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12-1
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Chapter 12
Customer Loyalty andCustomer Loyalty and
Product StrategyProduct Strategy
In the Spotlight:PC Connectionwww.pcconnection.com
In the Spotlight:PC Connectionwww.pcconnection.com
12-2
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Learning Objectives: Chapter 12
1. Explain how customer satisfaction influences customer loyalty.
2. Identify the key characteristics of consumer behavior.
3. Explain product strategy and related concepts.
4. Describe the components of a firm’s total product offering.
5. Understand the legal environment affecting product decisions.
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Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Relationship of CustomerService to Customer Loyalty
High Level of CustomerService
Tactic
CustomerSatisfaction
Response
CustomerLoyalty
Goal
12-4
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Simplified Model of Consumer Behavior
Sociological FactorsCulture
Social ClassReference GroupsOpinion Leaders
Psychological FactorsNeeds
PerceptionsMotivations
Attitudes
Decision-Making Process
ProblemRecognition
Information Search and Evaluation
PurchaseDecision
Post-PurchaseEvaluation
12-5
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Consumer Options for Dealing with Product or Service Dissatisfaction
Publicly complain to governmental agency
Privately seek redress from business
Warn friends about product or service
Publicly obtain legal action against
business
Privately complainto business
Stop buyingproduct or service
Take no action
Dissatisfactionoccurs
Source: Adapted from Del I. Hawkins, Roger J. Best, and Kenneth A. Coney, Consumer Behavior, 7th ed. (Boston: McGraw Hill, 1998), p. 622.
12-6
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Services Marketing Versus Goods Marketing
CharacteristicsPure Services
MarketingPure GoodsMarketing
Tangibility
Production/Consumption
Standardization
Perishability
Intangible goods
Occur at the same time
Less standardization
Greater perishability
Tangible goods
Occur at different times
Greater standardization
Less perishability
HybridServices/
GoodsMarketing
12-7
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
The Total Bundle of Satisfaction
Physical Product or Core Service Packaging
Labeling
Branding
Customer Service
Warranty
12-8
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
The Product Life Cycle
Sales Curve
Dol
lars
Time
Introduction Growth Maturity Decline
Profit Curve
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Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
The Product Development CurveN
umbe
r of
New
Ide
as
Time
IdeaAccumulation
BusinessAnalysis
Total ProductDevelopment
ProductTesting
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Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Product Strategy Options
One Market
Multiple Markets
One Product
Modified Product
Multiple Products
(1)
(2)
(3)
(4)
(5)
(6)
Product Mix Strategy Alternatives Target Market(s)
Key to Strategy Alternatives(1) One product/one market (4) Modified product/multiple markets(2) One product/multiple markets (5) Multiple products/one market(3) Modified product/one market (6) Multiple products/multiple markets
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Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Legal Protection
• Nutrition Labeling and Education Act of 1990• Consumer Product Safety Act of 1992
• Trademark protection• Patent protection• Copyrights: Copyright Act of 1976• Trade dress
Consumer Protection
Protection of Intangible Assets
U.S. Patent and Trademark Office
12-12
Small Business Management, 11th editionLongenecker, Moore, and Petty© 2000South-Western College Publishing
Benefits of Trademark Registration1. The right to sue in federal court for trademark infringement.
2. Court injunction against a competitor’s use or imitation of the trademark.
3. Recovery of damages and costs in a federal court infringement action and the possibility of treble damages and attorney’s fees.
4. Constructive notice of claim of ownership (which eliminates a good faith defense for a party adopting the trademark subsequent to registrant’s date of registration).
5. The right to deposit the registration with Customs in order to stop the importation of goods bearing an infringing mark.
6. Prima facie evidence of the validity of the registration, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the mark in commerce in connection with the goods or services specified in the certificate.
7. The possibility of incontestability, in which case the registration constitutes conclusive evidence of the registrant’s exclusive right, with certain limited exceptions, to use the
registered mark in commerce.
8. Limited grounds for attacking a registration once it is five years old.
9. Availability of criminal penalties and treble damages in an action for counterfeiting a registered trademark.
1 0. A basis for filing trademark applications in foreign countries.
