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Objectives
Define value & satisfaction - understand Define value & satisfaction - understand how to deliver themhow to deliver them
The nature of high-performance The nature of high-performance businessesbusinesses
How to attract & retain customersHow to attract & retain customers Improving customer profitabilityImproving customer profitability Total quality managementTotal quality management
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Determinants of Customer Delivered Value
Image value
Personnel value
Services value
Product value
Totalcustomer
value
Monetary cost
Time cost
Energy cost
Psychic cost
Totalcustomer
cost
Customerdelivered
value
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Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.
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Resources Organizationandaligning...
High Performance Business
ProcessesBy improving critical business...
Stake-holders
Set strategies to satisfy key...
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Mar
gin
Margin
The Generic Value Chain
Primary Activities
Supp
ort
Act
iviti
es
Procurement
Serv-ice
Technology DevelopmentHuman resource management
Firm infrastructure
InboundLogistics
Opera-tions
Out-bound
Logistics
Market-ingand
sales
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Levi Strauss’ Value-Delivery Network
Competition is between Competition is between networksnetworks, not companies., not companies.The winner is the company with the better network.The winner is the company with the better network.
Delivery
Sears(Retail)
Levi’s(Apparel)
Order
Delivery
Order
Customer
Delivery
Du Pont(Fibers)
Order
Delivery
Order
Milliken(Fabric)
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Satisfied Customers:
Are loyal longerAre loyal longer Buy more (new products & upgrades)Buy more (new products & upgrades) Spread favorable word-of-mouthSpread favorable word-of-mouth Are more brand loyal (less price Are more brand loyal (less price
sensitive)sensitive) Offer feedbackOffer feedback Reduce transaction costsReduce transaction costs
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Levels of Relationship Marketing
Manycustomers/distributors
Mediumnumber ofcustomers/distributors
Fewcustomers/distributors
AccountableProactivePartnership
Proactive Accountable Reactive
Accountable Reactive Basic orreactive
Highmargin
Mediummargin
Lowmargin
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Inactive orex-customers
Customer Development
PartnersAdvocatesClientsRepeatcustomers
First-timecustomers
Suspects
Prospects
Disqualifiedprospects
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Customer/Product Profitability Analysis
P1Highly
profitableproduct
P2Profitableproduct
P3Losingproduct
P4Mixed-bag
product
Products
+++Highprofit
customer
+-
Mixed-bagMixed-bagcustomercustomer
+--
Losingcustomer
C1 C2 C3
Customers
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The Profit TriangleVa
lue c
reat
ion
Competitive advantage
Internal operations
ProfitProfit
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Quality
QualityQuality is the is the totality of features totality of features and characteristics and characteristics of a product or of a product or service that bear on service that bear on its ability to satisfy its ability to satisfy stated or implied stated or implied needs.needs.
#1
©2000 Prentice Hall
Review
Define value & satisfaction - understand Define value & satisfaction - understand how to deliver themhow to deliver them
The nature of high-performance The nature of high-performance businessesbusinesses
How to attract & retain customersHow to attract & retain customers Improving customer profitabilityImproving customer profitability Total quality managementTotal quality management