Chapter 18
14
Copyright 1999 Prentice Hall 18-1 Chapter 18 Competitive Strategies: Building Lasting Customer PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstron
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PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong. Chapter 18. Competitive Strategies: Building Lasting Customer Relationships. Total Customer Value. (Product, Service, Personnel, & Image Values). Total Customer Cost. (Monetary, Time, Energy, & Psychic Costs). - PowerPoint PPT Presentation
Transcript of Chapter 18
Copyright 1999 Prentice Hall
18-118-1
Chapter 18
Chapter 18
Competitive Strategies:
Building Lasting Customer
Relationships
PRINCIPLES OF MARKETING Eighth Edition
Philip Kotler and Gary Armstrong
Copyright 1999 Prentice Hall
18-218-2
Defining Customer Value Defining Customer Value
--
==
Total CustomerValue
Total CustomerValue
Total CustomerCost
Total CustomerCost
(Product, Service,Personnel, &
Image Values)
(Product, Service,Personnel, &
Image Values)
(Monetary, Time,Energy, &
Psychic Costs)
(Monetary, Time,Energy, &
Psychic Costs)
CustomerDelivered Value
CustomerDelivered Value
(Profit to theConsumer)
(Profit to theConsumer)
Copyright 1999 Prentice Hall
18-318-3 Customer Satisfaction Customer Satisfaction Customer Satisfaction Customer Satisfaction
Customer Satisfaction Results When a Company’s Performance Has Fulfilled a Buyer’s Expectations.
Buyer’s Expectations Are Based On:
Customer’s Past Buying Experiences Opinions of Friends & Associates Marketer/ Competitor Information & Promises
Pro
du
ct’s
Act
ual
Per
form
ance
Performance Exceeds Expectations- Customer is Delighted
Performance Below Expectations - Customer is Dissatisfied
Copyright 1999 Prentice Hall
18-418-4 Total Customer Satisfaction Total Customer Satisfaction
• Highly satisfied (delighted) customers produce Highly satisfied (delighted) customers produce benefits:benefits:– They are less price sensitive,
– They remain customers longer,
– They talk favorably about the company and products to others.
• Delighted customers have emotional and rational Delighted customers have emotional and rational preferences for products, and this creates high preferences for products, and this creates high customer loyalty. customer loyalty.
• Therefore, the purpose of Marketing is to generate Therefore, the purpose of Marketing is to generate customer value profitably.customer value profitably.
Copyright 1999 Prentice Hall
18-518-5 The Need for Customer Retention The Need for Customer Retention
NewCustomer
Costs
NewCustomer
Costs
LostCustomer
Costs
LostCustomer
Costs
CustomerLifetime
Value
CustomerLifetime
Value
The Key to Customer Retention is Superior Customer Value and Satisfaction. Companies Must Consider:
Copyright 1999 Prentice Hall
18-618-6 Building Customer Satisfaction and Loyalty by Relationship Marketing
Building Customer Satisfaction and Loyalty by Relationship Marketing
StructuralTies
StructuralTies
SocialBenefitsSocial
Benefits
Relationship Marketing Involves Creating, Maintaining, and Enhancing Strong, Long-Term Relationships with
Customers and Other Stakeholders.
Methods for Building Relationships Include Offering:
FinancialBenefits
FinancialBenefits
Copyright 1999 Prentice Hall
18-718-7
Value Chain Value Chain
Firm InfrastructureFirm Infrastructure
Human Resource ManagementHuman Resource Management
Technology DevelopmentTechnology Development
ProcurementProcurement
InboundLogistics
InboundLogistics OperationsOperations Outbound
Logistics
OutboundLogistics
Marketingand
Sales
Marketingand
SalesServiceService
Marg
in
Support Activities
Primary Activities
Copyright 1999 Prentice Hall
18-818-8 Customer Value-Delivery Network Customer Value-Delivery Network
CustomerCustomer
RetailerRetailer
ProducerProducer
VendorVendor
Raw MaterialSupplier
Raw MaterialSupplier
Del
iver
yOrd
erO
rder
Ord
erO
rder
Ord
erD
eliv
ery
Del
iver
yD
eliv
ery
Del
iver
y
Copyright 1999 Prentice Hall
18-918-9
Total Quality Marketing Total Quality Marketing
Pursuinga TotalQuality
MarketingStrategy
Pursuinga TotalQuality
MarketingStrategy
Necessary But MayNot Be Sufficient
Necessary But MayNot Be Sufficient
Quality is in the Eyes of the Customer
Quality is in the Eyes of the Customer
Does NotCost More
Does NotCost More
Every CompanyActivity
Every CompanyActivity
QuantumLeaps
QuantumLeaps
Total EmployeeCommitment
Total EmployeeCommitment
Cannot SavePoor Product
Cannot SavePoor Product
ContinuousImprovement
ContinuousImprovement
High QualityPartners
High QualityPartners
Copyright 1999 Prentice Hall
18-1018-10
Identifying CompetitorsIdentifying Competitors
Assessing CompetitorsAssessing Competitors
Determining ObjectivesDetermining Objectives
Selecting Competitors toAttack and to Avoid
Selecting Competitors toAttack and to Avoid
Competitor AnalysisCompetitor Analysis
Identifying StrategiesIdentifying Strategies
Assessing Strengths andWeaknesses
Assessing Strengths andWeaknesses
Estimating ReactionPatterns
Estimating ReactionPatterns
Copyright 1999 Prentice Hall
18-1118-11
Developing Competitive Marketing StrategiesDeveloping Competitive Marketing Strategies
Overall CostLeadership
Overall CostLeadership
DifferentiationDifferentiation
FocusFocus
Middle ofthe RoadMiddle ofthe Road
Basic Competitive StrategiesBasic Competitive Strategies
Copyright 1999 Prentice Hall
18-1218-12
Developing Additional Competitive Marketing StrategiesDeveloping Additional Competitive Marketing Strategies
ProductLeadership
ProductLeadership
OperationalExcellence
OperationalExcellence
CustomerIntimacy
CustomerIntimacy
Value DisciplinesValue Disciplines
Copyright 1999 Prentice Hall
18-1318-13
Market LeaderMarket LeaderFirm with the Largest
Market Share
Market LeaderMarket LeaderFirm with the Largest
Market Share
Expand Total MarketProtect Market ShareExpand Market Share
Expand Total MarketProtect Market ShareExpand Market Share
Competitive Positions Competitive Positions
Market ChallengerMarket ChallengerRunner-Up Firms thatFight Hard to Increase
Market Share
Market ChallengerMarket ChallengerRunner-Up Firms thatFight Hard to Increase
Market Share
Market FollowersMarket FollowersRunner-Up Firms that Wantto Hold Their Share Without
Rocking the Boat
Market FollowersMarket FollowersRunner-Up Firms that Wantto Hold Their Share Without
Rocking the Boat
Market NichersMarket NichersFirms that Serve SmallSegments Not Being
Pursued by Other Firms
Market NichersMarket NichersFirms that Serve SmallSegments Not Being
Pursued by Other Firms
Follow CloselyFollow at a Distance
Follow CloselyFollow at a Distance
By Customer, Market,Quality-Price, Service
Multiple Niching
By Customer, Market,Quality-Price, Service
Multiple Niching
Full Frontal AttackIndirect Attack
Competitive Positions Competitive Strategies
Copyright 1999 Prentice Hall
18-1418-14
Balancing Customer and Competitor OrientationsBalancing Customer and Competitor Orientations
ProductOrientation
ProductOrientation
CompetitorOrientation
CompetitorOrientation
CustomerOrientation
CustomerOrientation
MarketOrientation
MarketOrientation
Co
mp
etit
ion
-Cen
tere
dC
om
pet
itio
n-C
ente
red
NoNo YesYes
Customer-CenteredCustomer-Centered
NoNo
YesYes
