Marketing Chapter 5 Essay

2088 words - 9 pages

Marketing Management 12e, Kotler and Kellner

Summary: Chapter 5 (pages 139 - 171)

Building Customer Value, Satisfaction and Loyalty

Successful marketing companies invert the chart and see customers at the top and managers at every level must be personally involved in knowing, meeting and serving customers.

Customer Perceived Value
Customers are more educated and informed than ever and they have the tools to verify companies’ claims and seek out superior alternatives. They estimate which offer will deliver the most perceived value and act on it.
Customer perceived value (CPV) is the difference between the prospective customer’s evaluation of all the benefits and all the costs ...view middle of the document...

The key to generating high customer loyalty is to deliver high customer value.
The value proposition consists of the whole cluster of benefits the company promises to deliver; it is more than the core positioning of the offering.
The value-delivery system includes all the experiences the customer will have on the way to obtaining and using the offering.

Total Customer Satisfaction
Satisfaction = a person’s feelings of pleasure of disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.
Customer expectations = many successful companies are raising expectations and delivering performances to match.

Measuring Satisfaction
It is wise to measure customer satisfaction regularly because one key to customer retention is customer satisfaction. The link between customer satisfaction and customer loyalty are not proportional. Numerous methods exist to measure satisfaction:
▪ Periodic surveys
▪ Monitor the customer loss rate and find out why
▪ Mystery shoppers
It is important to ask the right questions and it is also important to monitor the customer satisfaction of competitors.

Product and Service Quality
Satisfaction also depends on product and service quality.
Quality = the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
A company that satisfies most of its customers’ needs most of the time is called a quality company.
Conformance quality = all the units deliver their respective promised quality
Total quality is the key to value creation and customer satisfaction.

Total Quality Management
Is an organisation-wide approach to continuously improving the quality of all the organisations’ processes, products and services. Studies have shown a high correlation between relative product quality and company profitability. New terminology emerging = return on quality (ROQ) which advocates improving quality only on those dimensions that produce tangible customer benefits, lower cost or increased sales.

Maximising Customer Lifetime Value

Ultimately marketing is the art of attracting and keeping profitable customers. Companies could improve their profits by “firing” their worst customers. It is not necessarily the company’s largest customers who yield the most profit.

Customer profitability
A profitable customer is one that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling and servicing that customer. There are only 2 solutions to handling unprofitable customers: raise fees or reduce service support.
Customer profitability analysis - unprofitable customers who defect should not concern the company.
Customer profitability analysis (CPA) is best conducted with the tools of an accounting technique called activity based costing.
Competitive advantage = a company’s ability to perform in one or more ways...

Other Papers Like Marketing Chapter 5

Termpaper

879 words - 4 pages delight Create value for customers and build customer relationships Capture value from customers in return Preface FIGURE | 1.1 A Simple Model of the Marketing Process Marketing: Creating and Capturing Customer ValueThis innovative customer-value framework is introduced at the start of Chapter 1 in a five-step marketing process model, which details how marketing creates customer value and captures value in return. The framework is

Anything Relevant Essay

4105 words - 17 pages |In-class assignment 3: SWOT analysis | |4 |Lecture |Chapter 4: Managing Marketing Information to Gain Customer Insights | |(Feb 1-5) | | | | |Discussion

Entrepreneur

825 words - 4 pages | 3. | The Entrepreneurial Process | Barringer Chapter 1 | | 4. | Recognizing opportunities and generating ideas | Barringer Chapter 2 | Week | 5. | Encourging and Protecting New Ideas | Barringer Chapter 2 | | 6. | Entrepreneurship In Pakistan part 1 | Article by Dr.Nadeem-ul-Haq | Week | 7. | Entrepreneurship In Pakistan part 2 | Article by Dr.Nadeem-ul-Haq | | 8. | FeasibilityAnalysis | Barringer

Principles of Marketing

1989 words - 8 pages . Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it 5. List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring return on marketing investment 2-2 Chapter Outline Companywide Strategic Planning: Defining Marketing’s Role Planning Marketing: Partnering to Build Customer Relationships Marketing Strategy and the Marketing

Chapter 1

589 words - 3 pages Chapter 1 notes |Management of Marketing | |by Geoff Lancaster and Paul Reynolds | | |Taylor and Francis © 2005 | : 1. A social

Mba5501 Syllabus

3497 words - 14 pages &hid= 21&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=44599407  Case Study  Assignment Read: Submit: Notes/Goals: Unit II Review: Read: Submit: Notes/Goals: Marketing Research and the Customer Value Proposition      Unit Study Guide Chapter 4: Conducting Marketing Research Chapter 5: Creating Long-term Loyalty Relationships Case Study Assignment Unit III Review: Read: Submit: Notes/Goals: Analyzing Markets and

Marketing

699 words - 3 pages Defining Marketing for the 21st Century Chapter Questions      Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management? Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 1-2 What is Marketing? Marketing is an organizational function and a set of

Marketing Cores

1613 words - 7 pages world. Marketing in practice This chapter has, so far, shown the background to marketing but now it is time to show how it is done in an organisation. These are the 5 key functions for managers to follow when leading marketing in a company: 1) strengthening the brand 2) measuring marketing effectiveness 3) driving new product development based on customer needs 4) gathering meaningful customer insights 5) utilizing new marketing

Final Report on Ec

3047 words - 13 pages |3 | |3 |Executive Summary |5 | |4 |Chapter-1: Introduction |6 | |5 |Chapter-2: What is e-Marketing

Introduction to Market

2179 words - 9 pages CHAPTER OBJECTIVES 1. Define what marketing is and discuss its core concepts. 2. Explain the relationships between customer value, satisfaction, and quality. 3. Define marketing management and understand how marketers manage demand and build profitable customer relationships. 4. Compare the five marketing management philosophies. 5. Analyze the major challenges facing marketers headings into the next century. CHAPTER

Marketing

812 words - 4 pages   isgo n odfryu t odadgo o o      5  1  Specialized Features  New coverage in every chapter of the fourteenth edition shows how companies and consumers are dealing  with marketing and the uncertain economy in the aftermath of the recent Great Recession.  2  Throughout the fourteenth edition, you will find revised coverage of the rapidly changing nature of  customer relationships and new material on such topics as customer­managed

Related Essays

Managing Market Information Essay

1517 words - 7 pages Information Systems (MIS) Marketing information system (MIS) consists of people and procedures for: – – – Assessing the information needs Developing needed information Helping decision makers use the information for customer Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 4- slide 5 Marketing Information System Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 4- slide 6 Assessing

Ungs2050 Essay

418 words - 2 pages : Mohamed Sheikh (Case Study 9) Group 4:L: Izzati Nor binti Salleh (Case Study 14) | | 10 | Chapter 7: Implementing Strategies: Management and Operations Issues | 21- Mon 22- Wed | 19/1121/11 | Case Presentation Session 5Case Presentation Session 6 | Group 5:L: Luqman Syakireen bin Seth A Rahim (Case Study 23) Group 6:L: Asyraf bin Abdul Wahab (Case Study 25) | | 11 | Chapter 8: Implementing Strategies: Marketing, Finance/Accounting, R

Principle Of Marketing Essay

1339 words - 6 pages Chapter 1- slide 5 Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 1- slide 6 3 11/06/2014 Understanding the Marketplace and Customer Needs • Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want • Marketing myopia is focusing

Marketing Essay

2398 words - 10 pages , to control. Competition, the economy, natural disasters, technology, geo political (war), regulations, shifting demographics. Reflect on how macroenvironmental influences affect the company strategic marketing efforts, especially the creation of a strategic marketing plan Week 2 TCOs C, H Consumer Buying Behavior Chapter 5: Creating Customer Value, Satisfaction, and Loyalty, pp. 118-130 Chapter 6: Analyzing Consumer Markets, pp. 148