Discussion Questions

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Narration

Slide 1

Scene 1

[Ed, Samantha – Ed’s Office]

Ed and Samantha meet in the morning to discuss the next steps in the tablet PC launch.

(Display disconfirmation paradigm graphic)

MKT500_9_1_Samantha-1: Good morning, Ed. How are you doing today?

MKT500_9_1_Ed-1: Good morning, I’m doing quite well. What about yourself?

MKT500_9_1_Samantha-2: Good, thanks. I’m really proud of the progress we’ve been making with our tablet launch. We have come a long way, and I’m excited for the next two steps.

MKT500_9_1_Ed-2: As always, I love your enthusiasm, Samantha! I spoke with Carl earlier. He said that now that we have selected our social media and defined our key performance indicators, we need to move forward with defining methods for measuring customer satisfaction and identifying marketing research initiatives for the new product launch.

MKT500_9_1_Samantha-3: Yes, customer evaluations come in many forms: customer satisfaction, perceptions of quality, customers’ intentions to repurchase the same brand or from the same provider, and the likelihood that a customer will generate word-of-mouth speaking favorably to friends, family, co-workers, and so on.

MKT500_9_1_Ed-3: As we have experienced in previous launches, a satisfied customer can contribute to the bottom line. Given the hierarchy of customer behavior, from awareness to trial to repeat and loyalty, the hope is to satisfy new customers so that they become loyal. As we have experienced with our current products, truly loyal customers love the brand, purchase frequently, are zealous in telling others about it, and are even willing to pay more for the brand and all it means to them.

MKT500_9_1_Samantha-4: Well, we are already using social media as one of our main media for advertising the new tablets. Don’t they have metrics built in their sites to measure satisfaction?

MKT500_9_1_Ed-4: Yes, but we need to take a deeper look into customer expectations.

The source of expectations that consumers trust the most is their own experience. The experience can be direct or indirect. As you would imagine, a direct experience is a consumer’s first-hand experience using a product, shopping at a store, using a service, etcetera, whereas an indirect experience might include reading a product description or visiting a chain restaurant in a new town for the first time: you anticipate that your experience there would be similar to other restaurants you have directly experienced. Sometimes the indirect experiences seem less related, or the purchase happens infrequently, so consumers do not have a lot of direct experiences to draw upon.

If consumers have little personal expertise on which to make brand choices, their next favorite and trusted source of information is their friends. Sometimes consumers seek opinions from people who are experts, perhaps co-workers. Social media also exerts a good deal of influence on their behaviors.

MKT500_9_1_Samantha-5: Since we will be measuring our customers’ satisfaction, can you explain the relationship between customers’ expectations and their level of satisfaction?

MKT500_9_1_Ed-5: Absolutely. Customer Evaluations is equal to Perceived Performance minus Expectations. Take a look at this Disconfirmation Paradigm. According to the Disconfirmation Paradigm, the consumer's degree of overall satisfaction is a function of the value the customer expects in relation to the value actually received.

(Display disconfirmation paradigm graphic)

Based on this paradigm, there are three possible customer satisfaction outcomes:

One - If perceived performance surpasses the customers’ expectations, then customers are delighted!

Two - If perceived performance meets the customers’ expectations, then customers are satisfied; and

Three - If perceived performance falls short of the customers’ expectations, then customers are dissatisfied.

Marketers have found that customers routinely evaluate the core attributes of the purchase itself, such as reliable performance, and when applicable, the interpersonal aspects of service that may surround the purchase - for example, a frontline that is responsive and able to offer personalized attention to a customer’s unique needs.

MKT500_9_1_Samantha-6: This is good information, and the disconfirmation process makes sense to me. But how do we measure quality and customer satisfaction?

MKT500_9_1_Ed-6: It is not possible for marketers to precisely measure customers’ perceptions of quality and satisfaction. There are occasionally objective measures of quality; however, marketers rarely can set precise measures of quality standards and expect consumers to conform.

MKT500_9_1_Samantha-7: Well, could we use RFM?

MKT500_9_1_Ed-7: Yes. RFM, or Recency, Frequency and Monetary Analysis, is a great tool used in marketing to measure customer satisfaction.

RFM models emphasize past customer behaviors, and allow us to extrapolate these into future earnings of customer segments.

The best customer relationship management programs, or CRMs, begin with the RFM behaviors, but go beyond these data to learn more about the customers. With better customer knowledge, companies can provide specially tailored offerings through cross-selling efforts. Specifically, CRM databases typically contain:

· contact information,

· demographics,

· lifestyle and psychographic data,

· Internet information,

· transaction data,

· rates of response to marketing offers, and

· complaints

MKT500_9_1_Samantha-8: Very interesting, Ed. I hadn’t realized the effects RFM, CRM and past behaviors have on the future of customer satisfaction. But what about customer lifetime value, or CLV?

MKT500_9_1_Ed-8: I’m glad you asked this, Samantha. I have a video that explains customer lifetime value that we can watch.

Slide 2

Customer Lifetime Value Video

http://youtu.be/9EN9aHQsqBA

Slide 3

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

MKT500_9_1_Samantha-9: Thanks for sharing that video, Ed. That explains the process very well. It appears that the basic CLV calculation is very simple. Once we create the basic template in a spreadsheet, we can extend it to other scenarios and make it more sophisticated.

I feel that we need to think of CRM as a holistic strategic approach in managing customer relationships to create shareholder value. From this view, CRM is our core business initiative, and Golds Reling must maintain their customer-centric philosophy.

MKT500_9_1_Ed-9: Yes, the strategy is to win and retain profitable customers. Alternatively, marketing can be more analytical about CRM as plans are enacted to route and analyze data and store information appropriately. Finally, marketing can get quite operational, when implementing plans to capture and create those databases. Customer information must be collected, automated, and integrated to be useful to the firm.

MKT500_9_1_Samantha-10: What are some common methods companies frequently use to win and retain customers?

Slide 4

Interaction

Click the tabs to learn more about on gathering customer information.

Tab A: Surveys . Surveys are ideal instruments to obtain customers’ perceptions. Survey results are more actionable if they measure multiple facets of the customers’ thoughts about the firm.

Tab B: Employees. In terms of customer dissatisfaction, research suggests that the primary means to regaining the customer is through an empowered frontline employee. That employee needs to be capable of immediately redressing the problem, empathizing with the customer, and offering a perk for the customer’s troubles.

Tab C: Price Discounts. Customer satisfaction is thought to be the first step in a longer-term relationship. Early efforts at customer relationship marketing (CRM), were frequently driven by price discounts, reasoning that a company could buy a little loyalty by locking in their customers.

Tab D: Loyalty Programs. A loyalty program invites customers to become members to enjoy certain benefits for frequent or heavy purchasing, whereas a CRM program is a tool in the company that tracks spending, regardless of whether customers are segmented into loyals or disloyals, and rewarded or not.

Early forms of CRM system began with customer identification and contact information, and information on the recency, frequency, and monetary values of the customers’ purchase history.

MKT500_9_1_Ed-10: Click the tabs to learn more about gathering customer information.

MKT500_9_1_Ed-10​_Tab A: Surveys. Surveys are ideal instruments to obtain customers’ perceptions. Survey results are more actionable if they measure multiple facets of the customers’ thoughts about the firm.

MKT500_9_1_Ed-10_Tab B: Employees. In terms of customer dissatisfaction, research suggests that the primary means to regaining the customer is through an empowered frontline employee. That employee needs to be capable of immediately redressing the problem, empathizing with the customer, and offering a perk for the customer’s troubles.

MKT500_9_1_Ed-10​_Tab C: Price Discounts. Customer satisfaction is thought to be the first step in a longer-term relationship. Early efforts at customer relationship marketing (CRM) were frequently driven by price discounts, reasoning that a company could buy a little loyalty by locking in their customers.

MKT500_9_1_Ed-10​_Tab D: Loyalty Programs. A loyalty program invites customers to become members to enjoy certain benefits for frequent or heavy purchasing, whereas a CRM program is a tool in the company that tracks spending, regardless of whether customers are segmented into loyals or disloyals, and whether they are rewarded or not.

Early forms of CRM systems began with customer identification and contact information, as well as information on the recency, frequency, and monetary values of the customer’s purchase history.

Slide 5

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

MKT500_9_1_Ed-11: It is important for Golds Reling to keep an eye on the goal. We calculate CLV because it fits a strategic initiative to serve certain segments of customers better, as well as our corporate goals for growth and profitability for our new tablet launch.

MKT500_9_1_Samantha-11: Ed, you mentioned a survey to measure customer satisfaction. Do you mean we need to use market research to measure customer satisfaction? If so, what techniques do we use? I remember from my graduate classes at Strayer University that there are several methods which can be used in marketing research, but can you elaborate?

MKT500_9_1_Ed-12: Yes, marketing research is tremendously flexible. It can be used to address just about any business question, and there are many ways to do so. Some of the popular techniques are:

One - Cluster analysis for segmentation.

Two - Perceptual mapping for positioning.

Three - Focus groups for concept testing in new products or advertising.

Four - Conjoint analysis for testing attributes in pricing, new products, or branding.

Six - Scanner data for pricing and coupons.

Seven -Experiments and brand switching, and

Eight - Surveys for assessing customer satisfaction.

Many companies are interested in getting feedback from their customers. As a result, customer satisfaction surveys are extremely popular. Surveys are not complicated.

Let’s review this short video that discusses the process of how to conduct a market research survey.

Slide 6

How to Conduct a Market Research Survey

http://youtu.be/tjQFtSmVppY

Slide 7

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

MKT500_9_1_Samantha-12: Thanks for sharing this video with me. However, in addition to conducting surveys, I also like the idea of using scanner data, as we can work with our distributors to capture this data and feed it into our database.

MKT500_9_1_Ed-13: Yes, I agree. We can create detailed SKUs, that is, stock keeping unit tags, to be used for the scanner data. However, let’s look at surveys for now.

Writing effective survey questions is extremely important. The process goes like this: The survey questions are written, pre-tested, and then presented to a sample of the customers.

MKT500_9_1_Samantha-13: Do you have any tips for the types of questions that we should include in our surveys?

Slide 8

Tabbed Interaction

Click the tabs to learn more about customer satisfaction survey questions.

A.

Questions about customer satisfaction can be as straightforward as, “How would you rate the service you just received at our car dealership?” It is also common to ask customers how the purchase rates compared to their expectations, for example, “How did your visit at our hotel seem to you?”

Beyond customer satisfaction, many surveys ask about repurchase intentions and intentions to generate word of mouth, for example, “How likely is it you would fly with our airline again for your next travels?”

B.

It is important to include survey questions that will be actionable. If customer satisfaction is high, that is great, but if it is low, there need to be some diagnostic questions that point to the priorities a company should take to enhance customers’ perception of quality.

C.

Surveys are supposed to be short so the respondent does not have to endure much pain or boredom, and shorter surveys enhance response rates. Responses are kept confidential, for research purposes only, not for subsequent sales opportunities. There are strict ethics to which marketing researchers are supposed to attend. Respondents can be consumers or B2B customers. Surveys can be administered in person, over the phone, via fax, and increasingly on the web.

MKT500_9_1_Ed-14_Tab A: Questions about customer satisfaction can be as straightforward as, “How would you rate the service you just received at our car dealership?” It is also common to ask customers how the purchase rates compared to their expectations, for example, “How did your visit at our hotel seem to you?”

Beyond customer satisfaction, many surveys ask about repurchase intentions and intentions to generate word of mouth - for example, “How likely is it that you would fly with our airline again for your next travels?”

MKT500_9_1_Ed-14_Tab B: It is important to include survey questions that will be actionable. If customer satisfaction is high, that is great, but if it is low, there need to be some diagnostic questions that point to the actions a company should take to enhance customers’ perception of quality.

MKT500_9_1_Ed-14_Tab C: Surveys should be kept short so that the respondent does not have to endure much pain or boredom. Shorter surveys enhance response rates. Responses are kept confidential, for research purposes only, not for subsequent sales opportunities. There are strict ethics to which marketing researchers are supposed to attend. Respondents can be consumers or B2B customers. Surveys can be administered in person, over the phone, via fax, and increasingly on the web.

Slide 9

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

MKT500_9_1_Samantha-14: Thanks for that explanation, Ed. We’ve been at this for a while. Do you think we could take a break?

MKT500_9_1_Ed-15: That sounds like a good idea. Afterwards, we can pull all of our ideas together to share with Carl.

Slide 10

Scene 2

[Ed, Samantha, Carl – Conference Room]

Ed, Samantha, and Carl meet in the conference room to discuss the social media aspects of the product launch.

MKT500_9_2_Carl-1: Good afternoon, Ed and Samantha. I saw you both looking very busy in Ed’s office earlier. I’m looking forward to hearing the information that you two have put together for marketing research and customer satisfaction programs for our new tablets.

MKT900_2_Samantha-1: Yes, Ed and I have been very busy. We have a lot of great ideas and methods for measuring our customers’ satisfaction levels with our new tablets.

MKT500_9_2_Carl-2: I am very interesting in hearing the details.

MKT900_2_Samantha-2: There are many opportunities for Golds Reling.

We believe that our customers evaluate goods and services by making comparisons to their expectations. Based on our research, we feel that quality and customer satisfaction can be precisely measured in production of goods, but not as easily for services. We, therefore, want to increase customer satisfaction levels by addressing long-term criteria such as loyalty and customer relationship management.

We feel that Lifetime Customer Value, or LTV, is a means of translating marketing efforts into financial results; therefore, we suggest that LTV be used as a primary metric to measure Golds Reling’s marketing efforts for both the new tablet launch and the existing products in our portfolio.

MKT500_9_2_Carl-3: And why do you believe that investing time to understand expectations would be the right decision for Golds Reling and our new tablet?

MKT500_9_2_Ed-1: Many companies approach customer relationship management differently for new customers than they do for loyal, repeat customers. We feel that measuring expectations is the best technique to use. If we know our target customers’ expectations, we will be better able to meet or exceed them.

MKT900_2_Samantha-3: Customers have expectations of the businesses that they patronize. We want to measure the expectations that a first-time buyer of a Golds Reling product would likely have. In addition, we want to measure the expectations of loyal, repeat customers of Golds Reling.

MKT500_9_2_Carl-4: Ok, sounds like a good investment. Now can you explain how we are going to measure this investment?

MKT900_2_Samantha-4: Well, there are many marketing research techniques, and just about any can be used to address satisfaction among Golds Reling customers. However, both Ed and I feel that scanner data and surveys are the best methods to employ.

· Scanner data allow the investigation of brand switching, loyalty, price sensitivity, and the conducting of marketing experiments.

· Surveys are very flexible and are common instruments for assessing customer satisfaction.

MKT500_9_2_Carl-5: Excellent. I like what I’m hearing. Your methods seem very plausible and effective for measuring customer satisfaction for our new tablets. Thanks to both of you....excellent work!

Slide 11

Check Your Understanding

Answer the following question.

MarketMarketing research is tremendously _______.

a.

rigid

b.

flexible

c.

confusing

d.

difficult

Incorrect A – Rigid: This is not the terminology used to describe relationships in matketing research .

Correct B – Flexible: marketing research provides a lot of flexibilty and allows the researcher to craft various questions that get to the heart of the business problem.

Incorrect C – Confusing: a good marketing research plan should not be confusing but clearly specifies the problem recognition and the need to research.

Incorrect D – Difficult: Although some beleive this is a close description, it doesn’t explain the interaction experienced and simplistics methods that can be used in marketing reserach.

Slide 12

Scene 3

[Ed, Samantha – Hallway]

MKT500_9_3_Samantha-1: Today was a highly informative day. Using marketing research backed with effective techniques for measuring satisfaction can help us to be very successful in launching and maintaining customers for our new tablets.

MKT500_9_3_Ed-1: Absolutely. It will also help customers identify Golds Reling as a company they know, like and trust. Don’t forget to participate in this week’s threaded discussion about effectively measuring customer satisfaction for the new product launch. See you next week!