Creating/ choosing customer value

1. MODULE 2:
CREATING/CHOOSING
CUSTOMER VALUE
PREPARED & PRESENTED BY:
MS. HIMANI

2. LAYOUT OF THE PRESENTATION
• 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
• Brand positioning
• Brand equity 2Prepared by Ms. Himani

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13. CUSTOMER
PERCEIVED
VALUE
• Consumers are better educated and
informed than ever.
• Customer perceived value is the difference
between the prospective / future
customer’s evaluation of all the benefits
and all the costs of an offering and the
perceived alternatives.
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14. DETERMINANTS OF CPV
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15. LOYALTY
• 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.
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16. SATISFACTION
• A person’s feelings of pleasure or
disappointment that result from
comparing a product’s perceived
performance (or outcome) to
expectations.
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17. QUALITY
• Quality is the totality of features and
characteristics of a product or service
that bear on its ability to satisfy stated
or implied needs.
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18. PRODUCT & SERVICE QUALITY
• Quality (or grade) is the totality of features
and characteristics of a product or service
that bear on its ability to satisfy stated or
implied needs.
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19. MARKETER’S ROLE IN DELIVERING QUALITY
• Correctly identifying customers’ needs & requirements
• Communicate customer expectations properly to
product designers
• Be sure orders are filled correctly and on time
• Provide customers with proper instructions, training,
and technical assistance
• Stay in touch with customers after the sale
• Gather customer ideas for improvements and convey
them to the appropriate departments 19Prepared by Ms. Himani

20. CUSTOMER PROFITABILITY
• A profitable customer is one that over
time yields a revenue stream that
exceeds by an acceptable amount the
company’s cost stream for attracting,
selling, and servicing that customer.
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21. CUSTOMER LIFETIME VALUE
• Describes the net present value of
the stream of future profits
expected over the customer’s
lifetime purchases.
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22. CULTIVATING CUSTOMER RELATIONSHIPS
• Customer relationship management (CRM) is
the process of carefully managing detailed
information about individual customers and
all customer “touch points” to maximize
customer loyalty.
• Touch point—any occasion on which a
customer encounters the brand and product.
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23. VALUE CHAIN ANALYSIS
• M. Porter introduced the generic value chain
model in 1985. Value chain represents all the
internal activities a firm engages in to produce
goods and services.
• It is a process where a firm identifies its primary
and support activities that add value to its final
product and then analyze these activities to
reduce costs or increase differentiation.
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24. VCA MODEL
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25. CUSTOMER RETENTION
• Acquisition of customers can cost five times
more than retaining current customers.
• Customer Development Process
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26. DATABASE USES
• Identify the best prospects
• Match a specific offer with a specific
customer as a way to sell, cross-sell, and up-
sell
• Deepen customer loyalty by remembering
preferences and offering relevant incentives
and information
• Reactivate customer purchasing
• Avoid serious mistakes
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27. MARKET SEGMENTS
• Market segmentation is the process of dividing a
broad market, normally consisting of existing and
potential customers, into subsets of consumers
(known as segments), that exhibit some type of shared
characteristics.
• Geographic - Addresses, Location, Climate, Region
• Demographic/socioeconomic segmentation - Gender,
age, wage, career, education.
• Psychographic - Attitudes, values, religion, and
lifestyles
• Behavioral segmentation - (occasions, degree of
loyalty) 27Prepared by Ms. Himani

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29. TARGET
MARKET
• Whether you sell washing lines or
wiper blades, you need to
understand your customer if you
want to maximize your sales.
• Who are you selling to?
• Why should they buy your
product?
• What do they stand to gain?
• A target market is a group of
customers a business has decided
to aim its marketing efforts and
ultimately its merchandise
towards.
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30. STP
• S: Dividing markets into distinct groups which will require
separate marketing mixes.
• T: Choosing which group(s) to appeal to.
• P: Creating a clear, distinctive position in the consumer’s
mind.
• For eg.: Knorr Soups
• Segmentation: Age, Location, Lifestyle, Habits, etc.
• Targeting: Kids, youth, office goers, working women, health conscious
people
• Positioning: Easy to cook, good to eat, time and energy saver
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31. CONSUMER BEHAVIOR
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32. DEFINITION
• Consumer behaviour is the study of individuals,
groups, or organizations and the processes they use
to select, secure, and dispose of products, services,
experiences, or ideas to satisfy needs and the
impacts that these processes have on the consumer
and society.
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33. CONTINUED
• It attempts to understand the decision-
making processes of buyers, both individually
and in groups.
• It studies characteristics of individual
consumers such as demographics and
behavioral variables in an attempt to
understand people's wants.
• It also tries to assess influences on the
consumer from groups such as family,
friends, reference groups, and society in
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34. FACTORS INFLUENCING CB
• There are 4 main
types of factors
influencing
consumer behavior:
• Cultural factors,
• Social factors,
• Personal factors and
• Psychological
factors.
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36. BUYING
DECISION
PROCESS
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37. PRODUCT LIFE CYCLE
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