Chapter 2 Building Customer Satisfaction Marketing Management Tenth Edition Objectives Define value & satisfaction - understand how to deliver them The nature of high-performance businesses How to attract & retain customers Improving customer profitability Total quality management Determinants of Customer Delivered Value Image value Personnel value Services value Product value Total customer value ary cost Time cost Energy cost Psychic cost Total customer cost Customer delivered value Satisfaction is a person’s feelings of pleasure or disappointment resulting paring a product’s perceived performance (or e) in relation to his or her expectations. Resources Organization and aligning... High Performance Business Processes By improving critical business... Stake- holders Set strategies to satisfy key... Margin Margin The Generic Value Chain Primary Activities Support Activities Procurement Serv- ice Technology Development Human resource management Firm infrastructure Inbound Logistics Opera- tions Out- bound Logistics Market- ing and sales Levi Strauss’Value-work Competition is works, panies. The winner is pany with the work. Delivery Sears (Retail) Levi’s (Apparel) Order Delivery Order Customer Delivery Du Pont (Fibers) Order Delivery Order Milliken (Fabric) Satisfied Customers: Are loyal longer Buy more (new products & upgrades) Spread favorable word-of-mouth Are more brand loyal (less price sensitive) Offer feedback Reduce transaction costs Levels of Relationship Marketing Many customers/ distributors Medium number of customers/ distributors Few customers/ distributors Accountable Proactive Partnership Proactive Accountable Reactive Accountable Reactive Basic or reactive High margin Medium margin Low margin Inactive or ex-customers Customer Development Partners Advocates Clients Repeat customers First-time customers Suspects Prospects Disqualified prospects