Summary Market-based Management Strategies for Growing Customer Value and Profitability

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ISBN-10 0130387754 ISBN-13 9780130387752
220 Flashcards & Notes
2 Students
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This is the summary of the book "Market-based Management Strategies for Growing Customer Value and Profitability". The author(s) of the book is/are Roger J Best. The ISBN of the book is 9780130387752 or 0130387754. This summary is written by students who study efficient with the Study Tool of Study Smart With Chris.

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Summary - Market-based Management Strategies for Growing Customer Value and Profitability

  • 1 Customer Focus, Customer Performance, and Profit Impact

  • The goal of a customer-focused business is to understand all levels of customer loyalty and develop the right customer marketing relationship program for type of customer in order to manage the overall profitability of the business.
  • What are the areas of commitment for market orientation?
    1. Customer orientation
    2. Competitor orientation
    3. Working as an integrated team 
  • Attract, satisfy, retain.
  • 1.1 Customer satisfaction and profitability

  • In order to survive, a company needs to change with the needs of its customer.
  • Customers will continue to change in:
    • Needs
    • Demographics
    • Lifestyle
    • Consumption behaviour
  • Competitors will continue to change as:
    • New technologies emerge
    • Barriers to foreign competition shifts
  • The environment in which businesses operate will continue to change as certain forces shifts. What are these shifts?
    • Economic
    • Political
    • Social
    • Technological
  • 1.2 Customer focus and profitability

  • What is a long-term benefit of a strong market-orientation?
    Long-term survival.
  • What are two short-term benefits of a strong market-orientation?

    Outperforming competition in:
    • Delivering high levels of customer satisfaction
    • Delivering high profits
  • What is the American Customer Satisfaction Index (ACSI)? What can managers gain from this?
    It's a customer satisfaction database. Managers can gain important insights from this database because it is a good measure to see what customer satisfaction does to your company.
  • 1.2.1 Building a strong customer focus

  • Building a strong customer focus is driven by three forces:
    1. Customer leadership
    2. Voice of customer
    3. Customer metrics
  • One force of customer focus is customer leadership. What are the three elements customer leadership consist of?
    1. Senior management leadership
    2. Employee customer training
    3. Customer involvement
  • What happens if senior management is not fully committed to adopting a strong customer focus?
    It will be unlikely that the rest of the organisation will adopt one.
  • What happens to customer focus if a business does nothing in the area of employee customer training?
    Employees will not make extra efforts to create positive customer experiences.
  • Customer involvement is one element of customer leadership. What does customer involvement entail?
    It means that customer feedback (good and bad) is shared across the organisations. Employees learn how their jobs affect the customers, how customers use the company's products, and what frustrations and problems customers encounter.
  • The voice of the customer is one of the three forces of customer focus. What are the three elements the voice of the customer consists of?
    1. Customer experience
    2. Customer solutions
    3. Customer complaints
  • What is the best way to understand the customer experience in terms of the voice of the customer?
    To see it.
  • Why are customer solutions in terms of the voice of the customer so important?
    Because you need to understand what the customers actually want instead of what you believe they want.
  • Why do businesses look at customer complaints as a part of the voice of the customer?
    Because it's an opportunity to understand the sources of customer dissatisfaction and to address them.
  • Customer metrics is one of the three forces of customer focus. What are the three parts customer metrics consist of?
    1. Customer satisfaction
    2. Customer retention
    3. Customer loyalty
  • Customer satisfaction is important because a completely satisfied customers is at least three times more likely to return than on who is just satisfied.
  • Customer retention is important because the cost of acquiring a customer is 5 to 10 times more than retaining one.
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Latest added flashcards

What are two short-term benefits of a strong market-orientation?

Outperforming competition in:
  • Delivering high levels of customer satisfaction
  • Delivering high profits
What is a long-term benefit of a strong market-orientation?
Long-term survival.
What are the two advantages of diversification?
  1. It reduces dependence on a single product-market.
  2. By diversifying, a business increases the likelihood that its overall performance will be consistent because adverse conditions in one product-market can be offset by favourable conditions in another.
What is the purpose of a portfolio analysis?
To take a strategic view of where a business is and where it wants to go with its portfolio of existing and future products.
Explain the offensive strategy: new market entry.
Invest to enter new attractive markets or develop new products-markets.
Explain the offensive strategy: improve position.
Invest to improve and/or strengthen competitive position.
Explain the offensive strategy: invest to grow.
Invest marketing resources to grow the market or market share.
What are the three strategic market plans for offensive strategies?
  1. Invest to grow
  2. Improve position
  3. New market entry
Explain the defensive strategy: harvest/divest.
Manage the product for maximum short-term cash flow or minimum losses.
Explain the defensive strategy: monetise.
Manage market position for maximum cash flow with limited marketing resources.