MARKETING MANAGEMENT

Ateneo Standard MBA Program

S33 SPMARKMA. SAT 9:00am - 12:00nn.
 Session #3: Connecting With Customers

Chapter 5: Creating Customer Value,

Satisfaction, and Loyalty
Chapter 6: Analyzing Consumer Markets
Chapter 7: Analyzing Business Markets
 Ch. 5

Creating Long-Term Loyalty
Relationships
♦ Name a BRAND you're most loyal to? Why?
 Chapter Questions
♦ What are customer value, satisfaction, and loyalty, and
how can companies deliver them?
♦ What is the lifetime value of customers and how can
marketers maximize it?
♦ How can companies attract and retain customers and
cultivate strong customer relationships?
♦ What are the pros and cons of database marketing?
Figure 5.1 Customer-Orientations
 What is Customer Perceived Value?

♦ Customer perceived value is the

difference between the prospective
customer’s evaluation of all the benefits
and all the costs of an offering and the
perceived alternatives.
Figure 5.2 Determinants of 

Customer Perceived Value
Total customer benefit Total customer cost

Product benefit Monetary cost

Services benefit Time cost

Personal benefit Energy cost

Image benefit Psychological cost

 What is Loyalty?
Loyalty is a deeply held commitment to
re-buy or re-patronize a preferred
product or service in the future despite
situational influences and marketing
efforts having the potential to cause
switching behavior.
 Measuring Satisfaction
♦ Periodic surveys
♦ Customer loss rate
♦ Mystery shoppers
♦ Monitor competitive performance
 What is Quality?

Quality is the totality of features and

characteristics of a product or
service that bear on its
ability to satisfy
stated or implied needs.
Maximizing Customer Lifetime Value

Customer Profitability

Customer Equity

Lifetime Value
 What is 

Customer Relationship Management?

CRM is the process of carefully managing

detailed information about individual
customers and all customer touch points to
maximize customer loyalty.

A customer touch point is any occasion on which

a customer encounters the brand and product—
from actual experience to personal or mass
communications to casual observation.
 Attracting and 

Retaining Customers
♦ Reduce the rate of defection
♦ Increase longevity
♦ Enhance share of wallet
♦ Terminate low-profit customers
♦ Focus more effort on high-profit customers
 Consider these Facts:
Acquisition of customers can cost 5x more than
retaining current customers.

The average customer loses 10% of its customers

each year.

A 5% reduction to the customer defection rate can

increase profits by 25% to 85%.

The customer profit rate increases over the life of a

retained customer.
Figure 5.4 The Marketing Funnel
 Database Key Concepts
♦ Customer database ▪ Business database
♦ Database marketing ▪ Data warehouse
♦ Mailing list ▪ Data mining
 Using the
Database
♦ To identify prospects
♦ To target offers
♦ To deepen loyalty
♦ To reactivate customers
♦ To avoid mistakes
 Don’t Build a Database When
♦ The product is a once-in-a-lifetime purchase
♦ Customers do not show loyalty
♦ The unit sale is very small
♦ The cost of gathering information is too high
 Ch. 6

Analyzing 

Consumer Markets
 Chapter Questions
♦ How do consumer characteristics influence
buying behavior?
♦ What major psychological processes influence
consumer responses to the marketing program?
♦ How do consumers make purchasing decisions?
♦ In what ways do consumers stray from a
deliberate rational decision process?
Consumer Behavior
 What Influences 

Consumer Behavior?
Cultural Factors

Social Factors

Personal Factors
Figure 6.4 Consumer Buying Process

Problem Recognition

Information Search

Evaluation of alternatives

Purchase Decision

Postpurchase Behavior
Figure 6.5 Successive Sets in Decision Making
P&G’s 2 Moments of Truth

26
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 Ch. 7

Analyzing 

Business Markets
 Chapter Questions
♦ What is the business market, and how does
it differ from the consumer market?
♦ What buying situations do organizational
buyers face?
♦ Who participates in the business-to-business
buying process?
 Chapter Questions
♦ How do business buyers make their
decisions?
♦ How can companies build strong
relationships with business customers?
♦ How do institutional buyers and
government agencies do their buying?
What is Organizational Buying?
Organizational buying refers to the
decision-making process by which
formal organizations establish the need
for purchased products and services,
and identify, evaluate, and choose
among alternative brands and suppliers.
 Top Marketing Challenges
♦ Understanding customer needs in new ways;
♦ Identifying new opportunities for growth;
♦ Improving value management techniques
♦ Calculating better marketing performance and
accountability metrics;
♦ Competing and growing in global markets
♦ Countering the threat of product and service
commoditization
♦ Convincing C-level executives to embrace the marketing
concept
Characteristics of Business Markets
♦ Fewer buyers
♦ Close supplier-customer relationships
♦ Professional purchasing
▪ Multiple sales calls
♦ Many buying influences
▪ Derived demand
▪ Inelastic demand
▪ Fluctuating demand
▪ Geographically
concentrated buyers
▪ Direct purchasing
 Of Concern to Marketers
♦ Who are the major decision participants?
♦ What decisions do they influence?
♦ What is their level of influence?
♦ What evaluation criteria do they use?
 X T Session #4: Shaping The Market Offerings
N E
Chapter 12: Setting Product Strategy

Chapter 13: Designing and Managing

Services