18-1
18-1
Chapter 18
Chapter 18
Competitive Strategies:
Building Lasting Customer
Relationships
PRINCIPLES OF MARKETING
Eighth Edition
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18-2
Defining Customer Value
Defining Customer Value
-=
=
Total Customer
Value
Total Customer
Value
Total Customer
Cost
Total Customer
Cost
(Product, Service,
Personnel, &
Image Values)
(Product, Service,
Personnel, &
Image Values)
(Monetary, Time,
Energy, &
Psychic Costs)
(Monetary, Time,
Energy, &
Psychic Costs)
Customer
Delivered Value
Customer
Delivered Value
(Profit to the
Consumer)
(Profit to the
18-3
18-3
Customer Satisfaction
Customer Satisfaction
Customer Satisfaction
Customer Satisfaction
Customer Satisfaction Results When a Company’s
Performance Has Fulfilled a Buyer’s Expectations.
Buyer’s Expectations Are Based On: Customer’s Past Buying Experiences Opinions of Friends & Associates
Marketer/ Competitor Information & Promises
ro
d
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ct
’s
A
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tu
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l
P
er
fo
rm
a
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ce
Performance Exceeds Expectations- Customer is Delighted18-4
18-4
Total Customer Satisfaction
Total Customer Satisfaction
•
Highly satisfied (delighted) customers produce
Highly satisfied (delighted) customers produce
benefits:
benefits:
–
They are less price sensitive,
–
They remain customers longer,
–
They talk favorably about the company and products to
others.
•
Delighted customers have emotional and rational
Delighted customers have emotional and rational
preferences for products, and this creates high
preferences for products, and this creates high
customer loyalty.
customer loyalty.
•
Therefore, the purpose of Marketing is to generate
Therefore, the purpose of Marketing is to generate
customer value profitably.
18-5
18-5
The Need for Customer Retention
The Need for Customer Retention
New
Customer
Costs
New
Customer
Costs
Lost
Customer
Costs
Lost
Customer
Costs
Customer
Lifetime
Value
Customer
Lifetime
Value
18-6
18-6
Building Customer Satisfaction and
Loyalty by Relationship Marketing
Building Customer Satisfaction and
Loyalty by Relationship Marketing
Structural
Ties
Structural
Ties
Social
Benefits
Social
Benefits
Relationship Marketing Involves Creating, Maintaining, and
Enhancing Strong, Long-Term Relationships with
Customers and Other Stakeholders.
Methods for Building Relationships Include Offering:
18-7
18-7
Value Chain
Value Chain
Firm Infrastructure
Firm Infrastructure
Human Resource Management
Human Resource Management
Technology Development
Technology Development
Procurement
Procurement
Inbound Logistics
Inbound
Logistics OperationsOperations OutboundLogistics Outbound
Logistics
Marketing and Sales
Marketing and
Sales Service Service
M
ar
g
in
Support Activities
18-8
18-8
Customer Value-Delivery Network
Customer Value-Delivery Network
18-9
18-9
Total Quality Marketing
Total Quality Marketing
Pursuing
a Total
Quality
Marketing
Strategy
Pursuing
a Total
Quality
Marketing
Strategy
Necessary But May Not Be Sufficient
Necessary But May
Not Be Sufficient Eyes of the CustomerQuality is in the Quality is in the Eyes of the Customer
Does Not Cost More
Does Not
Cost More Every CompanyActivity Every Company
Activity
Quantum Leaps
Quantum
Leaps Total EmployeeCommitment Total Employee
Commitment
Cannot Save Poor Product
Cannot Save Poor Product
Continuous Improvement
Continuous Improvement
High Quality Partners
18-10
18-10
Identifying Competitors
Identifying Competitors
Assessing Competitors
Assessing Competitors
Determining Objectives
Determining Objectives
Selecting Competitors to
Attack and to Avoid
Selecting Competitors to
Attack and to Avoid
Competitor Analysis
Competitor Analysis
Identifying Strategies
Identifying Strategies
Assessing Strengths and
Weaknesses
Assessing Strengths and
Weaknesses
Estimating Reaction
Patterns
18-11
18-11
Developing Competitive Marketing
Strategies
Developing Competitive Marketing
Strategies
Overall Cost
Leadership
Overall Cost
Leadership
Differentiation
Differentiation
Focus
Focus
Middle of
the Road
Middle of
18-12
18-12
Developing Additional Competitive
Marketing Strategies
Developing Additional Competitive
Marketing Strategies
Product
Leadership
Product
Leadership
Operational
Excellence
Operational
Excellence
Customer
Intimacy
Customer
Intimacy
Value Disciplines
18-13
18-13
Market Leader
Market Leader
Firm with the LargestMarket Share
Market Leader
Market Leader
Firm with the Largest Market Share
Expand Total Market
Protect Market Share
Expand Market Share
Expand Total Market
Protect Market Share
Expand Market Share
Competitive Positions
Competitive Positions
Market Challenger
Market Challenger
Runner-Up Firms that Fight Hard to IncreaseMarket Share
Market Challenger
Market Challenger
Runner-Up Firms that Fight Hard to Increase
Market Share
Market Followers
Market Followers
Runner-Up Firms that Want to Hold Their Share WithoutRocking the Boat
Market Followers
Market Followers
Runner-Up Firms that Want to Hold Their Share Without
Rocking the Boat
Market Nichers
Market Nichers
Firms that Serve SmallSegments Not Being
Market Nichers
Market Nichers
Firms that Serve Small Segments Not Being
Follow Closely
Follow at a Distance
Follow Closely
Follow at a Distance
By Customer, Market,
Quality-Price, Service
By Customer, Market,
Quality-Price, Service
Full Frontal Attack
Indirect Attack
18-14
18-14
Balancing Customer and
Competitor Orientations
Balancing Customer and
Competitor Orientations
Product
Orientation
Product
Orientation
Competitor
Orientation
Competitor
Orientation
Customer
Orientation
Customer
Orientation
Market
Orientation
Market
Orientation
C
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C
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p
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it
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-C
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No