strategic management
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Group2_Marketing.pptxCreating Customer Value and Product Policy
Group 2
Creating Customer Value
Definition
The value proposition
Measuring Customer Satisfaction & loyalty
Leveraging Net Promoter Score (NPS)
Maximizing Customer Value – Profitability, Equity & Lifetime Value
Customer-Product Profitability Analysis
Customer Relationship Management & its framework
Definition – Creating Customer Value
Analyzing and designing how a customer perceives a company’s product offerings and services
Academic Definition is “the perception of what a product or service is worth to a Customer versus the possible alternatives” (Kerin & Hartley, 2020)
As an equation, Customer value = Benefits – Cost
The value proposition
Identifying reasons or factors that a client or customer would consider when choosing a service or product
It is a part of company’s overall marketing strategy including R&D
Customer perceived value can differ from company value proposition, which may include functional, monetary, social and psychological attributes
For instance, the brand giant APPLE INC. has a value proposition ‘The Experience is the Product’
Measuring Customer Satisfaction $ Loyalty
Customer satisfaction is a key issues for every company wishing to increase customer loyalty and thereby create a better business performance.
Company success is about your customers ability to achieve their desired outcomes, and not yours.
We all know how competitive today's customer centric market is and how important it is for a company to know how happy their customers are. To measure this, they use a technique called Net promoter Score (NPS).
This NPS survey helps the company to improve their product and service and also ultimately improve their satisfaction.
The rise of customer satisfaction is an important concern as the happier customers the company gets more new customers.
Net Promoter Score (NPS)
We all know how competitive today's customer centric market is and how important it is for a company to know how happy their customers are. To measure this, they use a technique called Net promoter Score (NPS).
Net Promoter Score or also known as NPS is the measuring tool used by the company to measure the overall experience of the customer.
I am using the below simple example to explain you all how the NPS works and how we all are part of it in our daily life’s.
Let's say you are a T-Mobile customer, and you call there call center for some technical issues with your network.
After solving your technical issues, the operator asks for feedback between numbers 0-9.
Net Promoter Score (NPS)
The customer placing themselves at points 9 or 10 are called promoters
The proportion of customers placing themselves between 0 to 6 are called detractors.
Respondents on the scale point of 7 and 8 are called neutrals.
To summarize the Net Promoter Score I would just say it’s the difference between the proportion of the customer placing themselves
Maximizing Customer Value
Types of Customer Values:
Social
Functional
Experimental
Economic
Maximizing Customer Value
Customer-Product Profitability Analysis
Customer-Product Profitability Analysis
Segmenting customers base to determine the revenues and cost attributable to each segment.
Key steps for the approach:
Customer Segmentation
Revenue attributable to each segment
Use Activity-based costing to determine the cost attributable to each segment
Analyze the profitable versus the less profitable or unprofitable customer segments
Develop strategies to maximize profits from profitable customers and reduce or eliminate less profitable or non-profitable customers
Review the impact of the new strategies on the performance of the customer segments
CRM & its framework
Customer relationship management (CRM) is a system for managing a company's interactions with current and future customers.
Customer relationship management is the combination of practices, strategies and technologies that companies use to manage and analyze the customer interactions and data through out the customer life cycle.
Implementation
Customer relationship management implementation is the process of deploying CRM software for the companies to track and manage its communication with current and potential customers.
Phase-1: Pre-Implementation Phase
Phase-2: Actual Implementation Phase
Phase-3: Post-Implementation Phase
Proposed Framework
Major Components
Technology
People
Business process
CRM Implementation Failures
Lack of customer-centric culture
Lack of readiness process
Lack of good management support
CRM Success Factors
Even after failure, there are success factors that are received with increasing attention within the literature review of CRM.
Success factors are below:
Top management commitment
CRM Strategy
Data management
Culture change
This propose framework proved feasible implementation and provided a useful guidance for successful implementation for CRM projects
Product Policy
Definition
Attributes related to product policy
Survival
Scalability
Flexibility
Growth
Product Life Cycle – real life example
Conclusion
Definition – Product Policy
Product policy is defined as the broad guidelines related to the production and development of a product. It is like a long-term planning with respect to the product-mix of the company in order to deliver maximum customer satisfaction.
The product policies are general rules set up by the management itself in making product decisions. Good product policies are the basis on which the right products are produced and marketed successfully.
Attributes related to product policy
Survival
The main objective of any company is to stay in the market profitably
Organizations rely on price to cover the costs of production, pay expenses, and provide the profit incentive necessary to continue to operate the business.
Survival is closely linked to
New product development
Profit
Sales
Market share
Image
Attributes related to product policy (cont..)
Scalability
The companies should use its resources properly to make the most of its valuable resources. With time the company needs to develop economies of scale to improve profits
Bigger doesn’t always mean better.
Scaling sometimes can create needless complexity, hinder collaboration, and slow your organization down.
Attributes related to product policy (cont..)
Product Flexibility
The product policy needs to be flexible to the changing needs of the customers, government regulations, global trends and economy.
4 Reasons:
Introduce a new or modified product.
Have the variety of products available grow.
Able to produce different quantities/volumes.
Able to change the timings of delivery in a product/service.
Being flexible gives the potential for a business to hold a competitive edge.
Attributes related to product policy (cont..)
Growth
Based on the long-term goals of the company the policies are defined to get a good growth in the market
Organization Growth depends on financial situation, the competition and even government regulation
Ex: Zantac –Ulcer Medication-Financial.
Growth Strategies :Market penetration, market expansion, product expansion, diversification and acquisition.
Product Life Cycle
Iphone is a perfect example
Stages include Introduction, Growth, Maturity and Decline (Saxena, 2019)
Each stages has its own unique marketing startegies
Definition – sequence of stages through which a product pass (Kerin & Hartley, 2020)
Conclusion
A firm must understand key metrics to identify the customer value creation
It is important to take account of customer’s perceptions about the product
Quality of a product must be analyzed via customer surveys, feedback etc.
Product policy guidelines must be followed to deliver a top notch customer satisfaction
Last but the least, the marketing strategy must include customer centered values and suggestions
References
Almotairi. M. (2009). A Framework for Successful CRM Implementation
Kerin, R. A., & Hartley, S. W. (2020). Marketing: The core. New York, NY, New York: McGraw-Hill Education
Saxena, D. (2019, August 08). Product life cycle of Apple Iphone [E-Book]. Retrieved February 13, 2021, from https://www.superheuristics.com/product-life-cycle-iphone/
Hosseini, M. R., Banihashemi, S., Chileshe, N., Namzadi, M. O., Udaeja, C., Rameezdeen, R., & McCuen, T. (2016). BIM adoption within Australian Small and Medium-sized Enterprises (SMEs): an innovation diffusion model. Construction Economics and Building, 16(3), 71–86. https://doi.org/10.5130/ajceb.v16i3.5159
Maduku, D. K., Mpinganjira, M., & Duh, H. (2016). Understanding mobile marketing adoption intention by South African SMEs: A multi-perspective framework. International Journal of Information Management, 36(5), 711–723. https://doi.org/10.1016/j.ijinfomgt.2016.04.018
Olson, E. M., Olson, K. M., Czaplewski, A. J., & Key, T. M. (2021). Business strategy and the management of digital marketing. Business Horizons, 1–9. https://doi.org/10.1016/j.bushor.2020.12.004
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