1. Delivering Value and Building Customer Satisfaction Through Quality Quality is the totality of product/service characteristics that bear on its ability to satisfy stated or implied needs.

2. Satisfaction Satisfaction: 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. –Setting expectations is key to insure buyer satisfaction –Know your capabilities to set expectations accurately –In some cases, exceeding expectations results in “delighted” customers -- but not in every case –Sometimes satisfied customers defect (leave)

3. Benefits of Market Orientation Higher customer satisfaction –In general, satisfied customers are more loyal & buy more Spread favorable word-of-mouth Are more brand loyal (less price sensitive) Give feedback Reduce costs Higher profits (short-term and long-term) Greater value for customers –You know them and their needs

4. Management Characteristics of a Market Oriented Firm Customer focus –Obsessed with understanding needs and delivering satisfaction Competitor orientation –Continuous recognition of competitors’ sources of advantages, competitive position and strategies Team approach – Cross-functional teams dedicated to developing and delivering customer solutions -- high morale & commitment to excellence

5. Customer Satisfaction Customer satisfaction can lead to retention Customer retention leads to increased profitability –Much cheaper to keep customers than to find new ones –Cheaper to serve customers that you know –Current customers know what to expect -- more likely to be satisfied Typically only “delighted” customers are safe from defection! Satisfaction metrics are often interpreted incorrectly!!

6. The Meaning of Customer Satisfaction Typically a skewed distribution of satisfaction Most dissatisfied customers do not complain -- they just LEAVE! –Encourage complaints –Have clear policies on dealing with complaints Provide quick remedies when possible –Complaint recovery is a source of customer satisfaction –Can actually be an opportunity

7. Life-Time Value of the Customer Total Customer Value is based on: –Image Value, personnel, service and product value Total Customer Cost is based on: –Monetary cost, time cost, Energy and psychic cost A key metric is determining the value of satisfied customers –Cadillac customer = $350,000 over the lifetime of the customer!! –Avoid customers with a record or profile of a “switcher” –Avoid hard to serve customers when possible

8. Marketing Research Gathering information and measuring market demand

9. Steps in the Research Process Define the problem & research objectives Develop the research plan Collect information Analyse the information Use findings to make a decision

10. Defining the Problem and Setting Research Objectives Types of research –Descriptive, exploratory, causal What do we want to know? –Clearly specify needed results –Are we examining a symptom or the problem? –Can we study this issue or problem?

11. Developing the Research Plan Data sources Research approaches Research instruments –survey, interview, computer scored, etc. Sampling plan Contact methods

12. Decision Making with Results First, don’t shoot the messenger! What do the results tell us? –Are these issues actionable –Was this the correct research approach (helps guide future research) –Can we trust these results –Is there some form of unacceptable bias in the study design (post-hoc analysis)

13. Methods of Conducting Marketing Research Inexpensively (cheaply) Talk to your customers –Conduct research by walking around Customer comment cards –Act on any consistent findings Focus groups of customers –Talk about how they want to do business Business reviews with major customers