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Table 2-2: 2Setting Up a DotDot-com Presence

Attracting and Keeping Visitors How can we get more prospects to know and visit our site? How can we use marketing to spread word-of-mouth? word-ofHow can we convert visitors into repeaters? How do we make our site more experiential and real? How can we build a strong relationship with our customers? How can we build a customer community? How can we capture and exploit customer data for up-selling upand cross-selling? crossHow much should we spend on building and marketing our site? Advertising on the Internet What are the various ways that we can advertise on the Internet? How do we choose the right sites for placing our ads or sponsorship?

Adapting Marketing to the New Economy


Context factors Content factors Getting feedback

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Adapting Marketing to the New Economy


Placing Ads and Promotions Online
Banner ads Sponsorships Microsite Interstitials Browser ads Alliances and affiliate programs Push
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Infogate.com pushes targeted content and ads to those who are interested in a product or product category

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Adapting Marketing to the New Economy


Building a Revenue and Profit Model
Advertising income Sponsorship income Membership and subscriptions Profile income Product and service sales Transaction commission and fees Market research/information Referral income
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Adapting Marketing to the New Economy


How Marketing Practices are Changing: Customer Relationship Marketing
Reduce rate of customer defection Increase longevity of customer relationship Enhance growth potential through cross-selling and up-selling crossupMake low profit customers more profitable or terminate them
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Adapting Marketing to the New Economy


Focus disproportionate effort on high value customers

Table 2-3: Mass Marketing vs. One-to-One Marketing


Mass Marketing
Average customer Customer anonymity Standard product Mass production Mass distribution Mass advertising Mass promotion OneOne-way message Economies of scale Share of market All customers Customer attraction

One-to-One Marketing One-toIndividual customer Customer profile Customized market offering Customized production Individualized distribution Individualized message Individualized incentives TwoTwo-way messages Economies of scope Share of customer Profitable customers Customer retention
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Adapting Marketing to the New Economy


Four steps for One-to-One Marketing One-toDont go after everyone, identify prospects. Define customers by their needs and their value to the company. Individual interaction with customers builds stronger relationships. Customize messages, services, and products for each customer.

Adapting Marketing to the New Economy


Customer Databases and Database Marketing
Customer mailing list Business database

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Adapting Marketing to the New Economy


Data Warehouses and Data Mining
Using the database
To identify prospects To determine target market To deepen customer loyalty To reactivate customer purchases To avoid serious customer mistakes

Chapter 3 Building Customer Satisfaction, Value, and Retention


by

The Downside of Database Marketing


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PowerPoint by Milton M. Pressley University of New Orleans


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12/21/2007

Kotler on Marketing
It is no longer enough to satisfy customers. You must delight them.

Chapter Objectives
In this chapter, we will address the following questions:
What are customer value and satisfaction, and how can companies deliver them? What makes a high-performance business? highHow can companies both attract and retain customers? How can companies improve both customer and company profitability? How can companies deliver total quality?
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Defining Customer Value and Satisfaction


Customer Perceived Value (CPV)
Total customer value Total customer cost

Figure 3-1: Determinants of Customer Delivered Value

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Defining Customer Value and Satisfaction


Total Customer Satisfaction
Satisfaction

Table 3-1: Tools for Tracking and Measuring Customer Satisfaction


Complaint and suggestion systems:
A customer-centered organization makes it easy for customercustomers to register suggestions and complaints. Some customer-centered companies-P&G, General customercompaniesElectric, Whirlpoolestablish hot lines with toll-free Whirlpool tollnumbers. Companies are also using Web sites and e-mail for quick, two-way communication. twoStudies show that although customers are dissatisfied with one out of every four purchases, less than 5 percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure customer satisfaction directly by conducting periodic surveys. While collecting customer satisfaction data, it is also useful to ask additional questions to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others.

Customer Expectations Delivering High Customer Value


Value proposition ValueValue-delivery system

Customer satisfaction surveys:

Measuring Satisfaction
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Premier Dell.com is a special business-oriented part of the businessDell Web site that allows customers to interact with Dell and customize all phases of doing business with Dell.

Would you feel more brand loyalty for a company that tried to immediately resolve a complaint via E-mail, or a company that Ehad a customer service representative call within two business days to resolve the problem over the phone?
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The Nature of High Performance Business


HighHigh-performance business

Figure 3-2: The High Performance Business

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The Nature of High Performance Business


Stakeholders Processes Resources
Core competency Distinctive capabilities

Organization and Organizational Culture


Organization Corporate culture Scenario analysis
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Can you name a company that has changed the publics perception of their corporate culture? Has this effectively rehabilitated that companys image?

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Delivering Customer Value and Satisfaction


Value Chain
Value chain

Figure 3-3: The Generic Value Chain

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Delivering Customer Value and Satisfaction


Benchmarks

Delivering Customer Value and Satisfaction


The Value Delivery Network (Supply Chain)

Core Business Processes


The market sensing process The new offering realization process The customer acquisition process The customer relationship management process The fulfillment management process
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Figure 3-4: Levi Strausss ValueDelivery Network

Attracting and Retaining Customers


Partner relationship management (PRM) Customer relationship management (CRM)

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Attracting and Retaining Customers


Saturn has gained a customer loyalty rate of more than 60% by fundamentally changing the buyer-seller relationship. buyerCan you think of another company that has made a change of similar magnitude? Have they had similar results?
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Attracting Customers Computing the Cost of Lost Customers


Customer churn Lifetime value

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On the Lands End Web site, customers can click a button to talk with a customer service representative

Attracting and Retaining Customers


The Need for Customer Retention Measuring Customer Lifetime Value (CLV) Customer Relationship Management (CRM): The Key
Customer equity Three drivers of customer equity
Value equity Brand equity Relationship equity
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Figure 3-5: The CustomerDevelopment Process

Attracting and Retaining Customers


Five levels of investment in customer relationship building
Basic marketing Reactive marketing Accountable marketing Proactive marketing Partnership marketing
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Figure 3-6: Levels of Relationship Marketing

Attracting and Retaining Customers


Forming Strong Customer Bonds: The Basics
CrossCross-departmental participation Integrate the Voice of the Customer into all business decisions Create superior offering for the target market

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The H.O.G. Web site presents the benefits of joining.

Attracting and Retaining Customers


Organize and make accessible a database of customer information Make it easy for customers to reach the appropriate personnel Reward outstanding employees

Adding Financial Benefits


Frequency programs (FPs)
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Good Things

Bad Things
Make only callbacks Make justifications Accommodative language Use correspondence Wait for misunderstandings Wait for service requests Use owe-us legal language oweOnly respond to problems Use long-winded longcommunications Personality problems hidden Talk about making good on the past Fire drill and emergency responsiveness Shift blame Rehash the past
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Attracting and Retaining Customers


Adding Social Benefits

Table 3-2: Social Actions Affecting Buyer-Seller Relationships

Initiate positive phone calls Make recommendations Candor in language Use phone Show appreciation Make service suggestions Use we problem-solving problemlanguage Get to problems Use jargon or shorthand Personality problems aired Talk of our future together Routinize responses Accept responsibility Plan the future

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Attracting and Retaining Customers


Adding Structural Ties
Create long-term contracts longCharge lower price to high volume customers Turn product into longlong-term service

Customer Profitability, Company Profitability, and Total Quality Management


Measuring Profitability
Profitable customer

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Figure 3-7: Customer-Product Profitability Analysis

Figure 3-8: Allocating marketing investment according to customer value

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Customer Profitability, Company Profitability, and Total Quality Management


Increasing Company Profitability
Competitive advantage

Chapter 4 Winning Markets Through MarketMarket-Oriented Strategic Planning


by

Implementing TQM
Total Quality Management
Quality

PowerPoint by Milton M. Pressley University of New Orleans


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12/21/2007

Kotler on Marketing
It is more important to do what is strategically right than what is immediately profitable.

Chapter Objectives
In this chapter, we examine the following questions:
How is strategic planning carried out at the corporate and division levels? How is planning carried out at the business unit level? What are the major steps in the marketing process? How is planning carried out at the product level? What does a marketing plan include?
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