Customer Loyalty and Product Strategy

1. Customer Loyalty and Product Strategy Chapter 12

2. Customer Satisfaction Firms are in control of: • Basics • Support • Process for problems • Extraordinary services

3. Developing Extraordinary Services • Individual, personalized attention • Ask and remember their wants • Overkill on communication • Follow-up on lost customers

4. Customer Service As A Competitive Advantage • Small firms can give more individual attention to customers • Fewer Employees: • employees have latitude in responding to customer needs

5. Problem Recognition • This stage must occur first • Current state differs from ideal state • Influencing factors: • changing the actual state • affecting the desired state

6. Information Search and Evaluation • Collection and evaluation of information (using internal/external sources) • This process will take longer for a new product

7. Purchase Decision • How and where to make purchase • many outlets to choose from • In-store features are important in obtaining the purchase

8. Post-Purchase Evaluation • Decision-making process continues after purchase • cognitive dissonance and complaints are related to satisfaction • Consumers vary in their acts when they are displeased

9. Psychological Factors • Needs – same products satisfies needs differently • Perceptions – individuals’ interpretation that gives meaning to different stimuli • understanding helps with planning communications • Motivations – force that gives direction to unsatisfied needs • can help marketers to appeal to consumers • Attitudes – Opinion; based on knowledge, feeling, and behavioral tendency • Can be an obstacle or catalyst

10. Product Development • Idea Accumulation - many ideas; varied origins • Business Analysis - study idea in relation to financial concerns; Can it be profitable? • Total Product Development - planning, branding, packaging, pricing, promotion - prototype • Product Testing - lab tests/test markets

11. Branding • Identify product verbally/symbolically • easy to pronounce and remember • descriptive • legal protection • promotional possibilities • used on more than one product line

13. Sociological Factors • Culture – behavioral patterns and values that characterize a group of customers • Tremendous impact on purchase and/or use of product • Social Class – divisions within a society having different levels of social prestige • Lifestyles differ with social class

14. Sociological Factors • Reference Groups – groups an individual allows to influence his/her behavior • Why this occurs/how can it be used to promote sales • Opinion Leaders – group members w/key role • Important to identify opinion leaders