Executive Summary CH4

Customers will buy from the firm that they perceive to offer the highest customer-delivered value, defined as the difference between total customer benefits and total customer cost.

A buy-er’s satisfaction is a function of the product’s perceived performance and the buyer’s expectations. Recognizing that high satisfaction leads to high customer loyalty, companies must ensure that they meet and exceed customer expectations. Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.  Marketers play a key role in achieving high levels of total quality so that firms remain solvent and profitable.

Marketing managers must calculate the customer lifetime values of their customer base to understand the profit implications. They must also determine ways to increase the value of the customer base. A strong brand community can lead to a more loyal, committed customer base and provide inspiration and feedback for product improvements or innovations.

Companies are becoming skilled in customer relationship management (CRM). The purpose is to attract the right customers, meet the individual needs of valued customers, improve loyalty and retention of valued customers, and implement win-back strategies to reattract valued ex-customers.