thx

1. Marketing Management
Hussain Al Awami, B.Sc. Pharm., M.Sc., MBA

2. Creating customer
value, satisfaction, and
loyalty
Chapter 5

3. Traditional
organizational chart
Top
Management
Middle
Management
Front line people
Customers

4. Modern customer oriented
organizational chart
Customers
Front line people
Middle
Cu
Cu
sto
Management
s to
m
me
ers
rs
Top
management

5. Customer perceived
value CPV
• Difference between benefits and cost

6. Total customer value
• Total benefits received

7. Total customer cost
• All costs for getting the product

8. Definition of loyalty
• Commitment to use the product in
future

9. Value proposition
• Whole cluster of benefits
• Customer experience
• Promise to have the same in future
• Value delivery system

10. Total customer
satisfaction
• Satisfaction is feeling pleasure or
disappointment
• Satisfaction is a function of
expectation to perceived
performance

11. Customer expectation
• Expectation from many sources
• Expectation should not be too high
• Expectation should not be too low

12. Product and service
quality
• Fitness for use
• Conformance to requirement
• Freedom from variation
• Totality of features and characteristics
offers that satisfy needs

13. Total Quality
Management TQM
• Continuous improvement in all
organization processes, products,
and services.

14. Customer profitability
• Person, household, or company
• Lifetime revenues exceed cost
• Individual, market segment, or
channel

15. Customer lifetime value
CLV
• Net present value for customer
during his life minus the cost with
application of proper discount rate

16. Customer equity
• Total discounted lifetime value for all
company customers

17. Customer relationship
management CRM
Collecting all customers Customer
information Touch point

18. Building loyalty
Basic Marketing
Reactive Marketing
Accountable Marketing
Proactive Marketing
Partnership Marketing

19. Reducing Customer
Defection
• Define and measure retention rate
• Distinguish causes of customer
attrition
• Estimate profit loss associated with
loss of customers
• Assess cost to reduce defection rate
• Gather customer feedback