.

Monitor customer value over time.

REASONS FOR WRONG CHOICE BY CUSTOMER

Customer Ignorance. Short Term Goal( profit maximization). Budget Related Issues. Effect of Competitors.

CUSTOMER LOYALTY-DELIVERY OF HIGH CUSTOMER VALUE A DEEPLY HELD COMMITMENT TO REBUY OR A PREFERRED PRODUCT OR SERVICE IN THE FUTURE DESPITE SITUTIONAL INFLUENCESAND MARKETING EFFORTS HAVING POTENTIAL TO CAUSE SWITCHING BEHAVIOUR - OLIVER

TECHNIQUES USED FOR MAXIMIZING CUSTOMER LOYALITY

The value proposition consists of the whole cluster of benefits the company promises to deliver.

It is more then core positioning of the offering.

TECHNIQUES USED FOR MAXIMIZING CUSTOMER LOYALITY

The value delivery system includes all the experiencing the customer will have on the way to obtaining and using the offering which help to deliver distinctive consumer value. Volvos core positioning has been safety but it also includes long lasting car and good services.

CUSTOMER SATISFACTION AND EXPECTATIONS Customer satisfaction is the persons feelings of pleasure or disappointment that result from comparing a products performance to their expectations. Depends on many factors viz price ,loyality relationship , accessibility and availability of product and others.

CUSTOMER SATISFACTION AND EXPECTATIONS

Customer satisfaction is derived when it fulfills customers expectations. Expectations result from past buying experience,advices and marketers and competitors information and promises Korean automaker kia found success in us by launching low cost,high quality cars with enough reliability so that it could offer 10 year warranties

MEASUREMENT TECHNIQUES OF CUSTOMER SATISFACTION There are different methods of measuring customer satisfaction Periodic surveys Track customer satisfaction directly. Through questionnaire. To clarify about repurchase intention and respondents willingness to recommend to others .

MEASUREMENT TECHNIQUES OF CUSTOMER SATISFACTION Customer loss rate technique Measure customers those who are switching to other brands suupliers or either stopped buying. Mystery shoppers technique Act as potential buyers and report on strong and weak points experinced in buying the product

FACTORS INFLUENCING CUSTOMER SATISFACTION Customer complaints A sense of cutomer satisfaction by tallying complaints. Studies shows that customers are dissatisfied with their purchases about 25% of the time but only 5% complains. 95% feel complaining is not worth the effort

WAYS TO TACKLE CONSUMER COMPLAINTS

Set up 7-day,24-hourtoll-free hotline (by phone ,fax,email)to receive and act on customer complaints Contact the complaining customer as soon as possible Accept responsibility of dissatisfaction Use people who are empathic Resolve customer complains swiftly and to customer satisfaction

IMPACT OF PRODUCT AND SERVICE QUALITY

QUALITY IS TOTALITY OF FEATURES AND CHARACTERISTICS OF A PRODUCT OR SERVICE THAT BEAR ON ITS ABILITY TO SATISFY STATED NEEDS. -AMERICAN SOCIETY FOR QUALITY CONTROL Northwest Airlines came to last of all top airlines in BOYH ACS INDEX AND JD POWER AND ASSOCIATES CUSTOMER SATISFACTION POLL due to its service quality. QUALITY is the key to value creation and customer satisfaction.

DUTIES UNDER QUALITY MANAGEMNT

Recognizing correctly customer needs and requirement. Communicate customer expectations to product designers Timely disposal of customers order. Check all the instructions and technical assistance are provided to customers. Check level of after sales service satisfaction. Ask for customer feedback.

CUSTOMER LIFETIME VALUE (CLV)

It consists of profitable consumer which is a person household or company that over time yields a revenue stream that exceeds the acceptable amount which is spend by company for attracting , selling and servicing that customer

CUSTOMER PROFITABILITY ANALYSIS

Activity based costing. Revenue from customers. Including cost of all the resources that ultimately , serves customers. Considers customers portfolio.

DIAGRAM
C1 C2 C3

P1
P2 P3 P4

+
+

High Profitable Prodcut

Profitable Product

----

-------

Unprofitable Prodcut Highly Unprofitable Product

High Profit Customer

Mixed bag Customer

Losing Customer

CUSTOMER RELATIONSHIP MANAGEMENT

Process of carefully managing detailed information about individual customers and all customers touch point(it is any occasions on which customers encounters a brand and product) to maximize custom and loyalty. Enables companies to provide excellent rare type customers service through effective use of individual account information. Forms a major driver of companies profitability.

ONE-TO-ONE MARKETING
Under CRM it is mainly used in rural sectors and the features are listed below : Identify your prospects and customers. Differentiate customers in terms of their needs and their value to your company. Interact with individual customers to improve your knowledge about their individual needs and to build stronger relationships. Customize products , service and messages to each customers.

ATTRACTING AND RETAINING CUSTOMERS Reducing the rate of customers defection: Increasing the longevity of the customer relationship . Enhancing the growth potential of each customers through shares of wallet(gift and accessories given free). Making low profit customers more profitable or terminating them .

RETENTION DYNAMICS
Potentials Disqualified prospects

Prospects First-time customers Repeat customers Clients Members Advocates Partners

Inactive or Ex-customers

BUILDING LOYALTY
Interacting with customers in CRM the company used on going mechanism that gives managers plugged in to frontline customers feedback. Developing loyalty programs : Frequency programs:- Design to provide rewards to customers who buy frequently and in substantial amount. Club membership program :- these clubs are responsible for those customers who are the largest portion of business.

CUSTOMER DATABASE AND DATABASE MARKETING

Customer database is the organize collection of comprehensive information of individual customers or prospects that is current accessible and actionable for search marketing purposes. Database marketing is the process of building , maintaining and using customer data base and other database (products, suppliers etc.) to contact , transact and building customer relationships.

DATAWARE HOUSE AND DATA MINING

These data are collected by the companys contact centre and organized into a data ware house where marketers can capture , query and analyze it to draw inferences about an individual customers needs and responses . By Data mining marketing statisticians can extract useful information about an individual , trends and segments from the mass of data . It uses sophisticated statistical and mathematical techniques such as cluster analysis , automatic interaction detection , predictive modeling and neural networking .

USES OF DATABASE
To identify prospects To decide which customers should receive a particular offer To deepen customer loyalty To reactivate customer purchases To avoid serious customer mistakes

BY:Amir Suhail Amit Singh Amrit Singh Amulya Sharma Ankit Kumar Singh Ankit Verma Ankit Yadav Akash Agnihotri