Please I really need help, I begging youRead the pages and make a brief summary of them with your own words, please. It is what you understand. Don't make copy-paste, please. Mention important parts only. Also, you will put your comments and ideas about the topic. Write your comments and opinions briefly on the subject in a separate paragraph at the bottom. Please don't write item by item. Write the summary in paragraph form. • Reaching out to customers. Customer-driven compa-nies reach out to their customers. In a total quality set-ting, it is never enough to sit back and wait for customersto give evaluative feedback. A competitive global market-place demands a more assertive approach. Reaching outto customers means doing the following:Making it easy for customers to do businessEncouraging employees to go beyond the normal call of dearly focused plan of improvement.duty to please customersAttempting to resolve all customer complaintsMaking it convenient and easy for customers to maketheir complaints knownCompetence, capability, and empowerment of people. Companies work hard to build customer loyalty. Think ofEmployees are treated as competent, capable profession-als and are empowered to use their judgment in doingwhat is necessary to satisfy customer needs. This meansthat all employees have a thorough understanding of theproducts they provide and the customer's needs relatingto those products. It also means that employees are given keep them for the long term to recoup their investments.the resources and support required to meet the custom-er's needs.with customers and their personnel concerning customerneeds, (2) use of customer-specific metrics, (3) systematicuse of customer feedback, and (4) customer-focused orga-nizational structure."By applying the characteristics and management factorsset forth in this section, quality professionals can recognizecustomer-driven organizations. They can also quickly sur-mise where problems and shortcomings exist and develop aService quality (e.g., sales, after-purchase service, billing) CUSTOMER LOYALTY VERSUSButterfliesESTABLISHING ACUSTOMER FOCUSRelationship quality (eg., communication, availability, CUSTOMER PROFITABILITYButterflies are highly profitable customers, but they don'tCompanies that have successfully established a customerfocus share a number of common characteristics that can bedivided into the following clusters:6responsiveness)- Image strength (e.g., when other performance indicatorsare equal, the organization's image can be an important and prosper in an intensely competitive global environment. transactional satisfaction rather than long-term loyalty;: (2)The common wisdom among quality professionals is that cus- stay around long. Consequently, the following strategies aretomer loyalty is a must for organizations that hope to survive recommended for dealing with butterflies: (1) aim to achieveconsideration)• Price perceptions (eg., initial purchase price, cost of the concept has become so ingrained in contemporary business waste time chasing a rainbow; and (3) make wise decisionsmaintenance and repairs, cost of upgrades)Customer loyalty is, as a general rule, a desirable goal. However, work the accounts only as long as they are active-don't. Vision, commitment, and climate. A company withthese characteristics is totally committed to satisfyingcustomer needs. This commitment shows up in every-thing the company does. Management demonstrates bydeeds and words that the customer is important, thatthe organization is committed to customer satisfaction,and that customer needs take precedence over internalneeds. One way such organizations show their com-mitment to customers and establish a climate in whichthinking that some organizations are leaving out another criti- about the optimum time to break off the relationship.cal factor in the success formula. That factor is profitability."The goal of organizations should be more than just True Friendsearning the loyalty of customers; it should be earning theloyalty of customers who contribute to the organization's True friends are highly profitable, and they are loyal.profitability. Loyal but unprofitable customers are still un- Consequently, the following strategies are recommended forprofitable. Organizations should never assume an automatic dealing with true friends: (1) communicate consistently, butpositive correlation between loyalty and profitability. Nor don't overdo it; (2) build both attitudinal loyalty and bchav-should they assume that because a customer is profitable ini- ioral loyalty; and (3) nurture, defend, and partner with themtially he or she will remain profitable. "Just because a group to create customer delight.of customers was profitable in the past, doesn't mean it willcontinue to be so in the future. Many nonloyal customers Strangerscan be very profitable initially, causing companies to chase Strangers provide only low profitability and are short-termafter them in vain for future profits."12Werner Reinartz and V. Kumar make the critical point customers. Consequently, the following strategies are recom-that "When customers are sorted according to their prof- mended for dealing with strangers: (1) make the best profititability and longevity, it becomes clear that the relation- possible on every individual transaction and (2) make no in-ship between loyalty and profits is by no means assured." vestment in the relationship.Reinartz and Kumar document this point using a matrix inwhich study subjects of several different types of businesses Barnacleswere sorted into one of four quadrants:Global PerceptionsVALUE PERCEPTION ANDCUSTOMER LOYALTYBased on its evaluation of an organization, a customer willform global perceptions about that organization. There aremany different types of perceptions that might be formed bya customer. For example, customers might form good or badfeelings about overall satisfaction, their willingness to recom-mend the organization to other potential customers, their will-ingness to do business with the organization again, their com-mitment to an ongoing relationship with the organization, theextent to which the organization met their needs, or the valuethey received for their money. If the perceptions formed bycustomers in these and other pertinent areas are positive, theycan lead to loyalty behaviors on the part of those customers.Coke and Pepsi, for example. The goal is to keep the cus-tomer on board for the long term. The theory is that a loyalcustomer is a customer forever. It is easy to see what drivesthe desire to create customer loyalty. Companies spendso much in marketing to attract customers that they mustcustomer satisfaction prevails is by making the goal ofbeing customer focused a major factor in all promotionsand pay increases.The best way to generate customer loyalty is to con-sistently provide customers with superior value. Superiorvalue is a combination of superior quality, superior cost,and superior service. Think of a favorite restaurant.People are loyal customers to a given restaurant becauseit provides high-quality food and atmosphere at competi-- Alignment with customers. Customer-driven compa-nies align themselves with their customers. Customersare included when anyone in the organization says, "we."Alignment with customers manifests itself in severalways, including the following: Customers play a con-sultative role in selling, customers are never promisedmore than can be delivered, employees understand whatproduct attributes the customers value the most, andcustomer feedback and input are incorporated into theproduct development process.- Willingness to find and eliminate customers'lems. Customer-driven companies work hard to con- guide in establishing a customer focus. The first step is a self-tinually identify and eliminate problems for customers. analysis in which it is determined which of these character-This willingness manifests itself in the following ways: istics are present in the organization and which are missing.Customer complaints are monitored and analyzed; cus- zation-wide implementation effort.tomer feedback is sought continually; and internal pro-cesses, procedures, and systems that create no value forcustomers are identified and eliminated.- Continual improvement of products and processes.Customer-driven companies do what is necessary to con-tinually improve their products and the processes thatproduce them. This approach to doing business manifestsitself in the following ways: Internal functional groupscooperate to reach shared goals, best practices in the busi-ness are studied (and implemented wherever they willresult in improvements), research and development cycletime is continually reduced, problems are solved imme-diately, and investments are made in the development ofinnovative ideas.Loyalty BehaviorsCustomer loyalty is a behavioral concept, but it can be mea-sured. For example, an organization can measure the defec-tion rate of its customers-especially those that do businesson a regular basis. Another factor that can be measured isthe business volume of individual customers. Is the volumeof business for the customer going up or dow? A cus-tomer who stays with an organization but significantly de-creases his or her volume of business is not a loyal customer.Consequently, it is important to measure both the defectionrate and the business-volume-by-customer rate. When cus-tomers exhibit loyalty behaviors, the organization benefits inthe critical area of financial outcomes.tive costs and with excellent service. All three of these fac-tors must be given the highest priority by organizationsand continually improved in order to maintain the loyaltyof customers.Barnacles provide only low profitability but are long-termcustomers. Consequently, the following strategies are recom-mended for dealing with barnacles: (1) begin by measuringtheir buying potential and how much of it the organizationgets; (2) if they have buying potential, try to increase theshare of their business the organization gets by up-selling• high profitability/short term. high profitability/long term. low profitability/short term. low profitability/long termUsing the customers of a corporate service provider as and cross-selling; and (3) if they don't have buying potential,a typical example, only 30% of the long-term (loyal) cus- impose strict cost controls on their account.tomers studied were found to be highly profitable for theservice provider. More than 20% of the long-term custom-ers were found to provide only low profitability. On theother hand, 20% of the corporate service provider's short-CUSTOMER LOYALTY MODELOrganizations attempt to consistently exceed customerexpectations for the purpose of creating and maintain-ing customer loyalty." Customers constantly evaluate-both formally and informally-the organizations they dobusiness with. From these evaluations, they form per-ceptions of the performance of the organizations. Theseperceptions, if they are positive, can lead to customer loy-alty. Customer loyalty, in turn, can lead to a higher levelof competitiveness and better financial performance: inother words, success.Steve Hoisington and Earl Nauman have transformedthe process of creating customer loyalty into a four-phasemodel that has the following components: (1) business per-formance, (2) global perceptions, (3) loyalty behaviors, and(4) financial outcomes." These four components are ex-These seven clusters of characteristics can be used as aProb.Characteristics that are missing form the basis for an organi-Financial Outcomesatinually; and internal pro-Financial outcomes are affected by several key factors, in- term (nonloyal) customers were found to be highly profit-cluding the following1. Market share-High customer loyalty leads to a largermarket share, which, in turn, leads to better financial study is that "When profitability and loyalty are consideredable, and only 29% of its short-term customers were foundto provide low profitability.The key point that Reinartz and Kumar make in thisRECOGNIZING THE CUSTOMER-- Use of customer information. Customer-driven com- DRIVEN ORGANIZATIONpanies not only collect customer feedback but also use Is a given organization customer driven? In today's com-it and communicate it to those who need it to make im- petitive business environment, the answer to this questionprovements. The use of customer information manifests must be yes. Since this is the case, it is important for qual-itself in the following ways: All employees know how the organization and to be able to articulate its distinguishing plained in the following paragraphs.customer defines quality, employees at different levels are characteristics.given opportunities to meet with customers, employeesknow who the "real" customer is, customers are given in- by the following characteristics: (1) promptly followsformation that helps them develop realistic expectations, through on all promises, (2) can be trusted, (3) has cred-and employees and managers understand what customers ibility, (4) attends to even the smallest details, and (5)want and expect.outcomesat the same time, it becomes clear that different customersneed to be treated in different ways."" They go on to proposethan new customers, which means that customer loyalty four strategies for dealing with customers based on an accu-rate segmentation of an organization's customers on the basisof their loyalty and profitability. They label customers ac-cording to where they fall in the customer loyalty/profitabil-2. Reduced costs-Repeat customers cost less to deal withdecreases the cost of doing business3. Employee attitudes-Positive employee attitudes pro-mote positive customer relations4. Profit-Increased market share can result in increased ity matrix described earlier. High-profitability/short-termcustomers are called butterflies. High-profitability/long-term customers are called true friends. Low-profitability/short-term customers are called strangers. Low-profitability/long-term customers are called barnades. The strategies rec-A customer-driven organization can be recognized Business PerformanceWhen evaluating the performance of an organization theydo business with, customers consider a variety of factors, allof which fall into one of these categories:profits, provided the cost of doing business is held levelor even decreased by customer loyalty5. Shareholder value-Customer loyalty can result inhigher profits, which, in turn, are a key driver of share-holder valueresponsiveness.' In addition to these characteristics,customer-driven organizations exemplify the followingmanagement characteristics: (1) effective communicationommended for each of these customer types follow.• Product quality (e.g., attributes, features, usability, com-patibility, reliability)

Every customer try to achieve some goal everyday. While trying to achieve that goal he faces some…

Answered: Please I really need help, I begging…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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