NEW YORK INSTITUTE OF TECHNOLOGY SCHOOL OF MANAGEMENT MBA Program Course syllabus II. FACULTY Dr. Abram Poczter Mailing Address: New York Institute of Technology School of Management 107 French Chateau Old Westbury, NY 11568 Telecomm: Tel: (516) 686-7708 (Voice-mail Box, O.W.) (212) 261-1595 (Office, Metro) Fax: (516) 484-8328 Internet E-mail: apoczter@iris.nyit.edu Office hours: Tuesday: 5:00pm---5:45pm – 802 Manhattan Campus Wednesday -- 4:45-5:45pm – 802 Manhattan Campus and by appointment. I. FACULTY Dr. Abram Poczter NYIT – School of Management 107 French Chateau Old Westbury , NY 11568 Tel: (516) 686-7708 e-mail: apoczter@iris.nyit.edu II. COURSE NUMBER AND TITLE MRKT 730 - Management of Customer Value Prerequisite: MBA0142 Co-requisite: MBA0143 III. COURSE DESCRIPTION The student is provided a comprehensive appreciation of the value paradigm, essential for corporate survival and profitable growth in the global markets. 1 The value paradigm, rooted in in-depth understanding of consumer behavior, coupled with business philosophies, strategies and operations, set in the tradition of the marketing concept of business. Via an integrated marketing and operations perspective and the use of case analysis, students will learn how to blend the delivery of quality with pricing strategies to maximize the value proposition. Strategies for optimizing and communicating customer value, measuring customer satisfaction, loyalty, and relationship management are also examined. IV COURSE OBJECTIVES A. Entrance Competencies All students must have a working knowledge of marketing management, consumer behavior, and the basic issues in operations management. B. Exit Competencies At the completion of MBA0281 the student will be able to: 1) 2) 3) 4) 5) 6) V. explain what is meant by customer orientation and responsiveness understand the concept of customer value and how it impacts business decision-making discuss how the various components of customer value (quality, service, and pricing) interact to build customer satisfaction, use operations and logistics processes to improve the delivery, monitoring, and measurement of customer services, examine how the relationship management paradigm creates long-term customer value, demonstrate a mature level of communication skills, especially the ability to present and defend positions; this is predicated on a sound value/values-based, customer-driven decision-making framework which responds to the business challenges of complex, competitive, and changing global markets COURSE ACTIVITIES TO MEET OBJECTIVE Class activities will include lectures/discussions, use of various in-class exercises, and case studies which will be used to improve the students analytical skills, and to provide practice in applying customer service principles and creative strategies to "real life" marketing and management situations. Additionally, students will prepare a major team strategy project for a business, consumer, or professional service organization. Class discussions are designed to supplement and reinforce text and readings material. In many cases, however, material presented will be from new and different sources, as well as based of the instructor’s own research. The 2 presentation of this type of material is designed to augment the text, present several points of view and stimulate your thoughts in a wide variety of business situations. Meaningful and relevant contribution to class discussions is expected. A. Class Preparation and Participation Activities: Required readings must be prepared prior to the Session they are assigned for, to facilitate class discussion. Lectures are based on the material contained in the text, assigned articles, as well as the instructor's own research and readings. Furthermore, students are strongly encouraged to identify and analyze any relevant outside material and bring it to the attention of the group. B. Written Activities: TERM PAPER Type 1. Select a business or consumer service organization for your analysis. You have been hired by that company as a management consultant to evaluate and improve its customer-driven strategy (you may chose to focus on one product or SBU of the organization). Papers should reflect industry and firm-specific concerns. Recommendations should balance a customer and competitive orientation, integrating the value theory paradigm. Your client wants a comprehensive analysis of the internal and external environments (including market and competitive situation); a critical review of its current market orientation, value proposition, customer service operations and logistics processes, and marketing mix ; and the design of recommended strategic changes (e.g., discuss strategies for adding and communicating customer value) and evaluative measures. Your compensation (i.e., grade) is based on the following criteria: 1. Quality of your environmental analysis 2. Quality of your strategic analysis 3. Use of customer value concepts, course ideas, and decision-making tools 4. Use of secondary data and support materials 5. Organization and writing style Type 2. Develop a Customer Satisfaction Measurement System for a selected business The following ought to be included: 1. Overview of the company: 3 2. 3. 4. 5. Mission Goals, including the Value Proposition Marketing Strategy: Environmental trends, STP +4Ps (in Segmentation/Targeting discuss the nature of consumer demand, In Product part – discuss the generic need as related to the Value Proposition, and the service attributes). Objectives of the CSMS Description (the instruments (Questionnaire) Implementation of the CSMS VI. GRADING CRITERIA Class Participation. . . 10% HBS Case Studies. . . 30% Term Project. . . . . . . . 35% Comprehensive Final . .25% VII. REQUIRED MATERIALS Naumann, Earl (1995). Customer Value Toolkit (includes book Creating Customer Value and CD-ROM). Thomson Executive Press/ Southwestern Publishing Division, Cincinnati. ISBN #0-538-85545-2. Delivering Superior Customer Value Costin, Harry. Readings in Quality Management. The Dryden Press, 1994 VIII. RECOMMENDED READING Bateson, J. Managing Services Marketing, Dryden Press, 1995 Berry, L. On Great Service, The Free Press, 1995 Brown, S. What Customers Value Most, John Wiley and Sons, 1995 Cleland, A. and Bruno, A. The Market Value Process, Jossey-Bass, 1996 DeRose, L. The Value Network, AMACOM, 1994 4 Donnelly, J. Close to the Customer, Business One Irwin, 1992 Furlong, Carla B. Marketing for Keeps, John Wiley and Sons, 1995 Gale, B. Managing Customer Value, The Free Press, 1994 Johnson, W. and Chvala, R. Total Quality in Marketing, St. Lucie Press, 1996 Nauman, E. and Giel, K. Customer Satisfaction Measurement and Management, Thomson Executive Press, 1995 Rao, Ashok., et. al., Total Quality Management: A Cross Functional Perspective. John Wiley & Sons, 1996 Ross, Joel E, Total Quality Management: Text Cases and Readings. St. Lucie Press, 1993 Sheehy, B., Bracey, H. and Frazier, R. Winning the Race for Value, AMACOM, 1996 Stamatis, D. H., Total Quality Service, St. Lucie Press, 1996 Slywotzky, A. Value Migration, Harvard Business School Press, 1996 Vavra, T. Aftermarketing, Business One Irwin, 1992 Webster, F. Market Driven Management, John Wiley and Sons, 1994 Woodruff, R. and Gardial, S. Know Your Customer, Blackwell Press, 1996 5 IX. SUPPLEMENTAL COURSE READINGS: Band, William (1995), "Customer-Accelerated Change," Marketing Management, Winter, 47-59. Berry, Leonard and Manjit S. Yadav (1996), "Capture and Communicate Value in the Pricing of Services," Sloan Management Review, Summer, 41-51. Fredericks, Joan O. and James M. Salter, II (1995), "Beyond Customer Satisfaction, Management Review, May, 29-32. Heard, Ed (1993/1994), "Walking the Talk of Customer Value," National Productivity Review, Winter, 21-27. Jensen, Hans Rask (1995), "An Interpretation of How Competitive Advantage in Consumer Markets Can Be Achieved Through Superior Customer Value,"American Marketing Association Summer Educators Conference Proceedings, 535-540. Ozment, John and Edward A. Morash (1994), "The Augmented Service Offering for Perceived and Actual Service Quality," Journal of the Academy of Marketing Science, Vol. 22, No. 4, 352-363. Rayport, Jeffrey F. and John J. Sviokla (1995), "Exploiting the Virtual Value Chain," Harvard Business Review, November-December, 75-85. Wilson, David T. (1995) , "An Integrated Model of Buyer-Seller Relationships," Journal of Academy of Marketing Science, No. 4, 335-345. Harvard Business School Cases*: American Airlines Value Pricing: 9-594-001 Taco Bell 1994: 9-694-076 X. MARKETING WEBSITES The http://www.vlib.org Oldest catalog of the web. Unlike commercial catalogs, it is run by a loose confederation of volunteers who compile pages of key links for particular areas in which they are expert. The volunteer sites are usually academic libraries, but may be professional organizations or corporations. Even though it isn't the biggest index of the web, the VL pages are generally recognized as being among the highest-quality guides to particular sections of the web. Portions of the WWW Virtual Library related to business information 6 http://www.umi.com/proquest This could be accessed via NYIT Lan or from outside of NYIT. Obtain the User Name and the Password from the NYIT Library http://www.quirks.com - Advanced but applied articles. Excellent glossary of marketing terms http://www.crmguru.com Website dedicated to Customer Relations Management tools Many useful articles, and a free e-newsletter http://www.quirks.com - Advanced but applied articles. Excellent glossary of marketing terms VIII. TOPICS 1. Customer Orientation: An Overview > What is meant by customer orientation (CO)? > The marketing concept and market orientation > The "new" customer is choice-seeking, demanding, knowledgeable, less loyal > The customer satisfaction standard is rising due to global competition > CO requires a balance of internal marketing (successfully hiring, training, and motivating customer-responsive employees) and external marketing skills (prepare, price, distribute and promote the products/services to customers) 2. The Customer Orientation-Value Link > To succeed in business, companies must create superior customer value > The value chain (Porter): core and supporting processes > Supply chain management and the value-delivery system > Determinants of customer-added value: product, services, personnel and image > Corporate examples of value winners: IBM, Wal-Mart, Southwest Airlines, Lexus, Hewlett-Packard 3. Operations as a Competitive Weapon: Being a Value Innovator > Business organizations as systems > Defining the scope of operations: operating systems (old and new); innovation, productivity, and quality; implications of process choice > The need for customer, competitor, and market research > The focused firm: segmenting and targeting micro-markets > Creating customer-responsive goods, services, and ideas (products) > Managing core processes to drive customer satisfaction > Corporate examples of value innovators: Dell, Home Depot, Ikea, Microsoft 4. Designing Operating Systems: Rethinking the Value Proposition > Value (V) is built on 3 key factors: quality (Q), service (S), and price (P) 7 > V=Q+S+P+?; synergy is sought: the whole> parts > Analysis of operational needs: process positioning, vertical integration, designing world class operations strategies, effects of structural systems > Conducting an audit of the value proposition (VP) > Reshaping the VP triangle, Operational Strategy: how much Q, S, & P? > The VP relates to competitive differentiation/advantage 4. Base 1: Quality (The Offering) > How to define quality products > Core, expected, and augmented products > Value-added products > The quality-value relationship > The "House of Quality" model > Quality function deployment (QFD) and the voice of the customer > ISO and Baldridge Award > The quality gurus (Deming, Juran, Crosby, etc) 5 Base 2: Service (The People) > 2 components: customer service and value-added customer services > Pre-sale, sale, and post-sale services > Moments of truth and critical incidents analysis > Internal marketing primer > Training the organization to be responsive > Providing Japanese-style customer service 6. Base 3: Price (The Delivered Value) > Perceived versus received value > Activity-based costing > Value-based pricing strategies > Pricing philosophies: The “Iron triangle of 3-Cs” 7. Strategies for Adding and Communicating Customer Value > Differentiation and the unique selling proposition (USP) > Developing value-added products/services and programs > Tangibilizing intangibles: guidelines for service organizations > Using institutional promotion to build trust and corporate image > Traditional promotion - advertising, selling, sales promotion, publicity > Promotion via new technologies - databases, fax-on-demand, internet > Using atmospherics to communicate value > Selling value via integrated marketing communications (IMC) 8. Measuring and Monitoring Customer Orientation > Assessing the performance of the value proposition: key dimensions 8 - effectiveness, efficiency, and adaptability > Customer expectations versus experiences > The confirmation/dis-confirmation paradigm > Approaches to improve customer operations: identifying key control points, evaluating alternative projects, process redesign, continuous improvement, and other tools of operating managers > The Service-Quality model and SERVQUAL instrument > Strategies for increasing customer value based on gap analysis 9. Value Maximization: Creating Long-term Satisfied Customers > Evaluating customer loyalty patterns > The FRM Model - frequency, regency, and monetary value > The lifetime value of a customer > The transaction-relationship continuum (shift in emphasis from customer attraction to customer retention) > Relationship management: the new marketing paradigm > Building ongoing relationships > After marketing NOTES: 9 10