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Chapter 5

Creating Customer Value,


Satisfaction and Loyalty
Concepts and Applications

Jover S. Chavez
Marketing Management
Ateneo School of Medicine and Public Health
12 May 2010

Concept 1

Creating loyal customers is at the


heart of every business.

Concept 1

Creating loyal customers is at the


heart of every business.

Kotler

Cisco Systems
Make your customer the
center of your culture.

LOCAL
The Medical City
Patient Partnership
Patient on Center Stage

Concept 1

Creating loyal customers is at the


heart of every business.

MEDICAL APPLICATIONS
loyal patients
loyal patients
loyal patients

Concept 2

Customers are value maximizers.

CUSTOMER
PERCEIVED VALUE
(CPV)
(total customer benefit)
(total customer cost)

Customers will seek out


superior alternatives.
more educated and
informed

Concept 2

Customers are value maximizers.

Kotler
Dell Inc. vs. Hewlett-Packard Co.

LOCAL
Globe vs. SMART

MEDICAL APPLICATION
physician shopping

Concept 3

The value proposition consists of the


whole cluster of benefits the company
promises to deliver.
Kotler
Volvos safetyand more

LOCAL
Starbucks
Fitness First

MEDICAL APPLICATIONS
hospitals
wellness centers

Concept 4

The value delivery system is the


manner in which all these promises
are kept.

Kotler
Superquinn

LOCAL
Rustans

MEDICAL APPLICATIONS
hospitals
wellness centers

Concept 5

Satisfaction is a function of product


performance and buyer expectations.

pleasure
disappointment

TOTAL CUSTOMER SATISFACTION


(TCS)
high satisfaction high customer loyalty
both a goal and a marketing tool

Concept 5

Satisfaction is a function of product


performance and buyer expectations.

Kotler
Joie de Vivre Hospitality Inc.

LOCAL
Windows, Mac

MEDICAL APPLICATIONS
surgeries
medical tourism

Concept 6

Quality is the totality of features and


characteristics that bear on its ability
to satisfy needs.
customer-centered definition
meeting or exceeding customer expectations

conformance quality
performance quality

Concept 6

Quality is the totality of features and


characteristics that bear on its ability
to satisfy needs.
Kotler
General Electric

LOCAL
adidas

MEDICAL APPLICATIONS
therapeutics
physician competence

Concept 7

The 150-20 Rule: The most profitable


20% of customers may contribute 150%
of profitability.
Marketing is the art of attracting and
keeping profitable customers.

Concept 7

The 150-20 Rule: The most profitable


20% of customers may contribute 150%
of profitability.
Kotler
Profit Tiers

LOCAL
BPI

MEDICAL APPLICATIONS
insurance
patient classification

Concept 8

Maximizing customer value means


cultivating long-term customer
relationships.

precision marketing
vs. mass marketing

CUSTOMER RELATIONSHIP
MANAGEMENT (CRM)
managing detailed information and touch points
to maximize loyalty

Concept 8

Maximizing customer value means


cultivating long-term customer
relationships.

Kotler
Four Seasons

LOCAL
McDonalds PlayPlace

MEDICAL APPLICATIONS
personalizing treatment

Concept 9

Attract and retain customers,


but retain more.

build relationships, not just sales


acquiring new customers costs
more
5x more than satisfying and
retaining

companies lose 10% of


customers annually
5% defection 25-85%
profits

Concept 9
Kotler

Attract and retain customers,


but retain more.

cellular carriers

LOCAL
cellular carriers

MEDICAL APPLICATIONS
patient retention, word of mouth

Concept 10

CRM requires building a customer


database and doing datamining to
detect trends, segments, and needs.

Marketers must know their customers.

Concept 10

CRM requires building a customer


database and doing datamining to
detect trends, segments, and needs.

Kotler
Novartis

LOCAL
Online Banking

MEDICAL APPLICATIONS
patient records (physician)
hospital patient database

Concept 1

Creating loyal customers is at the


heart of every business.

Chapter 5
Creating Customer Value,
Satisfaction, and Loyalty
Concepts and Applications

Jover S. Chavez
Marketing Management
Ateneo School of Medicine and Public Health
12 May 2010