CHAPTER 2:
CREATING AND CAPTURING STAKEHOLDER'S VALUE
VALUE: Value is the consumer's estimate of the product's overall capacity to satisfy his
or her needs.
Value is the satisfaction of customer requirements at the lowest possible cost of
acquisition, ownership and use.
Customer Value and Satisfaction
Customers form expectations about the value and satisfaction that various market
offerings will deliver and buy accordingly.
Satisfied customers buy again and tell others about their good experiences. Dissatisfied
customers often switch to competitors and disparage the products to others.
CAPTURING VALUE FROM CUSTOMERS
1. Creating Customer Loyalty and Retention
• Satisfied customers remain loyal and talk favorably to others about the company
and its products.
•
Its five times cheaper to keep an old customer than to acquire a new one.
•
Losing the customer means losing the entire stream of purchases that customer
would make over a lifetime of patronage.
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2. Growing Share of Customer
Good Customer Relationship Management can help marketers to increase their
share of customer – the share they get of the customer’s purchasing in their
product categories.
Supermarkets and Restaurants want to get more “share of stomach” Car
companies want to increase “share of garage” and airlines want greater “share of
travel”
BUILDING CUSTOMER RELATIONSHIP
Customer Relationship Management (CRM) is the overall process of building and
maintaining profitable customer relationships by delivering superior customer value and
satisfaction.
Relationship building blocks;
• Customer value – A customer buys from the firm that offers the highest
perceived value.
•
Customer satisfaction – It depends on the product’s perceived
performance relative to a buyer’s expectation.
In short customer value is a trade-off between cost and benefits associated with the
product.
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