18-2
      Defining Customer Value                                            18-2
      Defining Customer Value
                                             (Product, Service,
               Total Customer                 (Product, Service,
               Total Customer                   Personnel, &
                     Value                      Personnel, &
                      Value                    Image Values)
                                                Image Values)
                                              (Monetary, Time,
    -          Total Customer                 (Monetary, Time,
     -         Total Customer                    Energy, &
                      Cost                        Energy, &
                      Cost                     Psychic Costs)
                                               Psychic Costs)
    =
     =             Customer                     (Profit to the
                   Customer                      (Profit to the
               Delivered Value                   Consumer)
               Delivered Value                   Consumer)
                            Copyright 1999 Prentice Hall
                                                                                  18-3
      Customer Satisfaction                                                       18-3
     Customer Satisfaction
      Customer Satisfaction
     Customer Satisfaction
       Customer Satisfaction Results When a Company’s 
       Performance Has Fulfilled a Buyer’s Expectations.
             e                                     Performance Exceeds Expectations-  
             c                                            Customer is Delighted
             n
             a
             m
             r
             o
             f                Buyer’s Expectations Are Based On:
             r
             e
             P           Customer’s Past Buying Experiences       
              
             l           Opinions of Friends & Associates         
             a
             u           Marketer/ Competitor Information & Promises
             t
             c
             A
              
             s
             ’
             t
             c                                      Performance Below Expectations - 
             u
             d                                           Customer is Dissatisfied
             o
             r
             P
                                Copyright 1999 Prentice Hall
                                                                    18-4
    Total Customer Satisfaction                                     18-4
     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.
       customer value profitably.
                           Copyright 1999 Prentice Hall
                                                             18-5
  The Need for Customer Retention                             18-5
   The Need for Customer Retention
   The Key to Customer Retention is Superior Customer 
   Value and Satisfaction.   Companies Must Consider:
                  New                       Lost
                  New                       Lost
              Customer                  Customer
               Customer                  Customer
                 Costs                     Costs
                 Costs                     Costs
                           Customer
                           Customer
                            Lifetime
                            Lifetime
                             Value
                              Value
                        Copyright 1999 Prentice Hall
                                                                          18-6
                                                                           18-6
  Building Customer Satisfaction and 
   
   Building Customer Satisfaction and 
 Loyalty by Relationship Marketing
  Loyalty by Relationship Marketing
     Relationship Marketing Involves Creating, Maintaining, and 
           Enhancing Strong, Long-Term Relationships with 
                  Customers and Other Stakeholders.  
         Methods for Building Relationships Include Offering:
                                 Financial
                                  Financial
                                  Benefits
                                  Benefits
                                   Social
                                    Social
                                  Benefits
                                  Benefits
                                Structural
                                 Structural
                                     Ties
                                     Ties
                             Copyright 1999 Prentice Hall