Customers form expectations of value and act upon them (Kotler 2005).

Theycompare the actual value receive in consuming the product to the valueexpected, and this affects their satisfaction and repurchase behaviour.Customers add value from; product, service, personnel and image = totalcustomer value (Kotler 2005). The total of these four value factors that a buyerreceives from a marketing offer. Total customer cost- the total of the all the monetary, time, energy and psychiccosts associated with a marketing offer (Kotler 2005). Customer delivered value - the difference between the total customer vale andthe total customer cost of a marketing offer- Profit to the customer (Kotler2005).Appearance of customers non-value-maximising behaviour- due to long termfriend ship with salesperson, policy of buying at the lowest price or customer isshort of cash (Kotler 2005).Expectations are based on the customers past buying experiences. The opinionsof friends and associates, and marketer and competitor information andpromises (Kotler 2005). Tracking customer satisfaction ; Complaint and suggestion system ;A customer-centred organisation makes it easy for customers to makesuggestions or complaints, Virgin trains, immediately hand out customercomplaint forms as soon as there is any reason for passengers to complain, suchas train being delayed. Another example is that of Richer sounds, they give theircustomers a card with the shops team, which is a free post letter addressed to Julian richer (the chain owner) with a very humble message explaining theowners personal interest in his customers suggestions and comments regardingthe customer service within the shop (Kotler 2005). Customer satisfaction surveys ; Note: Rather than complain most customers switch suppliers (Kotler 2005) .One out of every four purchases results in consumer dissatisfaction, but fewerthan 5 % of dissatisfied customers complain (kotler 2005).Responsive companies take direct measures of customer satisfaction byconducting regular surveys. They send questionnaires or make telephone callsto a sample of recent customers to find out how they feel about various aspectsof the companys performance. (Kotler 2005).

Ghost shopping; This involves researchers posing as buyers. These ghost shoppers can evenpresent specific problems in order to test whether the companys personnelhandle difficult situations well. (Kotler 2005)Lost customer analysis;Companies should contact customers who have stopped buying or who haveswitched to a competitor, to learn why this has happened. Conducting exitinterviews (Kotler 2005).2000)- David walters, Implementing value strategy through the value chain,Management Decision, 38,3 (2000), pp. 160-78 Value chain - A major tool for identifying ways to create more customer value(Kotler 2005). The value chain breaks the firm into nine value- creating activities in an effort tounderstand the behaviour of costs in the specific business and the potentialsources of competitive differentiation. The nine value-creating activities include5 primary activities and four support activities. The primary activities involveInbound logistics --the sequence of bringing materials into the business. O p e r a t i o n s - - o p e r a t i n g o n t h e m a t e r i a l s . Outbound logistics--sending the, operated on materials, out.Marketing and salesmarketing the outbound materials.Serviceservicing the materials that have been s o l d . The support activities occur within each of these primary activities, whereby thecompany pulls in its resources from all departments. (Kotler 2005).For a long time, firms have focussed on the product as the primary means of adding value, but customer satisfaction also depends upon other stages of thevalue chain (Jose M.M Bloemer 1992)- Jose M. M Bloemer and Jos G.A.M Lemmick,the importance of customer satisfaction in explaining brand and dealer loyalty, Journal of marketing management, 8, 4 (1992), pp. 351-64Under the value-chain strategy concept, the firm should examine its costs andperformance in each value-creating activity to look for improvements. It shouldalso estimate its competitors costs and performances as benchmarks. To theextent that the firm can perform certain activities better than than itscompetitors, it can achieve a competitive advantage. (Kotler 2005)

The firms success depends not only on how well a department does its work ,but also on how well the activities of various departments are coordinated. Too often individual departments maximise their own interests rather thanthose of the whole company and the customer. Individual departmentshave erected walls that impede the delivery of quality to the customer.(Kotler 2005)Companies used to view their suppliers and distributers as cost centres and, insome cases, as adversaries. However now they are selecting partnerscarefully and working out mutually profitable

strategies. Increasingly intodays marketplace, competition no longer takes place betweenindividual competitors. Rather it takes place between the entire valuedelivery systems created by these competitors. (Kotler 2005)Marketing is responsible for designing and managing a superior value deliverysystem to reach target customer segments. Todays marketing managersmust think not only about selling todays products , but also how tosimulate the development of improved products, how toWork with other departments in managing core business processes and how tobuild better external partnerships.(kotler 2005)Quality- the totality of features and characteristics of a product or service thatbear on its ability to satisfy stated or implied needs. (Kotler)Internet companies are willing to pay a high price for prospective customersbecause they hope to turn them into profitable customers. (Kotler 2005) Profitable customer - a person, household or company whose revenues overtime exceed, by an acceptable amount the companys costs of attracting, sellingand servicing that customer. (Kotler 2005) Customer lifetime value - the amount by which revenues from a givencustomer over time will exceed the companys costs of attracting, selling andservicing the customer. (Kotler 2005).High customer churn involves higher costs than if a company retained all itscustomers and acquired no new ones. (Kotler 2005)Relationship marketingthe process of creating, maintaining and enhancingstrong, value laden relationships with customers and other stakeholdes.(Kotler2005) The goal of relationship marketing is to deliver long term value to customers andthe measure of success is long term customer satisfaction. It involves buildingrelationships at many levels, economic, social, technical, and legal- resulting inhigh customer loyalty (Kotler 2005).3 types of relationships (Kotler 2005); Accountable- the salesperson calls the customer a short period after the salehas been made to check whether the product is meeting the customersexpectations. The salesperson also solicits fromt he customer any productimprovement suggestions and any specific disappointments. This informationhelps the company to continuously improve its offering.Proactivethe salesperson or others in the company phone the customer fromtime to time with suggestions about improved product use or helpful newproducts.Partnerships- the company works continuously with the customer and with othercustomers to discover ways to deliver better value.Another way in which to build strong customer relations is via the addition of benefits (social or financial), via the use of air mile loyalty cards, wherecustomers may choose to pay more, in order to add miles together so as toeventually receive a free ticket.Smart companies capture information at every touch point (Kotler). Examplebeing tescos RFID and their ability to

understand the customer, their weaknesslies within relationship management with their suppliers, etc.CRM consists of sophisticated software and analytical tools that integratecustomer information from all sources, analyse it in depth, and apply the resultsto build better customer relationships. Through CRM companies such as MVC the music store are able to know whatthey have, brought in and sold so as to target specific customers on promotionsas they know that they exist and how many there are, so via news were able toattract customers who like country music over their promotions during theNashville country music festival. And Ping the golf equipment manufacturer havecustomer specific data on products sold and brought in or manufactured in theirdata-warehouse with specific details such as grip size and assembly instructions,so all a customer has to do is call in and give then their serial number and pingwill ship the exact club to them within 2 days, when otherwise this process wouldtake a few weeks.(Kotler 2005) Transaction marketing is good for customers with short time horizons wherethey may switch suppliers due to the products in the market being more or lessundifferentiated...DELL (Kotler 2005)Relationship marketing can be beneficial in the case of customers with long timehorizons, as the switching costs are quite high. (Kotler).Any company with a website can market globally- (Business week3/5/1999)-intel is eyeing E-commerce p.52Consumers can not only order booksor CDs, but virtually try on clothes at the Gap website and sit in the latestmodel car from BMW, Ford, Mercedes-benz, at any of these auto makers sites.(Fortune 7/12/1998)Commerce- No longer a Novelty, Internet Shopping TakesOff, Fortune, pp.245-46.

Toys R Us invested $80 million into its online retailing services in its quest tobecome the number-one toy retailer on the internet. (Kotabe 2001) Globalmarketing management, Masaaki Kotabe and Kritiaan helsen 2 nd edition. With the current recession prevailing market, there are three types of end consumers,these are; flight to thrifty, flight to quality, flight to provenance. (Nikala Lane, lecture5, 2009) Flight to thrifty is used to describe those customers, who have not been directlyaffected by the recession. They develop the habit of resorting to cheaper forms of suppliers,an example being; grocery shopping at Aldi. Flight to quality is used to describe thosecustomers who may have been affected by the recession but choose to treat themselves, andso resort to Waitrose and Sainsbury. Finally flight to provenance describes those customerswho have weathered the recession and continue to shop at delicatessens.A big company such as Tesco, which makes a strong effort in order to identify itscustomer requirements via means such as their RFID, are seen to, in the near future, to bestuck in the middle, when it comes to the post recession customer base. The consumers havediversified on price, and quality, those choosing price shop at aldi,

whilst those choosingquality choose waitrose or their delicatessens.Tesco markets themselves with SCM, NigelF peircy and Nikala Lane, Strategising the sale organization, oxford universitypress, 2009.