2. Defining customer Value and Satisfaction
It is no longer enough to satisfy customers. You
must delight them.
today’s co’s are facing the toughest competition
ever
Can outperform competitors only when they move
from product and sales concept to marketing
concept
Customer value-delivery system
Mc Donald’s- 38million people/day- 23,500
restaurants in 109 countries because of its
QSCV( Quality, Service, Cleanliness and Value)
3. Customer Value
Co’s task is to create customers
But today’s customers have array of products, brand
products, prices and suppliers
Customer delivered value- it is the difference between
the total customer value and total customer cost
Total customer Value- it is the bundle of benefits
customers expect from a given product or service
Total customer cost- it is a bundle of costs customers
expect to incur in evaluating, obtaining, using, and
disposing of the product or service
5. Customer satisfaction
Satisfaction is defined as . . .
“a person’s feelings of pleasure or
disappointment resulting from comparing a
product’s perceived performance (or
outcome) in relation to his or her
expectations.”
6. Customer satisfaction
Total Customer Satisfaction( TCS)
Satisfaction
Customer Expectations
Performance matches Expectations- satisfied
Performance falls short of Expectations- Dissatisfied
Performance exceeds Expectations- highly satisfied or delighted
Delivering High Customer Value (customer loyalty)
Value proposition- it is about the resulting experience
customers will have from the offering and their relationship with
the supplier
Value-delivery system- all the communications and channel
experiences the customer will have on the way to obtaining the
offering.
Measuring Satisfaction
7. 4 methods to track/measure customer
satisfaction
1. Complaint and suggestion systems
2. Customer satisfaction surveys
3. Ghost shopping
4. Lost customer analysis.
8. 4 methods to track/measure customer
satisfaction
1. Complaint and suggestion systems
A customer-centered organization makes it easy for
customers to register suggestions and complaints.
Some customer-centered companies-P&G, General
Electric, Whirlpool—establish hot lines with toll-
free numbers. Companies are also using Web sites
and
e-mail for quick, two-way communication.
9. 4 methods to track/measure customer
satisfaction
2. Customer satisfaction surveys
Studies show that although customers are dissatisfied with one out of every
four purchases, less than 5 percent will complain.
Most customers will buy less or switch suppliers.
Responsive companies measure customer satisfaction directly by conducting
periodic surveys.
While collecting customer satisfaction data, it is also useful to ask additional
questions to measure repurchase intention and to measure the likelihood or
willingness to recommend the company and brand to others.
Positive word of Mouth
10. 4 methods to track/measure customer
satisfaction
3. Ghost shopping
Companies can hire persons to pose as potential
buyers to report on strong and weak points experienced
in buying the company’s and competitors products
They are called mystery shoppers
Can test by how the sales people handle complain
Managers can phone their own company with
complaints and questions to see how the calls are
handled
11. 4 methods to track/measure customer
satisfaction
4. Lost customer Analysis
Companies should contact customers who have stopped
buying or switched to another supplier to learn why this
happened
Conduct exit interviews
Monitor customer loss rate
12. Premier Dell.com is a special business-oriented part of the
Dell Web site that allows customers to interact with Dell and
customize all phases of doing business with Dell.
13. Given the importance of customer value and
satisfaction, what does it take to produce and
deliver them?
Value chain and Value- Delivery
Systems
14. VALUE CHAIN
Michael Porter of Harvard proposed the value
chain
It is a tool for identifying ways to create more
customer value.
A high-level model of how businesses
receive raw materials as input, add value to
the raw materials through various processes,
and sell finished products to customers.
15. VALUE CHAIN
Every firm is a collection of activities that are
performed to design, produce, market,
deliver, and support its product.
The value chain identifies 9 strategically
relevant activities that create value and cost
in a specific business.
The 9 value-creating activities consist of 5
primary activities and 4 support activities.
17. Value Chain- Primary Activities
1. Inbound Logistics.
Here goods are received from a company's suppliers. They are stored
until they are needed on the production/ assembly line. Goods are moved
around the organization.
2. Operations.
Operations are the value-creating activities that transform the
inputs into the final product .
3. Outbound Logistics.
The goods are now finished, and they need to be sent along the supply
chain to wholesalers, retailers or the final consumer.
4. Marketing and Sales.
These activities are associated with getting buyers to purchase the
product, including channel selection, advertising, pricing, etc.
5. Service.
Service
This includes all areas of service such as installation, after-sales service,
complaints handling, training and so on.
18. Value Chain- Support Activities
1. Procurement.
This function is responsible for all purchasing of goods, services
and materials.
secure the lowest possible price for purchases of the highest
possible quality.
responsible for outsourcing (components or operations that would
normally be done in-house are done by other organisations),
ePurchasing (using IT and web-based technologies to achieve
procurement aims).
2. Technology Development.
source of competitive advantage.
Companies need to innovate to reduce costs and to protect and
sustain competitive advantage.
This could include production technology, Internet marketing
activities, lean manufacturing, Customer Relationship
Management (CRM), and many other technological
developments.
19. Value Chain- Support Activities
3. Human Resource Management (HRM).
Employees are an expensive and vital resource.
An organisation would manage recruitment and selection,
training and development, and rewards and remuneration.
The mission and objectives of the organisation would be driving
force behind the HRM strategy.
4. Firm Infrastructure.
This activity includes and is driven by corporate or strategic
planning.
It includes the Management Information System (MIS), and
other mechanisms for planning and control such as the
accounting department.
20. Value Delivery Network
To be successful the firm also needs to look for
competitive advantages beyond its own operations,
in to value chain of its suppliers, distributors and
customers.
Many companies today have partnered with specific
suppliers and distributors to create a superior value
delivery network also called a supply chain.
