 CUSTOMER IS THE KING OF THE MARKET.  CUSTOMER CENTRIC APPROACH  CUSTOMER = “PROFIT CENTRE FOR THE BUSINESS”

TOTAL CUSTOMER VALUE PRODUCT VALUE SERVICES VALUE PERSONNEL VALUE IMAGE VALUE TOTAL CUSTOMER COST MONETARY COST TIME COST ENERGY COST PSYCHIC COST

 IS THE DIFFERENCE BETWEEN THE PROSPECTIVE CUSTOMER’S EVALUATION OF ALL THE BENEFITS AND ALL THE COSTS OF AN OFFERING AND THE PERCIEVED ALTERNATIVES.

 INCREASE THE BENEFITS  REDUCE THE COSTS

 IS THE PERCIEVED MONETARY VALUE OF THE BUNDLE OF ECONOMIC, FUNCTIONAL AND PSYCHOLOGICAL BENEFITS CUSTOMERS EXPECT FROM A GIVEN MARKET OFFERING.

 DEPENDS ON THE OFFER’S PERFORMANCE IN RELATION TO THE BUYER’S EXPECTATIONS.

 PAST EXPEREINCE  REFERENCE GROUPS  VIRAL MKTG  COMPETITOR’S INFORMATION  AD CLAIMS

1. CUSTOMER RETENTION 2. CUSTOMER LOSS RATE 3. MYSTERY SHOPPING 4. PERIODIC SURVEYS

 IS THE TOTALITY OF FEATURES AND CHARACTERISTICS OF A PRODUCT THAT BEAR ON ITS ABILITY TO SATISFY STATED OR IMPLIED NEEDS.

 CONFORMANCE QUALITY  AS PER THE PROMISE  PERFORMANCE QUALITY  AS PER THE FUNCTIONING

 80 / 20 RULE  ABC ANALYSIS-  Activity Based Costing  Revenues - Find total expenses related to a customer (making, selling, phone calls, gifts, visit charges )  Segment customers into different profit tiers ( platinum, gold, iron, lead )

 ALONGWITH ABC ANALYSIS  Lead customers (undesirable)  Iron customers ( less profitable but desirable)  Gold customers ( profitable )  Platimun customers ( highly profitable)

 Is the NPV of stream of future profits expected over the customer’s lifetime purchases.  ( Revenues – Expenses ) at discounted value is CLV.

 CLV = NPV of the stream of future profits expected over the customer’s lifetime purchases. (using the appropriate discounting rate )

 Is the total of the discounted lifetime values of all the firm’s customers.

VALUE EQUITYBRAND EQUITYRELATIONSHIP EQUITY

 OBJECTIVE ASSESSMENT OF THE UTILITY OF THE OFFERING BASED ON BENEFITS AND COSTS. QUALITY PRICE CONVENIENCE

 – SUBJECTIVE / INTANGIBLE ASSESSMENT OF THE BRAND BRAND AWARENESS, BRAND PERCEPTION CUSTOMER ATTITUDE

 TENDENCY TO STICK WITH THE BRAND. LOYALTY SPECIAL RECOGNITION KNOWLEDGE BUILDING PROGRAM COMMUNITY BUILDING PROGRAM

Cult branding

 Started in 1903  But in 1981 had problems due to its quality and low-priced Japanese bikes  This led to a do or die situation- improve the quality, have a strong bond with the customer or go out of business.  Due to financial crisis, couldn’t get into traditional advertising.  In In 1983 CEO Vaughn Beals announced the launch of the Harley Owners Group (H.O.G.), which he saw as a grassroots way to reconnect Harley’s brand and lifestyle with its most faithful customers.

 Despite an initial lack of acceptance, within a few years H.O.G. chapters started appearing around the country.  The spread of these groups was gorilla marketing at its best: membership was generated primarily from inexpensive promotions at dealerships and word-of- mouth.  H.O.G. groups gave enthusiasts a structured way to meet, swap stories, and schedule rides with other evangelists

 Harley made a wise move in requiring every H.O.G. chapter to have a dealership sponsor.  The result of this stipulation was a tighter relationship between Harley dealers and the customers, as well as an increase in parts and merchandise sales.  They didn’t stop with creating members groups. They started sponsoring rallies around the country. In doing so, not only did they solidify their communities, but they also used the rallies as a killer sales tool

 They bring motorcycles to the rallies for people to tryout during the Bike Week each year.  Collectively, the events attract over half a million Harley enthusiasts.  Harley takes feedback its employees receive at these events very seriously.  Opinions they receive from customers affect what is produced in product lines and the way they run their rallies.  This desire to appeal to the customer has been extended to the point that Harley offers the option of customizing their motorcycles. This allows Harley to rack up higher-margin sales, while allowing consumers who buy a custom Harley feel like they are not only joining the “Harley nation,” but that they are also exercising their own individuality.

 PROCESS OF MANAGING DETAILED INFORAMTION ABOUT INDIVIDUAL CUSTOMERS AND CAREFULLY MANAGING ALL CUSTOMER ‘TOUCH POINTS’ TO MAXIMISE CUSTOMER LOYALTY.  ‘MOMENTS OF TRUTH’- ANY FORM OF ENCOUNTER

 MAKE COMPLAINING EASY  REDUCE CUSTOMER DEFECTION/CHURN RATE  INCREASE ‘ SHARE OF WALLET’ THRU UPSELLING AND CROSS SELLING

1) BASIC MARKETING 2) REACTIVE MARKETING 3) ACCOUNTABLE MARKETING 4) PRO-ACTIVE MARKETING 5) PARTNERSHIP MARKETING

1) DEFINE AND MEASURE RETENTION RATE 2) CAUSES OF ATTRITION AND IMPROVE 3) HOW MUCH PROFIT LOST? 4) COST OF SPENDING ON IMPROVEMENT. 5) LISTENING TO CUSTOMERS

1. ADDING FINANCIAL BENEFITS FREQUENCY PROGRAMS- AMERICAN AIRLINES -PIONEER CLUB MEMEBERSHIP PETRO CARDS/ BONUS POINTS 2. ADDING SOCIAL BENEFITS CLIENTS V/S CUSTOMERS 3. ADDING STRUCTURAL TIES EXTRANET/PARTNERSHIP