Marketing Essay

8516 Words Apr 10th, 2013 35 Pages
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PART II Connecting with Customers

C H A P T E R

4

Creating Customer Value, Satisfaction, and Loyalty
In this chapter, we will address the following questions:
1. How can companies deliver customer value, satisfaction, and loyalty? 2. What is the lifetime value of a customer, and why is it important to marketers? 3. How can companies cultivate strong customer relationships? 4. What is the role of database marketing in customer relationship management?

MARKETING
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First, it can increase total customer benefit by improving economic, functional, and psychological benefits of its product, services, personnel, and/or image. Second, it can reduce the buyer’s nonmonetary costs by reducing the time, energy, and psychic costs. Third, it can reduce its product’s monetary cost.3 Some marketers might argue that this process is too rational. Suppose the customer chooses the Komatsu tractor. How can we explain this choice? Three possibilities are:
1. The buyer might be under orders to buy at the lowest price. To win this sale, Caterpillar must convince the buyer’s manager that buying on price alone will result in lower long-term profits and customer value. 2. The buyer will retire before the company realizes that the Komatsu tractor is more expensive to operate. To win this sale, Caterpillar must convince other people in the buyer’s company that it delivers greater long-term value. 3. The buyer enjoys a long-term friendship with the Komatsu salesperson. Here, Caterpillar must show the buyer that the Komatsu tractor will draw complaints from the tractor operators when they discover its high fuel cost and need for frequent repairs.
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Customer

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