This document outlines different marketing philosophies and concepts, including the production concept, product concept, selling concept, marketing concept, customer concept, and societal marketing concept. It also discusses key marketing topics like customer relationship management, customer perceived value, demand states, customer satisfaction, and levels of customer relationships. The key ideas are that marketing has evolved from a production and product focus to being customer-centric and addressing both business and social goals. Effective marketing requires understanding customer needs and delivering superior value.
Strategies Affecting Consumer Behavior:
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are various factors influencing the purchases of consumer such as social, cultural,economic, personal and psychological.
1. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.
a)Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc .
b) Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
c) Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
2. Cultural Factors:
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar.
3. Economic Factors:
Consumer behaviour is influenced largely by economic factors. Economic factors that influence consumer behaviour are as: personal income, family income ,savings ,consumer credit and other economic factors.
a) Personal Income:
The discretionary personal income refers to the balance remaining after meeting basic necessaries of life. This income is available for the purchase of shopping goods, durable goods and luxuries. An increase in the discretionary income leads to an increase in the expenditure on shopping goods, luxuries etc. which improves the standard of living
Industrial marketing (or business-to-business marketing) is the marketing of goods and services by one business to another. Industrial goods are those an industry uses to produce an end product from one or more raw materials.
This presentation will take you through concept of personal selling, essentials of personal selling and its importance. It also include qualities required for a sales person involved in personal selling.
9/19/2011 Self-Concept in Consumer BehaviorWalid Abraz
Date: 9/19/2011
Course: MK617 Consumer Behavior
Assignment: Self-Concept in Consumer Behavior
Description: “Every product you purchase reflects who you really are”
A critical review of Joseph Sirgy article about Self-Concept in Consumer Behavior.
For this assignment, students were presented some definitions and theories about Self-Concept in Consumer Behavior. This included the definition of the Image product, the process of identification, congruity and incongruity, but also some self-concept measurements practices.
Strategies Affecting Consumer Behavior:
Consumer behavior refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants. There are various factors influencing the purchases of consumer such as social, cultural,economic, personal and psychological.
1. Social Factors
Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status.
a)Reference Groups
Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc .
b) Family
Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.
c) Roles and Status
Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status.
2. Cultural Factors:
Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class.
Culture
Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries.
Subculture
Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group.
Social Class
Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar.
3. Economic Factors:
Consumer behaviour is influenced largely by economic factors. Economic factors that influence consumer behaviour are as: personal income, family income ,savings ,consumer credit and other economic factors.
a) Personal Income:
The discretionary personal income refers to the balance remaining after meeting basic necessaries of life. This income is available for the purchase of shopping goods, durable goods and luxuries. An increase in the discretionary income leads to an increase in the expenditure on shopping goods, luxuries etc. which improves the standard of living
Industrial marketing (or business-to-business marketing) is the marketing of goods and services by one business to another. Industrial goods are those an industry uses to produce an end product from one or more raw materials.
This presentation will take you through concept of personal selling, essentials of personal selling and its importance. It also include qualities required for a sales person involved in personal selling.
9/19/2011 Self-Concept in Consumer BehaviorWalid Abraz
Date: 9/19/2011
Course: MK617 Consumer Behavior
Assignment: Self-Concept in Consumer Behavior
Description: “Every product you purchase reflects who you really are”
A critical review of Joseph Sirgy article about Self-Concept in Consumer Behavior.
For this assignment, students were presented some definitions and theories about Self-Concept in Consumer Behavior. This included the definition of the Image product, the process of identification, congruity and incongruity, but also some self-concept measurements practices.
Product concept is the idea that consumer favors the products that offers the best quality performance and features and that organization should devote their energy in making continuous
Difference between selling concept and marketing conceptRohan Byanjankar
Presentation of Marketing
Differences Between
Selling Concept and Marketing Concept
Selling Concept
If customers are left to themselves, they will not make the effort to buy a company’s product.
Mere sales oriented regardless of consumer want, need and value,
Primary agenda is to earn profit through larger sales volume.
Factory or Product is the initiative point of Selling Concept.
Selling of product through persuasion or different means of selling though the product have detrimental effect,
It focuses on short term as intensive focus on pushing product to the market and clearing the market as soon as possible.
Marketing Concept
Marketing concept is the management process of identifying the need of target customer , and delivering product,
Customer oriented and fosters on customer value,
Primary agenda is to earn profit through Customer Satisfaction
The loyalty of consumer is the ultimate source of profit (focus on creating hard-core loyal customer such as Apple Inc.)
Identification of need of Target market is the initial phase,
Creates wants satisfying goods and services which the consumers will want to buy.
What is offered for sale is determined not by the seller but by the buyers.
Product is the resultant of market research
Differences Between
Selling Concept
Process of selling starts with the creation of product, and pushing it to market through aggressive selling.
Marketing Concept
Process of marketing starts with the identification of customer need, creation of product based on market research, and delivering product in such as way that satisfies consumer need
...............
Ready, Set, Present (Marketing PowerPoint Presentation Content): 100+ PowerPoint presentation content slides. People say, ”Nice to see you.” The response can be, “Nice to be seen.” This exemplifies marketing which in today’s world has never been so important for both large and small companies alike. Marketing PowerPoint Presentation Content slides include topics such as: Defining the elements of Marketing, developing key positioning statements and messages for your products and services, using a three-step process for market research, and understanding the benefits of Internet marketing. Learning about marketing models, strategy and programs including 7 slides covering branding, 10 slides describing steps to market research followed by 4 slides of effective marketing examples. Gain the necessary information on how to brand your business as well as ways to develop brand positioning. Further, this presentation includes 11 slides covering marketing plan, 4 slides about customer feedback followed by examples, plus 5 slides teaching how to name a product, company and service. In addition you will receive 40 slides covering marketing materials, internet marketing, search engine optimization, the future of marketing and much more.
Advertising Campaign Management Part 3Jennifer Sundstrom-F.docxSALU18
Advertising Campaign Management
Part 3
Jennifer Sundstrom-Fitzgerald
1
Learning Objectives
Analyze advertising campaign parameters
Identify how a creative brief facilitates effective advertising
Describe the implications of advertising management in the global arena
2
Advertising Campaign Parameters
Advertising goals
Media selection
Tagline
Consistency
Positioning
Campaign duration
Effective advertising campaigns require careful planning and attention to specific parameters including Advertising goals, media selection, tagline, consistency, positioning and campaign duration. We will review each parameter beginning with goals.
3
Advertising Goals
A primary goal of advertising is to build brand awareness among existing and new customers. The creative should inform and persuade them to make purchases and build brand loyalty.
4
Build brand awareness
Inform, persuade, support marketing efforts
Encourage purchase decisions
Building Brand Awareness
Successful brands possess two characteristics. Top-of-mind are brands a consumer mentions first when asked about brands in a particular product category – these are brands in our Evoked Set. Top choice is the brand within a product category that consumers prefer the most. So top choice requires top-of-mind. Brand equity, which is the level of brand strength perceived by consumers, leads to top-of-mind and top choice brands.
This is also applicable on the B2B side when business people are faced with modified rebuy situations. A common dilemma I had was for every Fox Graduation Ceremony, there are three per year, and the need for graduation program booklets. There was a printer who I always wanted to hire because I enjoyed working with them, they always had fair prices and delivered high-quality programs in a timely manner. However, due to non-profit regulations, I had to bid the job to at least three vendors. So my top-of-mind, first choice brand was always included but I had to add two other vendors as well. Tell story about Bill DeVece and misspelled student names and how wonderful he was in fixing these issues.
5
Brand image begins with awareness
Consumers recognize the brand
Brand equity leads to top-of-mind and top choice
B2B important in modified rebuy situations
Building Brand Awareness
Successful brands possess:
Top-of-mind
Top choice
The 10 Most Valuable Brands in the World per 2018 study
Coca Cola brand is a good example of a brand with these characteristics. Here is a recent list of a top 10 most valuable and recognized list of global brands. (click link)
6
Goal to Persuade
Dare to be Devoted Campaign
Every Kiss Begins with Kay Campaign
Another common goal of advertising is to persuade consumers that a particular brand is superior to others and should be their top choice. Both of these brands, owned by the same parent company (Signet), do extensive advertising, but only Kay Jewelers has successfully used the same slogan, “Every Kiss Begins w.
Search Engine Marketing - Competitor and Keyword researchETMARK ACADEMY
Over 2 Trillion searches are made per day in Google search, which means there are more than 2 Trillion visits happening across the websites of the world wide web.
People search various questions, phrases or words. But some words and phrases are searched
more often than others.
For example, the words, ‘running shoes’ are searched more often than ‘best road running
shoes for men’
These words or phrases which people use to search on Google are called Keywords.
Some keywords are searched more often than others. Number of times a keyword is searched
for in a month is called keyword volume.
Some keywords have more relevant results than others. For the phrase “running shoes” we
get more than 80M relevant results, whereas for “best road running shoes for men” we get
only 8.
The former keyword ‘running shoes’ has way more competition from popular websites to
new and small blogs, whereas the latter keyword doesn’t have that much competition. This
search competition for a keyword is called search difficulty of a keyword or keyword
difficulty.
In other words, if the keyword difficulty is ‘low’ or ‘easy’, there won’t be any competition
and if you target such keywords on your site, you can easily rank on the front page of Google.
Some keywords are searched for, just to know or to learn some information about something,
that’s their search intention. For example, “What shoe size should I choose?” or “How to pick
the right shoe size?”
These keywords which are searched just to know about stuff are called informational
keywords. Typically people who are searching this type of keywords are top of a Conversion
funnel.
Conversion funnel is the journey that search visitors go through on their way to an email
subscription or a premium subscription to the services you offer or a purchase of products
you sell or recommend using your referral link.
For some buyers, research is the most important part when they have to buy a product.
Depending on that, their journey either widens or narrows down. These types of buyers are
Researchers and they spend more time with informational keywords.
Conversion is the action you want from your search visitors. Number of conversions that you
get for every 100 search visitors is called Conversion rate.
People who are at different stages of a conversion funnel use different types of keywords.
The What, Why & How of 3D and AR in Digital CommercePushON Ltd
Vladimir Mulhem has over 20 years of experience in commercialising cutting edge creative technology across construction, marketing and retail.
Previously the founder and Tech and Innovation Director of Creative Content Works working with the likes of Next, John Lewis and JD Sport, he now helps retailers, brands and agencies solve challenges of applying the emerging technologies 3D, AR, VR and Gen AI to real-world problems.
In this webinar, Vladimir will be covering the following topics:
Applications of 3D and AR in Digital Commerce,
Benefits of 3D and AR,
Tools to create, manage and publish 3D and AR in Digital Commerce.
Monthly Social Media News Update May 2024Andy Lambert
TL;DR. These are the three themes that stood out to us over the course of last month.
1️⃣ Social media is becoming increasingly significant for brand discovery. Marketers are now understanding the impact of social and budgets are shifting accordingly.
2️⃣ Instagram’s new algorithm and latest guidance will help us maintain organic growth. Instagram continues to evolve, but Reels remains the most crucial tool for growth.
3️⃣ Collaboration will help us unlock growth. Who we work with will define how fast we grow. Meta continues to evolve their Creator Marketplace and now TikTok are beginning to push ‘collabs’ more too.
Most small businesses struggle to see marketing results. In this session, we will eliminate any confusion about what to do next, solving your marketing problems so your business can thrive. You’ll learn how to create a foundational marketing OS (operating system) based on neuroscience and backed by real-world results. You’ll be taught how to develop deep customer connections, and how to have your CRM dynamically segment and sell at any stage in the customer’s journey. By the end of the session, you’ll remove confusion and chaos and replace it with clarity and confidence for long-term marketing success.
Key Takeaways:
• Uncover the power of a foundational marketing system that dynamically communicates with prospects and customers on autopilot.
• Harness neuroscience and Tribal Alignment to transform your communication strategies, turning potential clients into fans and those fans into loyal customers.
• Discover the art of automated segmentation, pinpointing your most lucrative customers and identifying the optimal moments for successful conversions.
• Streamline your business with a content production plan that eliminates guesswork, wasted time, and money.
Short video marketing has sweeped the nation and is the fastest way to build an online brand on social media in 2024. In this session you will learn:- What is short video marketing- Which platforms work best for your business- Content strategies that are on brand for your business- How to sell organically without paying for ads.
Mastering Local SEO for Service Businesses in the AI Era is tailored specifically for local service providers like plumbers, dentists, and others seeking to dominate their local search landscape. This session delves into leveraging AI advancements to enhance your online visibility and search rankings through the Content Factory model, designed for creating high-impact, SEO-driven content. Discover the Dollar-a-Day advertising strategy, a cost-effective approach to boost your local SEO efforts and attract more customers with minimal investment. Gain practical insights on optimizing your online presence to meet the specific needs of local service seekers, ensuring your business not only appears but stands out in local searches. This concise, action-oriented workshop is your roadmap to navigating the complexities of digital marketing in the AI age, driving more leads, conversions, and ultimately, success for your local service business.
Key Takeaways:
Embrace AI for Local SEO: Learn to harness the power of AI technologies to optimize your website and content for local search. Understand the pivotal role AI plays in analyzing search trends and consumer behavior, enabling you to tailor your SEO strategies to meet the specific demands of your target local audience. Leverage the Content Factory Model: Discover the step-by-step process of creating SEO-optimized content at scale. This approach ensures a steady stream of high-quality content that engages local customers and boosts your search rankings. Get an action guide on implementing this model, complete with templates and scheduling strategies to maintain a consistent online presence. Maximize ROI with Dollar-a-Day Advertising: Dive into the cost-effective Dollar-a-Day advertising strategy that amplifies your visibility in local searches without breaking the bank. Learn how to strategically allocate your budget across platforms to target potential local customers effectively. The session includes an action guide on setting up, monitoring, and optimizing your ad campaigns to ensure maximum impact with minimal investment.
Core Web Vitals SEO Workshop - improve your performance [pdf]Peter Mead
Core Web Vitals to improve your website performance for better SEO results with CWV.
CWV Topics include:
- Understanding the latest Core Web Vitals including the significance of LCP, INP and CLS + their impact on SEO
- Optimisation techniques from our experts on how to improve your CWV on platforms like WordPress and WP Engine
- The impact of user experience and SEO
The session includes a brief history of the evolution of search before diving into the roles technology, content, and links play in developing a powerful SEO strategy in a world of Generative AI and social search. Discover how to optimize for TikTok searches, Google's Gemini, and Search Generative Experience while developing a powerful arsenal of tools and templates to help maximize the effectiveness of your SEO initiatives.
Key Takeaways:
Understand how search engines work
Be able to find out where your users search
Know what is required for each discipline of SEO
Feel confident creating an SEO Plan
Confidently measure SEO performance
Digital Commerce Lecture for Advanced Digital & Social Media Strategy at UCLA...Valters Lauzums
E-commerce in 2024 is characterized by a dynamic blend of opportunities and significant challenges. Supply chain disruptions and inventory shortages are critical issues, leading to increased shipping delays and rising costs, which impact timely delivery and squeeze profit margins. Efficient logistics management is essential, yet it is often hampered by these external factors. Payment processing, while needing to ensure security and user convenience, grapples with preventing fraud and integrating diverse payment methods, adding another layer of complexity. Furthermore, fulfillment operations require a streamlined approach to handle volume spikes and maintain accuracy in order picking, packing, and shipping, all while meeting customers' heightened expectations for faster delivery times.
Amid these operational challenges, customer data has emerged as an important strategy. By focusing on personalization and enhancing customer experience from historical behavior, businesses can deliver improved website and brand experienced, better product recommendations, optimal promotions, and content to meet individual preferences. Better data analytics can also help in effectively creating marketing campaigns, improving customer retention, and driving product development and inventory management.
Innovative formats such as social commerce and live shopping are beginning to impact the digital commerce landscape, offering new ways to engage with customers and drive sales, and may provide opportunity for brands that have been priced out or seen a downturn with post-pandemic shopping behavior. Social commerce integrates shopping experiences directly into social media platforms, tapping into the massive user bases of these networks to increase reach and engagement. Live shopping, on the other hand, combines entertainment and real-time interaction, providing a dynamic platform for showcasing products and encouraging immediate purchases. These innovations not only enhance customer engagement but also provide valuable data for businesses to refine their strategies and deliver superior shopping experiences.
The e-commerce sector is evolving rapidly, and businesses that effectively manage operational challenges and implement innovative strategies are best positioned for long-term success.
Financial curveballs sent many American families reeling in 2023. Household budgets were squeezed by rising interest rates, surging prices on everyday goods, and a stagnating housing market. Consumers were feeling strapped. That sentiment, however, appears to be waning. The question is, to what extent?
To take the pulse of consumers’ feelings about their financial well-being ahead of a highly anticipated election, ThinkNow conducted a nationally representative quantitative survey. The survey highlights consumers’ hopes and anxieties as we move into 2024. Let's unpack the key findings to gain insights about where we stand.
When most people in the industry talk about online or digital reputation management, what they're really saying is Google search and PPC. And it's usually reactive, left dealing with the aftermath of negative information published somewhere online. That's outdated. It leaves executives, organizations and other high-profile individuals at a high risk of a digital reputation attack that spans channels and tactics. But the tools needed to safeguard against an attack are more cybersecurity-oriented than most marketing and communications professionals can manage. Business leaders Leaders grasp the importance; 83% of executives place reputation in their top five areas of risk, yet only 23% are confident in their ability to address it. To succeed in 2024 and beyond, you need to turn online reputation on its axis and think like an attacker.\
Key Takeaways:
- New framework for examining and safeguarding an online reputation
- Tools and techniques to keep you a step ahead
- Practical examples that demonstrate when to act, how to act and how to recover
The digital marketing industry is changing faster than ever and those who don’t adapt with the times are losing market share. Where should marketers be focusing their efforts? What strategies are the experts seeing get the best results? Get up-to-speed with the latest industry insights, trends and predictions for the future in this panel discussion with some leading digital marketing experts.
5 big bets to drive growth in 2024 without one additional marketing dollar AND how to adapt to the biggest shifting eCommerce trend- AI.
1) Romance Your Customers - Retention
2) ‘Alternative’ Lead Gen - Advocacy
3) The Beautiful Basics - Conversion Rate Optimization
4) Land that Bottom Line - Profitability
5) Roll the Dice - New Business Models
It's another new era of digital and marketers are faced with making big bets on their digital strategy. If you are looking at modernizing your tech stack to support your digital evolution, there are a few can't miss (often overlooked) areas that should be part of every conversation. We'll cover setting your vision, avoiding siloes, adding a democratized approach to data strategy, localization, creating critical governance requirements and more. Attendees will walk away with actions they can take into initiatives they are running today and consider for the future.
Digital marketing is the art and science of promoting products or services using digital channels to reach and engage with potential customers. It encompasses a wide range of online tactics and strategies aimed at increasing brand visibility, driving website traffic, generating leads, and ultimately, converting those leads into customers.
https://nidmindia.com/
1. Marketing Philosophy
The Production Concept
The Product Concept
The Selling Concept
--------------------------------------------------------
The Marketing Concept
The Customer Concept
The Societal Marketing Concept
2. The Production Concept
Consumers will prefer products that are
widely available and inexpensive.
Focus: achieving high production efficiency,
low costs, and mass distribution.
It is useful when (1) the demand for a product
exceeds the supply; (2) the product’s cost is
too high.
Examples: Standard Raw Materials and
Components, CD, LCD.
3. The Product Concept
Consumers will favor those products that
offer the most quality, performance, or
innovative features.
Focus: making superior products and
improving them over time.
Examples: Digital Camera, CPU.
Better Mousetrap Fallacy
Marketing Myopia. (Theodoes Levitt, 1965)
4. The Selling Concept
Consumers and businesses, if left alone, will
ordinarily not buy enough of organization’s
products.
Focus: undertake an aggressive selling and
promotion effort.
Examples: unsought goods: encyclopedias,
funeral plots, foundations.
5. The Marketing Concept
The key to achieving its organizational goals
consists of the company being more effective than
competitors in creating, delivering, and
communicating superior customer value to its
chosen target markets.
Slogans: 麥當勞都是為您, 以客為尊, 顧客永遠是對
的, We do it all for you (Toyota).
Four pillars: target market, customer needs,
integrated marketing and profitability.
8. The Societal Marketing
Concept
The organization’s task is to determine the needs,
wants, and interests of target markets and to deliver
the desired satisfactions more effectively and
efficiently than competitors in a way that preserves
or enhances the consumer’s and society’s well-being.
Examples: Body Shop; HSBC; Johnson &
Johnson’s Tylenol; 保力達蠻牛.
9. Needs, Wants and Demands
Needs (需要): the basic human requirements.
Physical: food, clothing, shelter, safety
Social: belonging, affection
Individual: learning, knowledge, self-expression
Wants (慾望): when needs are directed to
specific objects that might satisfy the need.
Demands (需求): wants for specific products
backed by an ability to pay.
10. Demand States and Marketing
Tasks
Marketing managers are responsible for
demand management.
Negative Demand → Counter Marketing, e.g.
insurance.
No Demand → Stimulus, e.g. encyclopedias.
Latent Demand → Developing, e.g. iPod; 柴汽兩
用汽車; 克寧銀養奶粉.
Declining Demand → Remarketing, e.g. Arm &
Hammer’s baking soda → deodorizer; school.
11. Demand States and Marketing
Tasks
Marketing managers are responsible for
demand management.
Irregular Demand → Synchromarketing (同步行
銷), e.g. ice cream; museum.
Full Demand → Maintain Marketing
Overfull Demand → Demarketing (低行銷), e.g.
Mister Donut; 黑師傅捲心酥.
Unwholesome Demand → Social Marketing, e.g.
cigarettes; drunk-driving.
12. Customer Relationship
Management (CRM)
The overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction.
On average, it costs 5 to 10 times as much to
attract a new customer as it does to keep a
current customer satisfied. (Sears – 12 times)
13. Customer Perceived Value
The difference between total customer value
and total customer cost.
Value chain, e.g. Wal-Mart.
Value-delivery network, e.g. Honda.
14. Customer Lifetime Value and
Equity
Customer lifetime value: the value of the
entire stream of purchases that the customer
would make over a lifetime of patronage.
Lexus: $600,000; Taco Bell: $12,000;
Supermarket: $50,000.
Customer equity: the total combined
customer lifetime values of all of the
company’s customers.
Cadillac vs. BMW
15. Selective Relationship
Management
Weed out losing customers and target
winning ones for pampering.
Examples: Citibank; First Chicago Bank;
Fidelity Investment.
Risk: future profits are hard to predict.
16. Customer Relationship Groups
Profitability
Butterflies True Friends
Good fit between
company’s offerings and
customer’s needs; high
profit potential
Projected loyalty
High
Low
Long-term
customers
Short-term
customers
Limited fit between
company’s offerings and
customer’s needs; low
profit potential
Little fit between company’s
offerings and customer’s
needs; lowest profit
potential
Good fit between
company’s offerings and
customer’s needs; highest
profit potential
Strangers
Barnacles
17. Share of Customer
The portion of the customer’s purchasing in
its product categories that a company gets.
Methods to increase share of customer
Offer greater variety to current consumers
Train employees to cross-sell and up-sell in order
to market more products and services to existing
customers.
Amazon: books, music, videos, gifts, toys,
consumer electronics, office products, and so
on.
18. Customer Satisfaction
The extent to which a product’s perceived
performance matches a buyer’s expectation.
Smart companies aim to delight customers by
promising only what they can deliver, then
delivering more than they promise.
Examples: Lexus; Southwest Airlines;
Seasons Hotels; Nordstrom department store.
19. Satisfying Customer Complaints
Rate of dissatisfaction: 25%; rate of
complaint in dissatisfaction: 5%.
50% of complaints report a satisfactory
problem resolution.
Examples: Williams-Sonoma; Enterprise
Rent-A-Car.
On average, satisfied →3 people, and
dissatisfied → 11 people.
20. Satisfying Customer Complaints
Rate of complainant repurchase
Resolved Resolved
quickly
Major
complaints
34% 52%
Minor
complaints
52% 95%
21. Customer Relationship Levels
and Tools
Level of relationship: basic< reactive (e.g.
P&G)<accountable<proactive<partnership
(e.g. Boeing).
Tools:
Add financial benefits, ex. frequent-flier program.
Add social benefits, ex. club marketing program.
Add structural ties, ex. McKesson; FedEx.
22. In 1981, American Airlines first
introduced the AADVANTAGE
frequent-flier program. When other
airlines copied this strategy, did they
engage in the prisoner’s dilemma?