Marketing 3


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Marketing 3

  1. 1. Creating Customer Value Prof. Kunal Gaurav Dhruva College of Management Hyderabad
  2. 2. Customer vs. Consumer <ul><li>Customer: anyone who pays directly or indirectly for the company's goods or services. </li></ul><ul><li>Consumer: anyone who enjoys the benefits of the good or service. </li></ul>
  3. 3. Customer Satisfaction <ul><li>Customer satisfaction or dissatisfaction is the feeling derived by the consumer when he compares the product ’ s actual performance with the performance that he expects of it. </li></ul><ul><li>Customers form their expectations on the basis of past buying experiences, advice of their reference group and the promises of the marketers and their competitors. </li></ul><ul><li>When the product performance matches the expected performance, the customer experiences satisfaction; when it falls short of the expectation, he experiences dissatisfaction. And when the performance exceeds expectations, the customer is highly satisfied or delighted. </li></ul>
  4. 4. What is Loyalty? <ul><li>Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior. </li></ul><ul><li>Loyalty status. Buyers can be divided into four groups according to brand loyalty status: </li></ul><ul><li>Hard-core loyals (who always buy one brand), </li></ul><ul><li>Split loyals (who are loyal to two or three brands), </li></ul><ul><li>Shifting loyals (who shift from one brand to another, and </li></ul><ul><li>Switchers (who show no loyalty to any brand). </li></ul>
  5. 5. Customer Perceived Value & Value Chain <ul><li>Customer perceived value is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. </li></ul><ul><li>Every firm performs a set of activities that helps in designing, producing, marketing, delivering and supporting its products. These activities form a process. </li></ul><ul><li>At every stage of the process, the firm adds value.  The chain of activities from raw material procurement to the after-sales service is called the value chain. It identifies nine strategic activities, i.e. five primary and four support activities, to create value. </li></ul>
  6. 7. Consumer Buying Process Problem Recognition Information Search Evaluation Purchase Decision Postpurchase Behavior
  7. 8. Problem Recognition
  8. 9. Sources of Information Personal Experiential Public Commercial
  9. 10. Successive Sets Involved in Consumer Decision Making
  10. 11. Stages between Evaluation of Alternatives and Purchase
  11. 12. Perceived Risk Functional Physical Financial Social Psychological Time
  12. 13. How Customers Use and Dispose of Products?
  13. 14. What Influences Consumer Behavior? Cultural Factors Social Factors Personal Factors
  14. 15. Cultural Factors <ul><li>Culture </li></ul><ul><li>Sub-culture </li></ul><ul><li>Social Class </li></ul>
  15. 16. What is Culture? <ul><li>Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions. </li></ul>
  16. 17. Subcultures Nationalities Religions Racial groups Geographic regions
  17. 18. Social Classes Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers
  18. 19. Characteristics of Social Classes <ul><li>Within a class, people tend to behave alike </li></ul><ul><li>Social class conveys perceptions of inferior or superior position </li></ul><ul><li>Class may be indicated by a cluster of variables (occupation, income, wealth) </li></ul><ul><li>Class designation is mobile over time </li></ul>
  19. 20. Social Factors Reference groups Social roles Statuses Family
  20. 21. Reference Groups Membership groups Primary groups Secondary groups Aspirational groups Dissociative groups
  21. 22. Provogue uses teenage icons as brand ambassadors and a youth targeted website to connect to its customers
  22. 23. Roles and Status What degree of status is associated with various occupational roles?
  23. 24. Personal Factors Age Values Life cycle stage Occupation Personality Self- concept Wealth Lifestyle
  24. 25. Customer Lifetime Value (CLV) <ul><li>Also known as lifetime customer value (LCV), or lifetime value (LTV). </li></ul><ul><li>is the Present Value of the future cash flows attributed to the customer relationship. </li></ul><ul><li>An estimate of customer lifetime value allows a business to determine the amount of money that can be spent on acquiring and retaining a customer. For example, a high customer lifetime value may convince a credit card company to offer expensive incentives to attract new clients. Also called lifetime customer value. </li></ul><ul><li>Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales. </li></ul>
  25. 26. Thank You!