Chapter 5 - CHAPTER 5 Creating Customer Value,...

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CHAPTER 5 Creating Customer Value, Satisfaction, and Loyalty PREPARED BY: Arceo, Mary Joyce M. Javier, Alyssa Mae L. Obligacion, Maria Teresa Z.
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BY THE END OF THIS CHAPTER, WE HOPE TO: Define the customer value, satisfaction, and loyalty, and how can companies deliver them. Define the lifetime value of customers and how can marketers maximize it. Know how can companies cultivate strong relationships. Be able to define the database marketing.
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INTRODUCTION Today, companies face their toughest competition ever. Moving from a product-and-sales philosophy to a holistic marketing philosophy, however gives them a better chance of outperforming competition. And the cornerstone of a well-conceived marketing orientation is strong customer relationships. Marketers must connect with customers-informing, engaging, and maybe even energizing them in the process. Successful marketers are the ones that fully satisfy their customers profitably. In this chapter, we spell out in detail the ways companies can go about winning customers and beating competitors.
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Building Customer Value, Satisfaction, and Loyalty Managers who believe the customer is the company’s only true “profit center” consider the traditional organization chart in Figure 5.1- a pyramid with the president at the top management in the middle, and frontline people and customers at the bottom- obsolete. FIG.5.1 Traditional Organization versus Modern FIG.5.1 Traditional Organization versus Modern Customer-Oriented Company Organization Customer-Oriented Company Organization Top Top mana- mana- gement gement Middle Middle Managem Managem ent ent Frontline Frontline people people CUSTOMERS CUSTOMERS CUSTOMERS CUSTOMERS Frontline Frontline people people Middle Middle Managem Managem ent ent Top Top man man age age ment ment (b) Modern Customer-oriented (b) Modern Customer-oriented Organization Chart Organization Chart (a) Traditional Organization (a) Traditional Organization Chart Chart
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Successful marketing companies invert the chart in Figure 5.1b. At the top are the customers ; next in importance are frontline people who meet, serve, and satisfy customers; under them are the middle managers , whose job is to support the frontline people so they can serve customers well; and at the base is top management , whose job is to hire and support good middle managers. We have added customers along the sides of Figure 5.1 (b) to indicate that managers at every level must be personally involved in knowing, meeting and serving customers.
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CUSTOMER-PERCEIVED VALUE (CPV) - is the difference between the prospective customer’s evaluation of all benefits and all costs of an offering and perceived alternatives. TOTAL CUSTOMER BENEFIT
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Chapter 5 - CHAPTER 5 Creating Customer Value,...

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