marketing for customer value module 2 for mba 1st semester

1. MODULE 2
• Customer value,
• satisfaction and loyalty,
• Customer relationships,
• Life time value of customers,
• Customer databases,
• Buying decision process,
• Market segments and targets,
• Product life cycle strategies,
Assignment :
Brand positioning,
Brand equity

2. Customer Value
• Critic says that Nike shoes cost
almost nothing to make, yet cost
you & me so much.
• True. The RMs & Mfg costs is
relatively low, but mktg the product
to you & me ( C’mer) is expensive.
Mtls, labor, shipping, eqpt, import
duties, & suppliers’ cost generally

3. • Compensating the sales team, distbrs, admin,
& endorsers, as well as paying for
advertising, & R & D adds $15 or so to NIKE’s
total.
• NIKE sells its product to retailers to make a
profit of $7.
• The retailer, therefore , pays roughly $47 to
put a pair of NIKES on the shelf.
• Factoring in the retailer’s overhead (
typically $30 covering human resources,

4. Nike Creates Value

5. What is Customer Perceived Value?
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.

6. Determinants of
Customer Perceived Value
Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost

7. What is Loyalty?
Loyalty
is
a deeply held commitment to re-buy or
patronize a preferred product or service
future
despite
situational influences and marketing
having the potential to cause switching
behavior.

8. The Value Proposition
or
Unique Selling Proposition
The whole cluster of
benefits the
company promises
to deliver

9. Estimating Lifetime Value
• Annual customer revenue: Rs.500
• Average number of loyal years: 20
• Company profit margin: 10%
• Customer lifetime value: Rs.1000

10. What
is
Customer Relationship Management?
CRM
Is
The process of carefully managing
detailed information about
customers and all customer
touchpoints to maximize
customer loyalty.

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Kindersley (India) Pvt. Ltd.
CRM Strategies
Reduce the rate of defection
Increase longevity
Enhance “share of wallet”
Terminate low-profit
customers
Focus more effort on high-
profit customers

12. Customer Retention
• Acquisition of customers can cost five times
more than retaining current customers.
• The average customer loses 10% of its
customers each year.
• A 5% reduction to the customer defection
rate can increase profits by 25% to 85%.
• The customer profit rate increases over the
life of a retained customer.

13. Buying Decision Process

14. Consumer Buying Process
Problem Recognition
Information Search
Evaluation
Purchase Decision
Postpurchase
Behavior

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Perceived Risk
Functional
Physical
Financial
Social
Psychological
Time

16. Analyzing
Consumer Markets
6
Marketing Management
A South Asian Perspective, 13th ed

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Kindersley (India) Pvt. Ltd.
What Influences
Consumer Behavior?
Cultural Factors
Social Factors
Personal Factors

18. What is Culture?
Culture
is
The fundamental determinant
of a person’s wants and
behaviors acquired through
socialization processes with
family and other key

19. Social Factors
Reference
groups
Social
roles
Statuses
Family

20. Personal Factors
Age
Values
Life cycle
stage
Occupation
Personality
Self-
concept
Wealth
Lifestyle

21. The Family Life Cycle

22. Model of Consumer Behavior

23. Key Psychological Processes
Motivation
MemoryLearning
Perception

24. Motivation
Freud’s
Theory
Behavior
is guided by
subconscious
motivations
Maslow’s
Hierarchy
of Needs
Behavior
is driven by
the lowest,
unmet need
Herzberg’s
Two-Factor
Theory
Behavior is
guided by
motivating
and hygiene
factors

25. Maslow’s Hierarchy of Needs

26. Perception
Selective Attention
Selective Retention

27. Market Segments & Targets

28. Identifying
Market Segments
and Targets
8
Marketing Management
A South Asian Perspective, 13th ed

29. Effective Targeting Requires…
• Identify and profile distinct
groups of buyers who differ in
their needs and preferences
• Select one or more market
segments to enter
• Establish and communicate the

30. What is a Market Segment?
A
Market Segment
consists of a group of customers
who
share a similar set of needs ad
wants.

31. Drug Company
serves
a growing niche
market
by
focusing
on
ayurvedic
medicines
&
health

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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral

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Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class

34. Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude

35. Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy

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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable

37. Product Life Cycle
Strategies

38. Sales
&
Product Life Cycle

39. The Marketing Mix
( 4 Ps of Marketing )