#13 Customer-Orientation

Question 1

Why is it important to be customer-oriented?

Answer 1

1. Changing demographics, more sophisticated competitors, overcapacity in many industries
2. Costs 5x to gain a new customer than to retain one
3. Lifetime value

Question 2

How is customer satisfaction built and why is it important?

Answer 2

Customers’ expectations come from

• Past experiences
• Friends’ Opinions
• Market/Competitor information and
• Promises of the firm

Goal: total customer satisfaction
- delighted customers are less price-sensitive, remain customers longer and talk favourably about the company and products

Question 3

How to win preference formation?

Answer 3

1. Initital Exposure
   - First to Market
   - Market to Youth
2. Media and Promotion Campaigns

Question 4

Price and Quality Relationship

Answer 4

Price Quality Matrix

Question 5

Price-Quality Strategies

Answer 5

1. Margin
   Quality – High cost + high price – profit
2. Quality
   Quality – High share, High price, low cost, high margin – profits

Question 6

Customer relationship strategy

Answer 6

1. treat them well
2. gain trust
3. focus on the right customers
4. provide extras
5. manage responses
6. switching costs