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Kotler03 Basic 04

The document discusses how companies can create customer value, satisfaction, and loyalty. It covers determining customer value and satisfaction, customer-delivered value, loyalty, satisfaction, product and service quality, maximizing customer lifetime value, building loyalty, reducing customer defection, and forming strong customer bonds.

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Della Gbedemah
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12 views20 pages

Kotler03 Basic 04

The document discusses how companies can create customer value, satisfaction, and loyalty. It covers determining customer value and satisfaction, customer-delivered value, loyalty, satisfaction, product and service quality, maximizing customer lifetime value, building loyalty, reducing customer defection, and forming strong customer bonds.

Uploaded by

Della Gbedemah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 20

A FRAMEWORK for

MARKETING MANAGEMENT

Chapter 4
Creating Customer Value,
Satisfaction, and Loyalty

Kotler Keller
Chapter Questions

• How can companies deliver customer


value, satisfaction, and loyalty?
• What is the lifetime value of a customer?
• How can companies cultivate strong
customer relationships?
• What is database marketing and why is it
important?

4-2
Determining Customer
Value and Satisfaction

Customer perceived value (CPV)


is the difference between the
prospective customer’s evaluation
of all the benefits and costs
of an offering and the perceived
alternatives

4-3
Determinants of
Customer-Delivered Value
Total customer cost Total customer value
• Monetary cost • Product value
• Time cost • Services value
• Energy cost • Personnel value
• Psychic cost • Image value

4-4
Loyalty

Loyalty is a deeply held commitment to


rebuy or repatronize
a preferred product or service
in the future despite situational
influences and marketing efforts having
the potential to cause switching behavior

4-5
Satisfaction

Satisfaction is a person’s
feelings of pleasure or disappointment
resulting from comparing
a product’s perceived performance
in relation to his or her expectations

4-6
Product and Service Quality

Quality is the totality of features and


characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs

4-7
Forms of Quality

• Conformance quality
• Performance quality

4-8
Total Quality Management

TQM is an organization-wide
approach to continuously
improving the quality of
all the organization’s processes,
products, and services

4-9
Maximizing Customer Lifetime Value

• Customer profitability
• Customer equity
• Lifetime value

4-10
Estimating Lifetime Value

• Annual customer revenue: $500


• Average number of loyal years: 20
• Company profit margin: 10%
• Customer lifetime value: $1,000

4-11
Drivers of Customer Equity

• Value equity
• Relationship equity
• Brand equity

4-12
Framework for CRM

• Identify prospects and customers


• Differentiate customers by needs and
value to company
• Interact to improve knowledge
• Customize for each customer

4-13
Improving the Value of
Company’s Customer Base

• Reduce the rate of defection


• Increase longevity
• Enhance customer growth potential
• Terminate low-profit customers
• Focus more effort on high-profit
customers

4-14
The Customer-Development Process

• Suspects
• Prospects
• First-time customers
• Repeat customers
• Clients
• Member
• Partners

4-15
Building Loyalty

• Basic
• Reactive
• Accountable
• Proactive
• Partnership

4-16
Reducing Customer Defection

• Define and measure retention rate


• Distinguish causes of customer attrition
• Estimate profit loss associated with loss of
customers
• Assess cost to reduce defection rate
• Gather customer feedback

4-17
Forming Strong Customer Bonds

• Add financial benefits


• Add social benefits
• Add structural ties

4-18
Database Key Concepts

• Customer • Business
database database
• Database • Data warehouse
marketing • Data mining
• Mailing list

4-19
Increasing Customer Share Requirements

• Estimate
• Select
• Pursue
• Document

4-20

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