week 4 Flashcards
4 eras of marketing
- production-oriented era
- sales-oriented era
- market-oriented era
- value-based era
what is a production-oriented era
Firms believed a good product will sell itself
what is a sales-oriented era
firms focus on sales
what is a market-oriented era
Firms focus on what customer wanted
what is a value-based era
maintains market orientation with additional focus on giving greater value than the competition
what is value for most customer
value is function of the benefit relative to the price paid
value equals to
benefit - price
benefit includes
- functional (the product does the job)
- psychological (nike shoes provide social status)
- economic (Walmart offering branded products at a low price)
price includes
- monetary ($，¥ )
- perceived risk
- inconvenience
what’s in the perceived risk
- performance risk
- financial risk
- social risk
- physiological risk
- psychological risk
the Maslow’s Hierarchy of needs (from down to top)
- physiological needs (hunger, thirst)
- safety needs (security, protection)
- social needs (sense of belonging, love)
- esteem needs (self-esteem, recognition, status)
- self-actualization needs (self-development and realization)
how to measure customer’s value
- internal engineering assessment
- indirect service question
- field value-in-used assessment
how to do internal engineering assessment
-evaluation based on lab tests
- alpha test/ computer simulation
what is indirect service question
- firms asking customers how they value satisfying a need for solving a problem
what is field value-in-use assestment
- customer and supplier joint value assessment
- investigate how much customer will pay for a new product given extra benefits
what is focus group
5-10 customers have a discussion with a moderator about their perceptions of a product and service
what is direct survey question
customer agree to complete a survey that describes one or more potential product offering
what is a impoatance rating
respondents rate their importance of specific sttributes towards a product offering
what is a conjoint analysis
field research survey to get respondents to give ratings for a set of offerings
what is a benchmarking
respondents receive descriptions of a product and then represent the best available product which serves a benchmark
what is a choice models
using past behavior to estimate the value of the product features that might explain the actual behaviour
what is data mining
- organization keep entensive records of customer purcahses
- analyze this information to product segments according to customer profitability etc.
definition of CLV (customer lifetime value)
the lifetime value of. customer is the total profit a firm can expect to earn from that customer during the time the company maintain a relationship with the customer
margin =
(revenue- cost)discountactive
what is r
discount rate
d=
d=(1/(1+r))
why CLV is important to company
- increase customer retention
- improve customer selectivity
- meet competitive imperatives
- boost cost efficiency
customer relationship value, and also explain what does each do
- reference accounts– give us prestige, and high credibility
- referral accounts– give us high-quality leads (suggest to others)
- learning accounts– help us refine our offerings
- innovation accounts– help us develop new offerings
Approach to increase CLV
-Reduce rate of defection (improving customer satisfaction, providing excellent service)
- Increase longevity ( loyalty programs, personalized engagement)
- Enhance share of wallet (cross-selling, upselling, and creating bundled offers)
- Attempt to alter behavior of low-profit customers
- Focus more effort on high-profit customers
