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Unit3.CustomerValue

andSatisfaction2Morethan40yearsago,thelatemanagementguruPeterDrunkerinsightfullyobservedthatacompany’sfirsttaskis“tocreatecustomers.”However,creatingcustomerscanbeadifficulttask.Today’scustomersfaceavastarrayofproductandbrandchoices,price,andsuppliers.Thecompanymustanswerakeyquestion:Howdocustomersmaketheirchoices?Theansweristhatcustomerschoosethemarketingofferthatgivesthemthemostvalue.Customersarevalue-maximizers,withintheboundsofsearchcostsandlimitedknowledge,mobility,andincome.

1.DefiningCustomer

ValueandSatisfaction(SeeP37)

Customersformexpectationsofvalueandactuponthem.Thentheycomparetheactualvaluetheyreceiveinconsumingtheproducttothevalueexpected,andthisaffectstheirsatisfactionandrepurchasesbehavior.Wewillnowexaminetheconceptsofcustomervalueandcustomersatisfactionmorecarefully.CustomerValueConsumersbuyfromthefirmthattheybelieveoffersthehighestcustomerdeliveredvalue—thedifferencebetweentotalcustomervalueandtotalcustomercost(seeFigurebelow).4CustomerDeliveredValue

(SeetextP37-38)5HowDoConsumersChoose

AmongProductsandServices?

TotalQualityManagementInvolvesImprovingtheQualityofProducts,Services,andMarketingProcessesProduct’sPerceivedPerformanceinDeliveringValueRelativetoBuyer’sExpectationsisCustomerSatisfactionValueGainedFromOwningaProductandCostsofObtainingtheProductisCustomerValueForexample,supposethatalargeconstructionfirmwantstobuyabulldozertouseinresidentialconstructionwork.Itwantsareliable,durablebulldozerthatperformswell.ItcanbuythebulldozerfromeitherCaterpillarorKomatsu.Thesalespeopleforthetwocompaniescarefullydescribetheirrespectiveofferstothebuyer.VSTheconstructionfirmnowevaluatesthetwocompetingbulldozerofferstoassesswhichoneoffersthegreatestvalue.Itaddsallthevaluesfromfoursources—product,services,personnel,andimage.First,itjudgesthatCaterpillar’sbulldozerprovideshigherreliability,durability,andperformance.ItalsodecidesthatCaterpillarhasbetteraccompanyingservices—delivery,training,andmaintenance.ThecustomerviewsCaterpillarpersonnelasmoreknowledgeableandresponsive.Finally,itplaceshighervalueonCaterpillar’sreputation.Thus,thecustomerdecidesthatCaterpillaroffersmoretotalcustomervaluethandoesKomatsu.DoestheconstructionfirmbuytheCaterpillarbulldozer?Notnecessarily.ThefirmalsowillexaminethetotalcustomercostofbuyingCaterpillar’sbulldozerversusKomatsu’s.First,thebuyerwillcomparethepricesitmustpayforeachofthecompetitors’products.IfCaterpillar’sbulldozercostsalotmorethanKomatsu’sdoes,thehigherpricemightoffsetthehighertotalcustomervalue.Moreover,totalcustomercostconsistsofmorethanjustmonetarycosts.Totalcustomercostalsoincludesthebuyer’santicipatedtime,energy,andpsychiccosts.Theconstructionfirmwillevaluatethesecostsalongwithmonetarycoststoformacompleteestimateofitscosts.ThebuyingfirmnowcomparestotalcustomervaluetototalcustomercostanddeterminesthetotaldeliveredvalueassociatedwithCaterpillar’sbulldozer.Inthesameway,itassessesthetotaldeliveredvaluefortheKomatsubulldozer.Thefirmthenwillbuyfromthecompetitorthatoffersthehighestdeliveredvalue.HowcanCaterpillarusethisconceptofbuyerdecisionmakingtohelpitsucceedinsellingitsbulldozertothisbuyer?Caterpillarcanimproveitsofferinthreeways.First,Caterpillarcanincreasetotalcustomervaluebyimprovingproduct,services,personnel,orimagebenefits.Second,Caterpillarcanreducethebuyer’snon-monetarycostsbylesseningthebuyer’stime,energy,andpsychiccosts.Third,Caterpillarcanreducethebuyer’smonetarycostsbyloweringitsprice,providingeasiertermsofsale,or,inthelongerterm,loweringitsbulldozer’soperatingormaintenancecosts.CustomerSatisfactionThus,consumersformjudgmentsaboutthevalueofmarketingoffersandmaketheirbuyingdecisionsbaseduponthesejudgments.Customersatisfactionwithapurchasedependsontheproduct’sperformancerelativetoabuyer’sexpectations.Acustomermightexperiencevariousdegreesofsatisfaction.Iftheproduct’sperformancefallsshortofexpectations,thecustomerisdissatisfied.Ifperformancematchesexpectations,thecustomerissatisfied.Ifperformanceexceedsexpectations,thecustomerishighlysatisfiedordelighted.

Buthowdobuyersformtheirexpectation?Expectationsarebasedonthecustomer’spastbuyingexperiences,theopinionsoffriendsandassociates,andmarketerandcompetitorinformationandpromises.Marketersmustbecarefultosettherightlevelofexpectations.Iftheysetexpectationstoolow,theymaysatisfythosewhobuybutfailtoattractenoughbuyers.Incontrast,iftheyraiseexpectationstoohigh,buyersarelikelytobedisappointed.Forexample,HolidayInnranacampaignafewyearsagocalled“NoSurprises,”whichpromisedconsistentlytrouble-freeaccommodationsandservice.Today’swinningcompaniestracktheircustomers’expectations,perceivedcompanyperformance,andcustomersatisfaction.However,customersatisfactionmeasuresaremeaningfulonlyinacompetitivecontext.Forexample,acompanymightbepleasedtofindthat80percentofitscustomerssaytheyaresatisfiedwithitsproducts.However,ifacompetitorisattaining90percentcustomersatisfactionandaimingfor100percent,thecompanymayfindthatitislosingcustomerstothecompetitor.Thus,companiesmustmonitorboththeirownandcompetitors’customersatisfactionperformance.However,HolidayInnguestsstillencounteredalostofproblems,andtheexpectationscreatedbythecampaignonlymadecustomersmoredissatisfied.HolidayInnhadtowithdrawthecampaign.2.DeliveringCustomerValueandSatisfactionCustomervalueandsatisfaction

areimportantingredientsinthemarketer’sformulaforsuccess.Butwhatdoseittaketoproduceanddelivercustomervalue?Toanswerthis,wewillexaminetheconceptsofavaluechainandavaluedeliverysystem.ValueChainMichaelPorterproposedthevaluechainasthemajortoolforidentifyingwaystocreatemorecustomervalue(seetextP42-43Fig.3.1).Everyfirmconsistsofacollectionofactivitiesperformedtodesign,produce,market,deliver,andsupportthefirm’sproducts.Thevaluechainbreaksthefirmintoninevalue-creatingactivitiesinanefforttounderstandthebehaviorofcostsinthespecificbusinessandthepotentialsourcesofcompetitivedifferentiation.Theninevalue-creatingactivitiesincludefiveprimaryactivitiesandfoursupportactivities.Theprimaryactivitiesinvolvethesequenceofbringingmaterialsintothebusiness(inboundlogistics),operatingonthem(operations),sendingthemout(outboundlogistics),marketingthem(marketingandsales),andservicingthem(service).Thesupportactivitiesoccurwithineachoftheseprimaryactivities.Forexample,procurementinvolvesobtainingthevariousinputsforeachprimaryactivity—onlyafractionofprocurementisdonebythepurchasingdepartment.Technologydevelopmentandhumanresourcemanagementalsooccurinalldepartments.Thefirm’sinfrastructurecoverstheoverheadofgeneralmanagement,planning,finance,accounting,andlegalandgovernmentaffairsbornebyalltheprimaryandsupportactivities.Underthevalue-chainconcept,thefirmshouldexamineitscostsandperformanceineachvalue-creatingactivitytolookforimprovements.Italsoshouldestimateitscompetitors’costsandperformancesasbenchmarks.Totheextentthatthefirmcanperformcertainactivitiesbetterthanitscompetitors,itcanachieveacompetitiveadvantage.Thefirm’ssuccessdependsnotonlyonhowwelleachdepartmentperformsitswork,butalsoonhowwelltheactivitiesofvariousdepartmentarecoordinated.Toooften,individualdepartmentsmaximizetheirowninterestsratherthanthoseofthetotalcompanyandthecustomer.Successfulcompaniesdevelopsuperiorcapabilitiesinmanagingtheseandothercoreprocesses.Inturn,masteringcorebusinessprocessesgivesthesecompaniesasubstantialcompetitiveedge.Forexample,oneofWal-Mart’sgreatstrengthsisitssuperiorityinhandlingtheinventorymanagementandorderflowprocessAsindividualWal-MartstoresselltheirgoodssalesinformationflowsnotonlytoWal-Mart’sheadquarterbuttoWal-Mart’ssuppliers,whoshipreplacementgoodstoWal-Martstoresalmostasfastastheproductsmoveofftheshelf.ValueDeliverySystemInitssearchforcompetitiveadvantage,thefirmneedstolookbeyonditsownvaluechainandintothevaluechainsofitssuppliersanddistributors,andultimately,itscustomers.Morecompaniestodayare“partnering”withtheothermembersofthesupplychaintoimprovetheperformanceofthecustomervaluedeliverysystem.ForexampleCampbellSoupoperatesaqualifiedsupplierprograminwhichitsetshighstandardsforquality,on-timedelivery,andcontinuousimprovement.Campbellthenassignsitsownexpertstoworkwithsupplierstoconstantly;improvetheirjointperformance.Ascompaniesstruggletobecomemorecompetitivetheyareturningironicallytogreatercooperationcompaniesusedtoviewtheirsuppliersanddistributorsascostcenters,andinsomecasesasadversaries.Todayhowever,theyareselectingpartnerscarefullyandworkingoutmutuallyprofitablestrategies.Increasinglyintoday’smarketplace,competitionnolongertakesplacebetweenindividualcompetitors.Rather,ittakesplacebetweenthevaluedeliverysystemscreatedbythesecompetitors.Therefore,marketingcannolongerbethoughtofasonlyasellingdepartment..Thatviewofmarketingwouldgiveitresponsibilityonlyforformulatingapromotion-orientedmarketingmix,withoutmuchsayaboutproductfeatures,costsandotherimportantelements.Underthenewview,marketingisresponsiblefordesigningandmanagingasuperiorvaluedeliverysystemtoreachtargetcustomersegments.Today’smarketingmanagersmustthinknotonlyaboutsellingtodayproductsbutalsoabouthowtostimulatethedevelopmentofimprovedproducts,howtoworkactivelywithotherdepartmentinmanagingcorebusinessprocesses,andhowtobuildbetterexternalpartnershipsReviewofKeytermsandConceptscustomerdeliveredvalue:theconsumer’sassessmentoftheproduct’soverallcapacitytosatisfyhisorherneeds.Thedifferencebetweentotalcustomervalueandtotalcustomercostofamarketingoffer—“profit”tothecustomer顧客讓渡價(jià)值.totalcustomervalue:thetotalofalloftheproduct,services,personnel,andimagevaluesthatabuyerreceivesfromamarketingoffer.總體顧客價(jià)值totalcustomercost:

Thetotalofallthemonetary,time,energy,andpsychiccostsassociatedwithamarketingoffer.總體顧客成本valuechain:amajortoolforidentifyingwaystocreatemorecustomervalue.價(jià)值鏈customervaluedeliverysystem:thesystemmadeupofthevaluechainsofthecompanyanditssupplier,distributors,andultimatelycustomerswhoworktogethertodelivervaluetocustomers顧客價(jià)值讓渡系統(tǒng)Infrastructure:thebasicfacilities,services,andinstallationsneededforthefunctioningofacommunityorsociety,suchastransportationandcommunicationssystems,waterandpowerlines,andpublicinstitutionsincludingschools,postoffices,andprisons基礎(chǔ)設(shè)施DiscussionandReviewQuestions:1.Howdocustomersmaketheirchoices?2.Whatisthecustomervalue?3.Whatisthecustomersatisfaction?4.Repeattheexampleforthecustomervalue.5.Whatisthecustomersatisfactionwith?6.Howdobuyersformtheirexpectation?7.Arethecustomervalueandsatisfactionimportantingredientsinthemarketer’sformulaforsuccess?8.Whatisthevaluechain?Andwhatisthecustomervaluedeliverysystem?9.WhatdidMichaelPorterproposedasthemajortoolforidentifyingwaystocreatemorecustomervalue?10.Canthemasteringcorebusinessprocessesgivethesesuccessfulcompaniesasubstantialcompetitiveedge?SelectedAnswers

toExercisesinUnit3I.Nofixedanswerstothesequestions;Studentsmaymakefreespeechaccordingtothetext.II.1.array2.mobility3.anticipated4.assessment5.augmenting6.dissatisfied.7.affinity8.monitor9.compare10.ultimatelyIII.1.g2.a

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