管理学Marketing-Orientati教学讲解课件

MarketingStrategy:

MarketOrientationandPerformance1MarketingStrategy:

MarketOriLetmetellyouastory…2Letmetellyouastory…2MARKETINGProcessofPLANNINGandEXECUTING…the4Psideas,goods,andservices…tocreateexchanges…thatsatisfyindividualandorganizationalobjectives3MARKETINGProcessofPLANNINGaTheMarketingStrategyPlanningProcessExternalMarketEnvironment4TheMarketingStrategyPlanninMarketingMixPlacePromotionPriceProductC•Quality•Features•Style/Options•Brandname•Packaging•Services/parts•Guarantees/Warranty•Listprice•Discounts•Allowances•Creditterms•Paymentperiod•Rental/lease•Advertising•Personalselling•Salespromotion•Point-of-purchasematerials•Publicity•Middlemen:typesandnumber•Location•Inventorylevels•Transportation5MarketingMixPlacePromotionPriWeneedtodevelopastrongmarketingorientation…notaproductionorientation“consumerswillfavorproductsthatareavailableandhighlyaffordable,thus,managementshouldfocusonimprovingproductionanddistributionefficiency”…notaproductphilosophy“consumerswillfavorproductsthatofferthemostquality,performance,andfeatures6Weneedtodevelopastrongma…orasellingconcept“consumerswillnotbuyenoughoftheproductsunlesstheorganisationundertakesalarge-scalesellingandpromotioneffort”7…orasellingconcept7Marketorientationcontinuouscollectionofinformationaboutcustomers’needs,andcompetitorscapabilitiessharingthisinformationacrossdepartmentsusingtheinformationtocreatecustomervalue.8MarketorientationcontinuouscValueandSatisfactionValueCustomersformexpectationsregardingvalueMarketersmustdelivervaluetoconsumersValueReflectsBenefitsandCostsCostsBenefitsValueconcernsthedifferencebetweenthebenefitsacustomerseesfromafirm’smarketofferingandthecostsofobtainingthosebenefitsThecustomer’sviewofcostsandbenefitsisnotjustlimitedtoeconomic(orevenrational)considerations--andalowpricemayNOTresultinsuperiorvalue...9ValueandSatisfactionValueValProvidedbymarketingProvidedbyproductionwithguidanceofmarketingTaskTimePlacePossessionUtilityValuethatcomesfromsatisfyinghumanneedsFormTypesofUtilityandHowTheyAreProvidedUtilityisthebenefitorcustomervaluereceivedbyusesofaproduct.Utility10ProvidedbymarketingProvidedWeneedtoadoptamarket-basedmanagementphilosophyDevelopingacustomer-ormarket-centricorientationratherthanproduct-orfactory-focus.CreatinganemployeeculturethatisresponsivetocustomersandchangingmarketconditionsMeasuringprofitsatthemarketlevelandtotrackmarket-basedperformancemetrics.11Weneedtoadoptamarket-baseWeneedtoadoptamarket-basedmanagementphilosophyMeasuringprofitsatthemarketlevelandtotrackmarket-basedperformancemetrics.ABalancedScorecardPerspectiveonPerformanceSource:AManagementGuideforthedeploymentofstrategicmetrics,Ratheon12Weneedtoadoptamarket-baseExhibit1.7

DifferencesBetweenProduction-OrientedandMarket-OrientedOrganizations

(1of2)ProductionorientationCompanysellswhatitcan make;primaryfocusonfunctionalperformanceandcost.Narrow.Basedonproductionanddistributioncosts.Technicalresearch;focusonproductimprovementandcostcuttingintheproductionprocess.BusinessactivityorfunctionProductofferingProductlinePricingResearchMarketingorientationCompanymakeswhatitcansell;primaryfocusoncustomers’needsandmarketopportunities.Broad.Basedonperceivedbenefitsprovided.Marketresearch;focusonidentifyingnewopportunitiesandapplyingnewtechnologytosatisfycustomerneeds.13Exhibit1.7

DifferencesBetweeWeneedtodevelopastrongcustomerfocusforlong-runsurvivalWhathappenswhenweunderwhelmourcustomers?AdoptedfromBest,RogerJ.Market-BasedManagement:StrategiesforGrowingCustomerValueandProfitability.Pearson-PrenticeHall,2005.14WeneedtodevelopastrongcuMeasuringCustomerSatisfactionCustomerSatisfactionIndex(CSI)–derivedfromcustomers’ratingsoftheiroverallsatisfactiononasix-pointscale.VeryDissatisfiedModeratelyDissatisfiedSomewhatDissatisfiedSomewhatSatisfiedModeratelySatisfiedVerySatisfied(0)(20)(40)(60)(80)(100)15MeasuringCustomerSatisfactioIsaCSIof72good?16IsaCSIof72good?16MarketPerformanceMetricsSalesMarketshareCustomersatisfaction17MarketPerformanceMetricsSaleCustomerSatisfactionandCustomerProfitability18CustomerSatisfactionandCust1919TheValueofCustomerSatisfactionUnhappyCustomersOnly4%ofdissatisfiedcustomerscomplainOver90%ofunhappycustomerswon’tbebackEachdissatisfiedcustomertellsnineotherpeopleHappyCustomersRetainingcustomerscostsone-fifthtoone-sixthlessSatisfiedcustomersarewillingtopaymoreEachhappycustomerwilltellfivepeopleaboutgoodservice20TheValueofCustomerSatisfacCustomerDissatisfactionandCustomerExit21CustomerDissatisfactionandCUnderstandingyourcustomersonthetwodimensionsofdifferentiationUnderstandwhatdifferentcustomersareworthtoyouUnderstandwhatyourvaluablecustomersneedfromyouEnablesyouto:ConcentrateonthosewiththebestpotentialMakesureyousatisfytheirneedsBecareful:Theword‘Value’worksbothwaysWhatistheirValue?WhatdotheyValue?22UnderstandingyourcustomersoCustomerValuationNotallcustomersareequalWhoisa“good”customer?LargeaccountLoyalAlwayspaysontime…Highlife-timevalue23CustomerValuationNotallcustCustomerlifetimevalueLosingacustomermeanslosingtheentirestreamofpurchasesthatthecustomerwouldmakeoveralifetimeofpatronageSupermarket:$50,000lostpersulkingcustomer$100/weekx50weeksperyearx10yearsLexus$600,000inlifetimesalesTacoBell$12,00024CustomerlifetimevalueLosingMeasuringCustomerEquity:

CalculatingLifeTimeValueofEachCustomerValueatAcquisitionrevenues(applicationfee+initialpurchase)Lesscosts(marketing+creditcheck+accountsetup)AnnualValue(projectforeachyearofrelationship)revenues(annualfee+sales+servicefees+valueofreferrals)Lesscosts(accountmanagement+costofsales+write-offs)NetPresentValueDetermineanticipatedcustomerrelationshiplifetimeSelectappropriatediscountfigureSumanticipatedannualvalues(futureprofits)atchosendiscountrateCustomerEquityistotalsumofNPVsofallcurrentcustomers25MeasuringCustomerEquity:

CaLife-TimeValueofCustomer26Life-TimeValueofCustomer26Example:ValueofTennisClubMemberYouownatennisclubwheretheannualmembershipfeeis$300.Theaverageclubmemberspendsabout$100dollarsayearattheclub(inballs,drinks,snacks,etc.).Theannualcostofthesemiscellaneousgoods(theballs,drinks,snacks,etc)toyouis$40perplayer.Onaveragepeoplewhojoinatennisclubhaveaplayingcareerof6years.Historically,80%ofthemembersinagivenyearrejointhefollowingyear.Thediscountrateofmoneyis8%ayear.Basedonthisinformation,whatisthelife-timevalueofacustomer?27Example:ValueofTennisClubTennisClubExample:Life-TimeValueofCustomer28TennisClubExample:Life-TimeTennisClubExample:Improvements29TennisClubExample:ImprovemeSatisfiedcustomers=loyalcustomers?Assatisfiedcustomersincreases,sodoesloyaltyThereisatremendousdifferencebetweentheloyaltyofsatisfiedcustomersandcompletelysatisfiedcustomers.LoyaltyHighLowLocaltelephoneAirlinesPersonalComputersHospitalsAutomobilesSatisfactionCompletelydissatisfiedCompletelysatisfiedNon-competitiveZoneHighlycompetitiveZone30Satisfiedcustomers=loyalcuCustomerLoyaltyIndex(CLI)CLI=(CustomerSatisfaction)x(CustomerRetention)x(CustomerRecommendation)31CustomerLoyaltyIndex(CLI)CL CommTechisa$454millionbusinessthatmanufacturesawiderangeofimaginganddatatransmissionproductsformedical,industrial,andbusiness-to-businessmarkets.Fiveyearsago,anewmanagementteamwasputinplaceafterseveralyearsofdisappointingperformance.Thenewmanagementteamreorganizedthebusinessanddesignedprogramstolowerunitcosts,controloverheadexpenses,andfacilitatebettermanagementofassets.Thenewmanagementteamalsoputinplaceanextensivesalestrainingprogramthatenabledthesalesforcetoimproveitssalesproductivityfrom$1.4millionto$2.2millionpersalesperson.MoreonMarketingPerformanceandProfitability32 CommTechisa$454millionbuMoreonMarketingPerformanceandProfitabilityHowwouldyouratethecompany’sperformanceoverthelast5years?Whataspectsofthecompany’sperformanceweremostimpressive?Shouldthecompanyfollowthesamestrategyforthenext5years?CommTech’s5-YearFinancialPerformance33MoreonMarketingPerformanceMarketingPerformance34MarketingPerformance34PerformanceMetricsFinancialPerformanceMetricsCostProductivityProfitabilityMarketingPerformanceMetricsMarketCompetitivenessCustomer35PerformanceMetricsFinancialPExample:SantaFeSportswearCompanyShouldthecompanydropthecasualshortsandknittedsweatersproductlines?36Example:SantaFeSportswearCProfitMeasuresNetProfits(beforetaxes)=Revenues–ExpensesProfitscasualshorts =SalesRevenues–CGS–OpExpenses

=$10M-$8M-$3M =-$1M37ProfitMeasuresNetProfits(beProfitMeasuresProfitscasualshorts=SRev–CGS–Mktg&SalesExp–OtherOpExp -$1M =$10M-$8M-$1M-$2M -$1M = $1M-$2M38ProfitMeasuresProfitscasualProfits(beforetax)=(AllProductNMCs)-OE39Profits(beforetax)=(AllPrProduct-focusedMarketingProfitability40Product-focusedMarketingProfCustomer-focusedMarketingProfitability41Customer-focusedMarketingProMarket-basedStrategiesandProfitableGrowth42Market-basedStrategiesandPrQuestion

Companiesoftentalkabouttheirstrategies.Whatdoes

strategy

mean?

Afundamentalpatternofpresentandplannedobjectives,resourcedeployments,andinteractionsofanorganizationwithmarkets,competitors,andotherenvironmentalfactors.43Question43AModelforMarketingStrategyFormulationSOURCE:E.RaymondCorey,MarketingStrategy—anOverview44AModelforMarketingStrategyStrategyPlanningforPRODUCTPlaceProductPricePromotionBrandTypeofBrand:Individualor

familyManufactureror

dealerProductIdeaPhysicalgood/serviceFeaturesQualitylevelAccessoriesInstallationInstructionsProductlineWarrantyNone,full,orlimitedPackageProtection,Promotion,orbothTargetMarket45StrategyPlanningforPRODUCTPLevelsofaProductAugmentedProductActualProductCoreProduct46LevelsofaProductAugmentedPHowServicesDifferFromGoodsIntangibilityInseparabilityHeterogeneity(Variability)Perishability47HowServicesDifferFromGoodsBrandStrategyBrandNameSelection

BrandSponsorshipBrandDevelopmentGoodBrandNames:SuggestsomethingabouttheproductoritsbenefitsAreeasytosay,recognizeandrememberAredistinctiveAreextendableTranslatewellintootherlanguagesCanberegisteredandlegallyprotected48BrandStrategyBrandNameSelecBrandStrategyBrandNameSelectionBrandSponsorshipBrandDevelopmentManufacturer(national)brands...createdandownedbytheproducerPrivate(store)brands...createdandownedbytheresellerCostlytoestablishandpromoteHigherprofitmarginsLicensedbrandsNameandcharacterlicensinghasgrownCo-brandingGeneric49BrandStrategyBrandNameSelecBrandStrategyBrandNameSelectionBrandSponsorshipBrandDevelopmentPRODUCTCATEGORYNewLINEEXTENSIONNEWBRANDSMULTIBRANDSBRANDEXTENSIONExistingExistingbrandnameNewbrandname50BrandStrategyBrandNameSelecTheProductLifeCycleProfit+–$0IntroductionGrowthMaturityDeclineTimeSales51TheProductLifeCycleProfit+–TheProductLifeCycle

CharacteristicsofEachStage–TotalIndustryProfit+$0IntroductionGrowthMaturityDeclineTimeTotalIndustrySalesLowHighNegativeInnovatorsFewRapidlyrisingthenslowingdownLowerthanintroHigh/peakprofits,thenstartstodeclineEarlyadoptersandearlymajorityGrowingno.ofimitatorsPeaksales;cyclicitysetsinLowAverageMiddle/latemajorityMostnumber,thenstartstodeclineDecliningFallingDecliningLaggardsFurtherdeclineSalesPricesProfits(perunit)CustomersCompetitionCHARACTERISTICS52TheProductLifeCycle

CharactProductLife-CycleStrategiesProductdevelopmentIntroductionGrowthMaturityDeclineBeginswhenthecompanydevelopsanew-productideaSalesarezeroInvestmentcostsarehighProfitsarenegative53ProductLife-CycleStrategiesPProductLife-CycleStrategiesProductdevelopmentIntroductionGrowthMaturityDeclineLowsalesHighcostpercustomeracquiredNegativeprofitsInnovatorsaretargetedLittlecompetitionStrategiesProduct–OfferabasicproductPrice–Usecost-plusbasistosetDistribution–BuildselectivedistributionAdvertising–Buildawarenessamongearlyadoptersanddealers/resellersSalesPromotion–Heavyexpenditurestocreatetrial54ProductLife-CycleStrategiesPProductLife-CycleStrategiesProductdevelopmentIntroductionGrowthMaturityDeclineRapidlyrisingsalesAveragecostpercustomerRisingprofitsEarlyadoptersaretargetedGrowingcompetitionStrategiesProduct–Offerproductextensions,service,warrantyPrice–PenetrationpricingDistribution–BuildintensivedistributionAdvertising–BuildawarenessandinterestinthemassmarketSalesPromotion–Reduceexpenditurestotakeadvantageofconsumerdemand55ProductLife-CycleStrategiesPProductLife-CycleStrategiesProductdevelopmentIntroductionGrowthMaturityDeclineSalespeakLowcostpercustomerHighprofitsMiddlemajorityaretargetedCompetitionbeginstodeclineStrategiesProduct–DiversifybrandandmodelsPrice–SettomatchorbeatcompetitionDistribution–BuildmoreintensivedistributionAdvertising–StressbranddifferencesandbenefitsSalesPromotion–Increasetoencouragebrandswitching56ProductLife-CycleStrategiesPProductLife-CycleStrategiesProductdevelopmentIntroductionGrowthMaturityDeclineDecliningsalesLowcostpercustomerDecliningprofitsLaggardsaretargetedDecliningcompetitionStrategiesProduct–PhaseoutweakitemsPrice–CutpriceDistribution–Useselectivedistribution:phaseoutunprofitableoutletsAdvertising–Reducetolevelneededtoretainhard-coreloyalistsSalesPromotion–Reducetominimallevel57ProductLife-CycleStrategiesPStrategyPlanningforPRICEPricingobjectivesTargetMarketPricePromotionPlaceProductGeographicterm—whopaystransportationandhowDiscountsandallowances—towhomandwhenPricelevelsoverproductlifecyclePriceflexibility58StrategyPlanningforPRICEPriOverviewofthePricingComponentPerformanceObjectives(salesvolume,profit)SettingPriceswithinandacrossMarketSegmentsIndustryPricingValue-basedPricingTransactionalPricingPriceElasticityofDemand

AssessingOurCompetitiveAdvantage

PriceSettingBasedonCustomerValueBreakevenAnalysisPricingtoMaximizeProfitsFeasibilityAnalysisforPricingDecisionsIndustryStrategyProduct/MarketStrategyTransaction59OverviewofthePricingComponThreeLevelsofPriceManagementIndustryPricingValue-basedPricingTransactionalPricingUnderstandandmanagetheoverallmarketpricingtrendsFrametheoptimalpricepositioningonaprice/valuebasisManagetheexactpriceforeachtransactionSettingPricingPolicyManagingPriceDABCE60ThreeLevelsofPriceManagemePriceLevelPolicies:SkimmingPriceQuantityInitialskimmingpriceSecondpriceFinalpriceSkimmingPricingSellathighpricebeforereducingtonextpricelevelandrepeat“Skimthecream”pricinginvolvessellingatahighpricetothosewhoarewillingtopaybeforeaimingatmoreprice-sensitiveconsumers.AttractiveifdemandisinelasticattheupperpricerangesMaymaximizeprofitsduringintroductionofaninnovation,speciallyifthereislittlecompetitionHowever...Thispolicymaybesubjecttosocialcriticism.Italsobecomesaseriousproblemiffirmsdon’thaveanyincentivetotakeassociatedrisks.61PriceLevelPolicies:SkimmingPriceQuantityPenetrationPricingWholemarketpriceHowever...ThispolicymaydiscourageretailersfromcarryingthebrandItmayalsojeopardizeprofitabilityobjectivesofthefirm.Makessensewhen:marketispricesensitiveeconomiesofscaleexistlowpricekeepsoutcompetitionPenetrationpricinginvolvessellingthewholemarketatonelowprice.PriceLevelPolicies:Penetration62PriceQuantityPenetrationPriciPrice-AdjustmentStrategiesDiscountsAllowancesPromotionalPricing63Price-AdjustmentStrategiesDisDISTRIBUTIONTypeofchannelTypeofphysicaldistributionfacilitiesneededHowtomanagechannelsMiddlemen/facilitatorsneededDegreeofmarketexposuredesiredIndirectDirectPlaceobjectivesCustomerserviceleveldesired64DISTRIBUTIONTypeofTypeofHowDistributionChannel…isasetofinterdependentorganizationsinvolvedintheprocessofmakingaproductavailableforuseorconsumptionbytheconsumermanufacturerwholesalerretailercustomer65DistributionChannel…isasetChannelManagementDecisionsSelectingchannelmembersMotivatingchannelmembersEvaluatingchannelmembersManagingconflictsbetweenchannelmembers66ChannelManagementDecisions66PROMOTIONTargetMarketPricePromotionPlaceProductSalesPromotionPersonalSellingPublicityAdvertisingMassSelling67PROMOTIONTargetPricePromotionPTheCommunicationProcess68TheCommunicationProcess68Whatdoespromotionaccomplish?

0PriceQuantityD2D1A.TobemoreinelasticPromotioneffortsmaybetargetedtomakedemandforthefirm’sproductsmoreinelasticandsomoreresistanttocounter-movesbythecompetition.0PriceQuantityDDB.totherightPromotioneffortsmaybetargetedtoincreasethedemandforthefirm’sproducts.0PriceQuantityDDC.BothtotherightandmoreinelasticPromotioneffortsmaybetargetedtobothincreasedemandforthefirm’sproductsandtomakedemandmoreinelasticPromotionandtheDemandCurve69Whatdoespromotionaccomplish5WaysPromotionIncreasesProfitsIncreaseDemandSpeed-UpDemandAddValueIncreaseChannelPowerSaveSellingExpensesProfit=TR-TC705WaysPromotionIncreasesProSettingthe

PromotionalBudgetSettingtheTotalPromotionalBudgetObjectivesandTaskMethodUncommittedResources(AffordableMethod)MatchCompetitors(CompetitiveParity)PercentageofSales????????????????????-Pastorforecastedsales71Settingthe

PromotionalBudgeThePromotionalMix72ThePromotionalMix72Example:PromotionaltoolsusedovertheproductlifecycleofPurinaDogChowSettingthePromotionMixOverthePLC73Example:PromotionaltoolsusAcomparisonofpushandpullpromotionalstrategiesPushvsPull74AcomparisonofpushandpullAPush-PullStrategyforStainmasterCarpetFiber75APush-PullStrategyforStainPossibleEffectsofSalesPromotionSalestemporarilyincrease,thendecrease,thenreturntoregularlevelPeriodofpromotionUnitSalesTimeASalestemporarilyincreaseandthenreturntoregularlevelPeriodofpromotionUnitSalesTimeBSalesincreaseandthenremainathigherlevelPeriodofpromotionUnitSalesTimeC/en_US/products/fsci/offers_promotions.jhtml76PossibleEffectsofSalesPromAimedatmiddlemenPricedealsPromotionallowancesSalescontestsCalendarsGiftsTradeShowsMeetingsCatalogsMerchandisingaidsAimedatfinalconsumersorusersContestsCouponsAisledisplaysSamplesTradeshowsPoint-of-purchasematerialsBannersandstreamersTradingstampsSponsoredeventsAimedatcompany’sownsalesforceContestsBonusesMeetingsPortfoliosDisplaysSalesaidsTrainingmaterialsSalesPromotionActivities/Tools77AimedatmiddlemenPricedealsAPersonalSellingPersonalcommunicationofinformationtopersuadesomebodytobuysomething.78PersonalSelling78ImportanceandRoleofPersonalSellingSalespeoplearecommunicatorswhobuildrelationshipsSalespeoplerepresentthecompany–andcustomers,too!Salesforceaidsinthemarketinformationfunction.Salespeoplecanbestrategyplannersaswell.79ImportanceandRoleofPersonaPersonalSellingcanbedividedintothreetasksOrder-gettingOrder-takingSupporting80PersonalSellingcanbedivideInmanycircumstances,weareattemptingtosellourselvesorourideas.Firstimpressionsbecomelastingimpressions.thewaywepresentourselveswillevokecertainresponses.Thesensibleapproach,itseems,wouldbetoanalyzetheintendedcustomerandpresentoneselfinamannerthatislikelytoelicitapositiveresponse.Thewaywearereceivedislargelyunderourcontrol.81Inmanycircumstances,weareTargetMarket+MarketingMixTargetMarketMarketingMix=MarketingStrategy+Time-RelatedDetailsMarketingStrategyTime-RelatedDetailsMarketingPlan+OtherMarketingPlans=©2002McGraw-HillCompanies,Inc.,McGraw-Hill/IrwinElementsoftheMarketingProgramMarketingPlanOtherMarketingPlansAFirm’sMarketingProgram=82TargetMarket+MarketingMixTarMarketingStrategy:

MarketOrientationandPerformance83MarketingStrategy:

MarketOriLetmetellyouastory…84Letmetellyouastory…2MARKETINGProcessofPLANNINGandEXECUTING…the4Psideas,goods,andservices…tocreateexchanges…thatsatisfyindividualandorganizationalobjectives85MARKETINGProcessofPLANNINGaTheMarketingStrategyPlanningProcessExternalMarketEnvironment86TheMarketingStrategyPlanninMarketingMixPlacePromotionPriceProductC•Quality•Features•Style/Options•Brandname•Packaging•Services/parts•Guarantees/Warranty•Listprice•Discounts•Allowances•Creditterms•Paymentperiod•Rental/lease•Advertising•Personalselling•Salespromotion•Point-of-purchasematerials•Publicity•Middlemen:typesandnumber•Location•Inventorylevels•Transportation87MarketingMixPlacePromotionPriWeneedtodevelopastrongmarketingorientation…notaproductionorientation“consumerswillfavorproductsthatareavailableandhighlyaffordable,thus,managementshouldfocusonimprovingproductionanddistributionefficiency”…notaproductphilosophy“consumerswillfavorproductsthatofferthemostquality,performance,andfeatures88Weneedtodevelopastrongma…orasellingconcept“consumerswillnotbuyenoughoftheproductsunlesstheorganisationundertakesalarge-scalesellingandpromotioneffort”89…orasellingconcept7Marketorientationcontinuouscollectionofinformationaboutcustomers’needs,andcompetitorscapabilitiessharingthisinformationacrossdepartmentsusingtheinformationtocreatecustomervalue.90MarketorientationcontinuouscValueandSatisfactionValueCustomersformexpectationsregardingvalueMarketersmustdelivervaluetoconsumersValueReflectsBenefitsandCostsCostsBenefitsValueconcernsthedifferencebetweenthebenefitsacustomerseesfromafirm’smarketofferingandthecostsofobtainingthosebenefitsThecustomer’sviewofcostsandbenefitsisnotjustlimitedtoeconomic(orevenrational)considerations--andalowpricemayNOTresultinsuperiorvalue...91ValueandSatisfactionValueValProvidedbymarketingProvidedbyproductionwithguidanceofmarketingTaskTimePlacePossessionUtilityValuethatcomesfromsatisfyinghumanneedsFormTypesofUtilityandHowTheyAreProvidedUtilityisthebenefitorcustomervaluereceivedbyusesofaproduct.Utility92ProvidedbymarketingProvidedWeneedtoadoptamarket-basedmanagementphilosophyDevelopingacustomer-ormarket-centricorientationratherthanproduct-orfactory-focus.CreatinganemployeeculturethatisresponsivetocustomersandchangingmarketconditionsMeasuringprofitsatthemarketlevelandtotrackmarket-basedperformancemetrics.93Weneedtoadoptamarket-baseWeneedtoadoptamarket-basedmanagementphilosophyMeasuringprofitsatthemarketlevelandtotrackmarket-basedperformancemetrics.ABalancedScorecardPerspectiveonPerformanceSource:AManagementGuideforthedeploymentofstrategicmetrics,Ratheon94Weneedtoadoptamarket-baseExhibit1.7

DifferencesBetweenProduction-OrientedandMarket-OrientedOrganizations

(1of2)ProductionorientationCompanysellswhatitcan make;primaryfocusonfunctionalperformanceandcost.Narrow.Basedonproductionanddistributioncosts.Technicalresearch;focusonproductimprovementandcostcuttingintheproductionprocess.BusinessactivityorfunctionProductofferingProductlinePricingResearchMarketingorientationCompanymakeswhatitcansell;primaryfocusoncustomers’needsandmarketopportunities.Broad.Basedonperceivedbenefitsprovided.Marketresearch;focusonidentifyingnewopportunitiesandapplyingnewtechnologytosatisfycustomerneeds.95Exhibit1.7

DifferencesBetweeWeneedtodevelopastrongcustomerfocusforlong-runsurvivalWhathappenswhenweunderwhelmourcustomers?AdoptedfromBest,RogerJ.Market-BasedManagement:StrategiesforGrowingCustomerValueandProfitability.Pearson-PrenticeHall,2005.96WeneedtodevelopastrongcuMeasuringCustomerSatisfactionCustomerSatisfactionIndex(CSI)–derivedfromcustomers’ratingsoftheiroverallsatisfactiononasix-pointscale.VeryDissatisfiedModeratelyDissatisfiedSomewhatDissatisfiedSomewhatSatisfiedModeratelySatisfiedVerySatisfied(0)(20)(40)(60)(80)(100)97MeasuringCustomerSatisfactioIsaCSIof72good?98IsaCSIof72good?16MarketPerformanceMetricsSalesMarketshareCustomersatisfaction99MarketPerformanceMetricsSaleCustomerSatisfactionandCustomerProfitability100CustomerSatisfactionandCust10119TheValueofCustomerSatisfactionUnhappyCustomersOnly4%ofdissatisfiedcustomerscomplainOver90%ofunhappycustomerswon’tbebackEachdissatisfiedcustomertellsnineotherpeopleHappyCustomersRetainingcustomerscostsone-fifthtoone-sixthlessSatisfiedcustomersarewillingtopaymoreEachhappycustomerwilltellfivepeopleabout