Mktg 470 Exam 4 Study Guide

Mktg 470 Exam 4 Study Guide - Marketing 470 Exam 4 Study...

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Marketing 470 – Exam 4 Study Guide Chapter 12 Reasons why loyal customers are seen as more profitable (Slide 3) - Profit from price premium - Profit from reference - Profit from reduced operating costs - Profit from increased usage - Base profit/loss - - Measuring Customer Equity (Slide 5) - Acquisition: - Revenues (application fee + initial purchase); - Costs (marketing + credit check + account set up) - Projected Annually: - Revenues (annual fee + sales + service fees + value of referrals); - Costs (account management + cost of sales + write-offs) - Value of Referrals: - Percentage of customers influenced by other customers - Net Present Value: - Sum anticipated annual values (future profits); discounted each year into the future - - Service recovery as it relates to confidence benefits (Pgs. 312 & 326) - Confidence Benefits – included feelings by customers that in an established relationship there was less risk of something going wrong, confidence in correct performance, ability to trust the provider, lowered anxiety when purchasing, knowing what to expect, and receipt of the firm’s highest level of service. - Effective complaint handling and excellent service recovery are central to keeping unhappy customers from switching providers. Well-managed firms make it easier for customers to voice their problems and respond with suitable service recovery strategies. In that way, customers will remain satisfied, and this will reduce the intention to switch. - - 1. Deepening the Relationship – bundling/cross-selling services makes switching a major effort; customers benefit from consolidating their purchasing. 2. Reward-Based Bonds – financial bonds; non-financial rewards; intangible rewards; reward-based programs are too easy to copy. 3. Social Bonds – based on personal relationships; harder to build and imitate. 4. Customization Bonds – customized service for loyal customers; customers may find it hard to adjust. 5. Structural Bonds – stimulate loyalty through structural relationships between provider and customer; difficult for competition to draw customers away when they have integrated their way of doing things with existing supplier. - - Loyalty Programs - Sustainable Competitive Advantage? (Page 322) - Reward-Based Loyalty Programs are relatively easy for other suppliers to copy, so they seldom provide sustained competitive advantage. - Customer Relationship Management (CRM) - An effective CRM strategy includes 5 key processes: 1. Strategy Development – involves the analyzing of business strategy, including the company’s vision, industry trends, and competition.
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2. Value Creation – translates business and customer strategies into value propositions for customers and the firm. 3.
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This note was uploaded on 10/17/2011 for the course MKTG 470 taught by Professor Dr.valenti during the Spring '11 term at Nicholls State.

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Mktg 470 Exam 4 Study Guide - Marketing 470 Exam 4 Study...

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