Chapter 5Creating Customer Value, Satisfaction, and Loyalty
Concepts and Applications
Jover S. ChavezMarketing Management
Ateneo School of Medicine and Public Health12 May 2010
Concept 1Creating loyal customers is at
the heart of every business.
Concept 1
•Kotler▫Cisco Systems
“Make your customer thecenter of your culture.”
Creating loyal customers is at the heart of every business.
•LOCAL▫The Medical City
Patient Partnership Patient on Center Stage
Concept 1
•MEDICAL APPLICATIONS▫loyal patients▫loyal patients▫loyal patients
Creating loyal customers is at the heart of every business.
Concept 2
•CUSTOMER PERCEIVED VALUE (CPV)▫(total customer benefit)
– (total customer cost)
•Customers will seek out superior alternatives.▫more educated and
informed
Customers are value maximizers.
Concept 2 Customers are value maximizers.•Kotler
▫Dell Inc. vs. Hewlett-Packard Co.
•LOCAL▫Globe vs. SMART
•MEDICAL APPLICATION▫physician shopping
Concept 3
•Kotler▫Volvo’s safety…and more
The value proposition consists of the whole cluster of benefits the
company promises to deliver.
•MEDICAL APPLICATIONS▫hospitals▫wellness centers
•LOCAL▫Starbucks▫Fitness First
Concept 4The value delivery system is the
manner in which all these promises are kept.
•Kotler▫Superquinn
•LOCAL▫Rustan’s
•MEDICAL APPLICATIONS▫hospitals▫wellness centers
Concept 5
•pleasure•disappointment
Satisfaction is a function of product performance and buyer
expectations.
•TOTAL CUSTOMER SATISFACTION (TCS)▫high satisfaction high customer loyalty▫both a goal and a marketing tool
Concept 5Satisfaction is a function of product performance and buyer
expectations.
•Kotler▫Joie de Vivre Hospitality Inc.
•LOCAL▫Windows, Mac
•MEDICAL APPLICATIONS▫surgeries▫medical tourism
Concept 6Quality is the totality of features
and characteristics that bear on its ability to satisfy needs.
•customer-centered definition▫meeting or exceeding customer
expectations•conformance quality•performance quality
Concept 6Quality is the totality of features
and characteristics that bear on its ability to satisfy needs.
•Kotler▫General Electric
•LOCAL▫adidas
•MEDICAL APPLICATIONS▫therapeutics▫physician competence
Concept 7
•Marketing is the art of attracting and keeping profitable customers.
The 150-20 Rule: The most profitable 20% of customers may contribute 150% of profitability.
Concept 7
The 150-20 Rule: The most profitable 20% of customers may contribute 150% of profitability.
•Kotler▫“Profit Tiers”
•LOCAL▫BPI
•MEDICAL APPLICATIONS▫insurance▫patient classification
Concept 8
•precision marketing▫vs. mass marketing
Maximizing customer value means cultivating long-term customer
relationships.
•CUSTOMER RELATIONSHIP MANAGEMENT (CRM)▫managing detailed information and “touch
points” to maximize loyalty
Concept 8 Maximizing customer value means cultivating long-term customer
relationships.•Kotler
▫Four Seasons
•LOCAL▫McDonald’s PlayPlace
•MEDICAL APPLICATIONS▫personalizing treatment
Concept 9
•build relationships, not just sales
•acquiring new customers costs more▫5x more than satisfying and
retaining•companies lose 10% of
customers annually•5% defection 25-85%
profits
Attract and retain customers,but retain more.
Concept 9 Attract and retain customers,
but retain more.•Kotler
▫cellular carriers
•LOCAL▫cellular carriers
•MEDICAL APPLICATIONS▫patient retention, word of mouth
Concept 10
•Marketers must know their customers.
CRM requires building a customer database and doing datamining
to detect trends, segments, and needs.
Concept 10 CRM requires building a customer database and doing datamining
to detect trends, segments, and needs.
•Kotler▫Novartis
•LOCAL▫Online Banking
•MEDICAL APPLICATIONS▫patient records (physician)▫hospital patient database
Concept 1Creating loyal customers is at
the heart of every business.
Chapter 5Creating Customer Value, Satisfaction, and Loyalty
Concepts and Applications
Jover S. ChavezMarketing Management
Ateneo School of Medicine and Public Health12 May 2010