Download Chapter 3 - Foundations of Marketing

of
MARKETING
Chapter
6
Ensuring Total
Customer
Satisfaction
and Managing
Customer
Relationships
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Objectives
1. Explain the importance of striving for total customer satisfaction
in marketing planning and implementation.
2. Explain the concept of value and the importance of creating
value for customers.
3. Illustrate the concept of Lifetime-Customer Value.
4. Outline and explain the value-adding chain.
5. Explain the concept of bench marking and its application in
producing customer satisfaction and company
competitiveness.
6. Explain the important features of customer relationship
marketing and how it is applied.
7. Explain the concept of performance gap analysis.
8. Outline the steps involved in a marketing effectiveness audit.
6-1
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Total Customer Satisfaction
• Providing a good or service that fully
and without reservation conforms to
the customer’s requirements.
6-2
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
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Lifetime-Customer Value (LCV)
• The sum of all future-customer revenue
streams minus product and servicing
costs, acquisition costs, and marketing
costs.
6-3
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Figure 6.1
Lifetime-Customer Value Development
Investment
phase
Recoup
costs
Increasing
profit
+
Relationship building
Business expansion
_
Stranger
Prospect
Customer
Reordering, Loyalty
generation
Repeat customer
Loyal, lifetime
customer
6-4
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Figure 6.2
An LCV Approach to Marketing Management
Marketing Management
(LCV orientation)
Customer
management
Marketing mix
management
•Acquisition
•Retention
•Add-on selling
•Products
•Pricing
•Marketing
Communications
•Distribution
6-5
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Figure 6.3
Customer-Based Intangible Resources:
Development Paths and Company Value
Organizational and Marketing Knowledge
Reputation
Image
Customer
Satisfaction
Marketing Management
(LCV orientation)
Trust
Loyalty
Organizational and Marketing Knowledge
6-6
Relationship
Source: Michele Costabile, “Customer Satisfaction and Trust into Resource-Based Perspective. Research Propositions Endorsing the
Confirmation/Disconfirmation Paradigm,” in Market Relationships, Track 1, ed. Per Andersson (Stockholm: European Marketing Academy, 1998), p. 77.
Reprinted with permission.
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Value
• A subjective term that is defined by the
customer; part of customer
expectations, which are a combination
of cost, time, quantity, quality, and
human factors.
6-7
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
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Market Challenges for Providing
Value
• Escalating customer expectations
• Competitive forces
• Cost pressures
6-8
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Figure 6.4
The Value-Adding Chain
CULTURE
Norms, values,
rituals, and
relationships
RESULTS
Quality, productivity,
and service
outcomes
6-9
SYSTEMS
Operating,
Administrative
control, and reward
PERFORMANCE
Employee
Behaviour
VALUE
Customer satisfaction
and competitive
advantage
Source: Adapted from Jac Fitz-enz, Benchmarking Staff Performance: How Staff Departments Can Enhance Their Value to the Customer (San Francisco:
Jossey-Bass, 1993), p. 16. Copyright 1993 . This material is used by permission of John Wiley & Sons, Inc.
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
Table 6.1
6
Customer’s Views of Value Leaders (1 of 2)
Operational Excellence
“They provide a great deal”
– excellent/attractive price
– minimum acquisition cost and hassle
– lowest overall cost of ownership
“A no-hassles firm”
– convenient
– consistent quality
Performance Superiority
“They’re the most innovative”
“Constantly renewing and creative”
“Always at the leading edge”
6-10a
Source: George Day, adapted from “CSC Index” presentation at ASAC Conference, Lake Louise, May 1993. Reprinted with permission.
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
Table 6.1
6
Customer’s Views of Value Leaders (2 of 2)
Customer Responsiveness
“Exactly what I need”
– customized products
– personalized communication
“They’re very responsive”
– handling of exceptions
– inducing/building relationships
6-10b
Source: George Day, adapted from “CSC Index” presentation at ASAC Conference, Lake Louise, May 1993. Reprinted with permission.
Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
6
Benchmarking
• The comparison of performance with
industry best practices.
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
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Requirements for Using
Benchmarking as a Tool
1. Know your operation.
2. Know the industry leaders and
competitors.
3. Incorporate the best.
4. Develop superiority.
6-12
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Ensuring Total Customer Satisfaction & Managing
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Chapter
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The Five Stages in the
Benchmarking Process
1.
2.
3.
4.
5.
Planning
Analysis
Integration
Action
Maturity
6-13
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Performance Gap
• The difference between the company’s
performance and that of the best of the
best.
6-14
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Chapter
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Marketing Audit
• A comprehensive appraisal of the
organizations marketing activities. It
involves a systematic assessment of
marketing plans, objectives, strategies,
programs, activities, organizational
structure, and personnel.
6-15
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Ensuring Total Customer Satisfaction & Managing
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Customer Relationship Marketing (CRM)
• Identifying and establishing,
maintaining and enhancing, and, when
necessary, also terminating
relationships with customers and other
stakeholders, at a profit, so that the
objectives of all parties are met,
through a mutual exchange and
fulfillment of promises.
6-16
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Ensuring Total Customer Satisfaction & Managing
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Customer Satisfaction Management (CSM)
• A program that focuses on identifying
key performance areas to meet or
exceed the average customer’s
expectations.
6-17
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Ensuring Total Customer Satisfaction & Managing
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Database Marketing
• Creation of a marketing plan based on
the use of database technology to
define the characteristics and needs of
customers.
6-18
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CRM Software
• Software designed to analyze a
customer database and determine
customer needs and characteristics.
6-19
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Ensuring Total Customer Satisfaction & Managing
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Chapter
Table 6.3
6
A Relationship View of Marketing
6-20
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Ensuring Total Customer Satisfaction & Managing
Customer Relationships
Chapter
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Mass Customization
• Organizing to make production of
products more flexible to meet
specifically stated customer
requirements.
6-21
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