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705721 Marketing Management
Department of MarketingFaculty of Business Administration
Chiang Mai University
Building Customer Satisfaction,Building Customer Satisfaction,Value, and RetentionValue, and Retention
Building Customer Satisfaction,Building Customer Satisfaction,Value, and RetentionValue, and Retention
VIT business school
1. Customer Satisfaction
The level of a person’s felt state resulting from comparing a product’s perceived performance in relation to the person’s expectations
P < E P = E P > E
Dissatisfied Satisfied Delighted(Highly satisfied)
What A Highly Satisfied Customer Does
Stays loyal longer Buys more as the company introduces new products a
nd upgrades existing products Talks favorably about the company and its products Pays less attention to competing brands and advertisi
ng and is less sensitive to price Offers product/service ideas to the company Costs less to serve than new customers because transa
ctions are routinized
How Customers Handle Dissatisfaction
Take no action Take some form of public action
Seek redress directly from business firms Take legal action to obtain redress Complain to business, public, or governmental
agencies Take some form of private action
Stop buying product/brand or boycott seller Warn friends about the product and/or seller
Methods of Tracking and Measuring Customer Satisfaction
Complaintand
suggestionsystems
Customersatisfaction
survey
Ghostshopping
Lostcustomeranalysis
2. Customer Perceived Value
The difference between total customer value and total customer cost
Total Customer Value The bundle of benefits customers expect from a
given product or service Total Customer Cost
The bundle of costs customers expect to incur in evaluating, obtaining, and using the product or service
Total customer costTotal customer costTotal customer valueTotal customer value
Determinants of Customer Perceived Value
Productvalue
Servicesvalue
Personnelvalue
Imagevalue
Monetarycost
Timecost
Energycost
Psychiccost
Customerperceived
value
Customerperceived
value
ProfitMargin
CustomerServices
Marketing& Sales
OutboundLogisticsOperations
InboundLogistics
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Pri
ma
ryA
cti
viti
es
Su
pp
ort
Ac
tivi
tie
s
Value Chain
3. Retaining Customer
The need for customer retention Offensive marketing typically costs more than defensive marketing
Offensive marketing is designed to obtain an objective, usually market share, from a target competitor.
Whereas, Defensive marketing warfare strategies are a type of marketing warfare strategy designed to protect a company's market share, profitability, product positioning, or mind share.
It requires much effort and cost to induce satisfied customers to switch away from their current suppliers
Customer Development Process
SuspectsSuspects
1st-timecustomers1st-time
customers
Disqualifiedprospects
Disqualifiedprospects
Repeatcustomers
Repeatcustomers
AdvocatesAdvocates
PartnersPartners
ClientsClients
AttractingNew
Customers
ProspectsProspects
Inactive orex-customers
Inactive orex-customers
RetainingCustomers
RetainingCustomers
RetainingCustomers
New Product Adoption Process
Customer Relationship Management(CRM) The task of creating strong
customer loyalty andretaining customers
Trial
Interest
Adoption
Evaluation
Awareness
Levels of CRM
Accountable ReactiveBasic orReactive
Proactive Accountable Reactive
Partnership Proactive Accountable
High margin Medium margin Low margin
Many customers
Medium numberof customers
Few customers
Customer Equity
The aim of CRM is to produce high customer equity The more loyal customers, the higher customer equity Three drivers of customer equity:
Value equity Brand equity Relationship equity
(a) Value Equity
The customer’s objective assessment of the utility of an offering based on perceptions of its benefits related to its costs
Subdrivers of value equity: Quality Price Convenience
(b) Brand Equity
The customer’s subjective and intangible assessment of the brand, above and beyond its objectively perceived value
Subdrivers of brand equity: Brand awareness Customer attitude toward the brand Customer perception of the brand ethics
(c) Relationship Equity
The customer’s tendency to stick with the brand, above and beyond objective and subjective assessments of its worth
Subdrivers of relationship equity: Loyalty programs Special recognition and treatment programs Community building programs Knowledge building programs
Retention Building Approaches
Adding financial benefits Frequency programs Club membership programs
Adding social benefits Customization and customerization
Adding structural ties Create long-term contracts Charge a lower price to consumers who buy more Turn the product into a long-term service
4. Total Quality Marketing Strategy
Quality The totality of features and characteristics of a
product or service that bear on its ability to satisfy stated or implied needsPerformance qualityConformance quality
Total Quality Management (TQM) An organization-wide approach to continuously
improving the quality of all the organization’s processes, products, and services
Roles of Marketers in Total Quality Marketing Management
Marketers bear the major responsibility for correctly identifying the customers’ needs and requirements
Marketers must communicate customer expectations correctly to product designers
Roles of Marketers in Total Quality Marketing Management
Marketers must make sure that the customers’ orders are filled correctly and on time
Marketers must check that customers have received proper instructions, training, and technical assistance in the use of the product
Roles of Marketers in Total Quality Marketing Management
Marketers must stay in touch with customers after the sale to make sure that they are satisfied and remain satisfied
Marketers must gather and convey customer ideas for product and service improvements to the appropriate company departments
5. Internal Marketing
The task of successfully hiring, training, and motivating able employees who want to serve the customers well
Company
Employees Customers
Interactive Marketing
External M
arketingInte
rnal
Mar
ketin
g
A High-Performance Business Environment
Employee Satisfaction
Internal Marketing
Higher-quality products and services
Customer Satisfaction
Stockholder Satisfaction
Breakthroughinnovations
Continuousimprovements
Businessgrowth
Sales& Profits