Marketing Management 12e, Kotler and Kellner

Summary: Chapter 5 (pages 139 - 171)

Building Customer Value, Satisfaction and Loyalty

Successful marketing companies invert the chart and see customers at the top and managers at every level must be personally involved in knowing, meeting and serving customers.

Customer Perceived Value
Customers are more educated and informed than ever and they have the tools to verify companies’ claims and seek out superior alternatives. They estimate which offer will deliver the most perceived value and act on it.
Customer perceived value (CPV) is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
Total customer value is the perceived monetary value of the bundle of economic, functional and psychological benefits customers expect from a given market offering.
Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using and disposing of a given market offering, including monetary, time, energy and psychic costs.

Applying value concepts = what the customer perceives as value and applying these.
Choices and implications = (given in the context of the tractor example) ▪ The buyer may be under orders to buy at the lowest price ▪ The buyer will retire before the company realises that the product is more expensive to run ▪ The buyer enjoys a long-term friendship with one of the sales people
Buyers operate under various constraints and occasionally make choices that give more weight to their personal benefit than to the company’s benefit.
Delivering high customer value =
Loyalty (as defined by Oliver) = a deeply held commitment to re-buy or re-patronise a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause