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Cust. Perceived Value = Total Benefits – Total Costs
Loyalty Relationship Concept 1 of 6: Maximize Value
DO THE MATH: VALUE IS A DIFFERENCE
Customer
Perceived
Value
Product
Benefit
Services
Benefit
Personnel
Benefit
Image Benefit
Total Customer
Benefit
Monetary Cost
Time
Cost
Energy
Cost
Psychological
Cost
Total Customer
Cost
= -
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THEY:
1. Stay loyal longer
2. Buy more as the company introduces new & upgraded products
3. Talk favorably to others about the company
4. Pay less attention to competing brands
5. Are less price sensitive
Loyalty Relationship Concept 2 of 6: Ensure Delight
DELIGHT IS A BIG DEAL ($$$$$)
EVERY COMPANY WANTS DELIGHTED CUSTOMERS! WHY?
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Loyalty Relationship Concept 3 of 6: Ensure Product Quality
HIGH QUALITY STANDARDS SHOULD BE
INTERNAL TARGETS
HOW? Codify QUALITY as a company priority
Ensure departmental objectives and
targets reflect QUALITY as a priority
Develop action plans to achieve QUALITY
targets through daily processes or projects
PERIODICALLY MONITOR
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Loyalty Relationship Concept 4 of 6: Invest in the Right Customers
KNOW YOUR PROFITABLE CUSTOMERS
Marketing is the art of attracting and
keeping PROFITABLE CUSTOMERS
They are persons, households, or
companies that over time yields…
REVENUE STREAM > COST STREAM
For attracting, selling to, and
serving those customers
$$$+ $$$-
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Loyalty Relationship Concept 5 of 6: Manage Your Relationships
BUILD LASTING BONDS
CRM can be practiced through…
1. Personalized Marketing
2. Customer Empowerment
3. Recommendations from Consumers
Companies can create stronger bonds with
customers by personalizing relationships.
CUSTOMER RELATIONSHIP MANAGEMENT
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Loyalty Relationship Concept 5 of 6: Manage Your Relationships
WHEN GETTING PERSONAL, BE
SYSTEMATIC
CRM
CUSTOMER RELATIONSHIP MANAGEMENT
1. Identify Prospects, Customers
2. Differentiate customers: needs, and value to company
3. Interact
4. Customize products and messages for each customer
I Do It with Care: 4-Step Framework for Personalized Marketing
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Analyzing Consumer Markets Concept 1 of 4: Behavioral Influencers
FACTORS: CULTURE
DETERMINES OUR WANTS.3
Culture Sub-Culture Social Class
Family
Key Institutions
Nationality
Religion
Racial Group
Geographic Region
Lower Lowers
Upper Lowers
Working Class
Middle Class
Upper Middles
Lower Uppers
Upper Upper
3
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Analyzing Consumer Markets Concept 1 of 4: Behavioral Influencers
FACTORS: SOCIETY
INFLUENCES WHAT WE BUY.
Reference group
Membership
group
(direct influencer)
Non-membership
groups (indirect
influencer)
Primary/informal
groups
Secondary/formal
groups
Aspirational
groups
Dissociative
groups
3
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Analyzing Consumer Markets Concept 2 of 4: Mental Processes
EMOTIONS invoke different FEELINGS.
Emotions are involved when consumer response is not rational.
• Emotional marketing campaigns help build stronger connections with
consumers.
• People can relate more to the brand instead of just associating it as
a product.
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Analyzing Consumer Markets Concept 2 of 4: Mental Processes
MEMORY creates BRAND ASSOCIATIONS.
Marketers help consumers remember certain brands by:
• Creating brand associations that become linked to the brand.
• Making sure that consumers have positive brand experience and
knowledge.
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Analyzing Consumer Markets Concept 3 of 4: The Purchase Process
ALL CONSUMERS REACH DECISIONS
DIFFERENTLY
4.
NON COMPENSATORY MODELS
Makes use of “Mental Shortcuts” or HEURISTICS
1. Conjunctive– Minimum Cut Off per Attribute
2. Lexicographic – Choose among the best of a perceived most
important Attribute
3. Elimination-by-Aspects
PURCHASE
DECISION
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Analyzing Consumer Markets Concept 4 of 4: Contextual Influences
Birds of the same Feather, Flock
Together
DECISION HEURISTICS OR RULES OF THUMB
1. Availability Heuristics
– Based on the quickness and ease with which a particular
example of an outcome comes to mind
e.g. Safety of Malaysia Airline flights
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Analyzing Consumer Markets Concept 4 of 4: Contextual Influences
First Impressions last!
DECISION HEURISTICS OR RULES OF THUMB
3. Anchoring or Adjustment Heuristics
– Consumers arrive at an initial judgment and then adjust it
based on additional information
e.g. Important First Impressions