If you are a part of an organization, if you are an employee in an organization or if you are a business man providing with raw materials or finished goods to an organization, YOU are an internal customer. An internal customer is someone who helps the organization serve the end customer. He is an integral part of the value chain. As profit is the main motive of an organization, the organization needs to take care not only of the end customers but also people who are serving the end customers i.e the Internal customers.
Customer perceived value, CPV
October 12, 2010 By 2 Comments
Customers will buy from the firm that they see as offering the highest perceived value .
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 or 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 the given marketing offering.
Customer perceived value
RELATIONSHIP MARKETING
October 3, 2009 By 1 Comment
WHAT IS RELATIONSHIP MARKETING?
Relationship Marketing -The process of creating , maintaining and enhancing strong ,value-laden relationships with Customers and other stakeholders. Relationship marketing is based on the premise that important accounts need focused and continuous attention. Let us look at a relationship focused definition of marketing
Relationship focused definition of marketing – ‘The purpose of marketing is to establish, maintain, enhance and commercialize customer relationships (often, but not necessarily always, long term relationships) so that the objectives of the parties involved are met. This is done by the mutual exchange and fulfilment of promises. – Gronroos, C (1990)
Specifically speaking relationship marketing focuses on with the following Focal point is integrating customer service and quality with a market orientation. Focus is on getting and keeping customers Concept of total quality across all functions focuses on total relationship between firm and its customers, suppliers and key markets on an ongoing basis
GROWING IMPORTANCE OF RELATIONSHIP MARKETING
You would agree that today’s customers face a growing range of choices in the products and services they can buy . . They are making their choice on the basis of their perceptions of quality, service, and value. Companies need to understand the determinants of customer value and satisfaction.
Here lies the role of relationship marketing. A major challenge for high-performance companies is that of building and maintaining viable businesses in a rapidly changing marketplace. They must recognize the core elements of the business and how to maintain a viable fit between their stakeholders, processes, resources, and organization capabilities and culture
To create customer satisfaction, companies must manage their value chain as well as the whole value delivery system in a customer-centered way. The company’s goal is not only to get customers, but even more importantly to retain customers. Customer relationship marketing provides the key to retaining customers and involves providing financial and social benefits as well as structural ties to the customers. Companies must decide how much relationship marketing to invest in different market segments and individual customers, from such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on estimating customer lifetime value against the cost stream required to attract and retain these customers.
Value Chain – Porter
August 30, 2009 By 3 Comments
Michael Porter of Harvard proposed the value chain as a tool for identifying ways to create more customer value. Every firm is a synthesis of activities the are performed to design, produce, market, deliver, and support its product. The value chain identifies nine strategically relevant activities that create value and cost in a specific business. These nine value creating activities consist of five primary activities and four support activities.The primary activities represent the sequence of bringing materials into the business ( inbound logistics), converting them into final products ( operations), shipping out final products (outbound logistics), marketing them ( marketing and sales), and servicing them (service). The support activities – procurement, technology development, human resource management, and firm infrastructure – are handled in certain specialized departments, but not only there.
For example, several departments may do some procurement and hiring of people. The firm’s infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs that are borne by all the primary and support activities.
