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©2000 Prentice Hall

Objectives

Define value & satisfaction - understand Define value & satisfaction - understand how to deliver themhow to deliver them

The nature of high-performance The nature of high-performance businessesbusinesses

How to attract & retain customersHow to attract & retain customers Improving customer profitabilityImproving customer profitability Total quality managementTotal quality management


Determinants of Customer Delivered Value

Image value

Personnel value

Services value

Product value

Totalcustomer

value

Monetary cost

Time cost

Energy cost

Psychic cost

Totalcustomer

cost

Customerdelivered

value


Satisfaction is 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.


Resources Organizationandaligning...

High Performance Business

ProcessesBy improving critical business...

Stake-holders

Set strategies to satisfy key...


Mar

gin

Margin

The Generic Value Chain

Primary Activities

Supp

ort

Act

iviti

es

Procurement

Serv-ice

Technology DevelopmentHuman resource management

Firm infrastructure

InboundLogistics

Opera-tions

Out-bound

Logistics

Market-ingand

sales


Levi Strauss’ Value-Delivery Network

Competition is between Competition is between networksnetworks, not companies., not companies.The winner is the company with the better network.The winner is the company with the better network.

Delivery

Sears(Retail)

Levi’s(Apparel)

Order

Delivery

Order

Customer

Delivery

Du Pont(Fibers)

Order

Delivery

Order

Milliken(Fabric)


Satisfied Customers:

Are loyal longerAre loyal longer Buy more (new products & upgrades)Buy more (new products & upgrades) Spread favorable word-of-mouthSpread favorable word-of-mouth Are more brand loyal (less price Are more brand loyal (less price

sensitive)sensitive) Offer feedbackOffer feedback Reduce transaction costsReduce transaction costs


Levels of Relationship Marketing

Manycustomers/distributors

Mediumnumber ofcustomers/distributors

Fewcustomers/distributors

AccountableProactivePartnership

Proactive Accountable Reactive

Accountable Reactive Basic orreactive

Highmargin

Mediummargin

Lowmargin


Inactive orex-customers

Customer Development

PartnersAdvocatesClientsRepeatcustomers

First-timecustomers

Suspects

Prospects

Disqualifiedprospects


Customer/Product Profitability Analysis

P1Highly

profitableproduct

P2Profitableproduct

P3Losingproduct

P4Mixed-bag

product

Products

+++Highprofit

customer

+-

Mixed-bagMixed-bagcustomercustomer

+--

Losingcustomer

C1 C2 C3

Customers


The Profit TriangleVa

lue c

reat

ion

Competitive advantage

Internal operations

ProfitProfit


Quality

QualityQuality is the is the totality of features totality of features and characteristics and characteristics of a product or of a product or service that bear on service that bear on its ability to satisfy its ability to satisfy stated or implied stated or implied needs.needs.

#1


Review

Define value & satisfaction - understand Define value & satisfaction - understand how to deliver themhow to deliver them

The nature of high-performance The nature of high-performance businessesbusinesses

How to attract & retain customersHow to attract & retain customers Improving customer profitabilityImproving customer profitability Total quality managementTotal quality management

kotler lama 2

Education