Customer Value, Satisfaction & Brand Loyalty
Customer Value, Satisfaction & Brand Loyalty
Marketing Management’s Delicate Balance
For new customers, setting appropriate expectations is crucial. High expectations risk buyer disappointment, while exceeding expectations fosters brand loyalty beyond mere product preference. Complacency builds emotional connections, strengthening the bond with the brand. The aim of marketing management is to generate customer value and company profitability—a delicate balance.
Quality and Customer Satisfaction
Quality directly impacts product/service function and is intrinsically linked to value and customer satisfaction. While strictly defined as “absence of defects,” customer-oriented companies expand this definition. Modern quality-oriented customer satisfaction programs aim for measurable results—a “return on quality.” The quality offering is shaped by consumer preferences; a strong fit leads to improved sales and profits.
Exchange Transactions & Relationships
Exchange occurs when individuals fulfill needs and desires. It involves obtaining something in return. The division of labor enhances exchange efficiency. Exchange is central to marketing, with transactions as the exchange unit. Not all transactions involve money, but each involves at least two valuable objects, agreed conditions, time, and place. Transaction marketing is part of relationship marketing. Instead of maximizing individual transactions, it prioritizes mutually beneficial consumer and agent relationships. Relationship marketing is ideal for clients significantly impacting a company’s future. A small portion of clients often accounts for a large portion of sales. Frequent visits and business suggestions benefit both client and company. Personal relationships require planning and attention. Relationship marketing often yields higher returns on investment by fostering customer loyalty and repeat transactions compared to attracting new customers. Potential benefits include combined sales calls, offering related products/services, sometimes through strategic alliances.
Markets
The concept of transaction leads to the market. A market comprises actual and potential buyers who can transact with a seller. In developed capitalist economies, the market is primarily a conceptual, rather than geographic, space.
Marketing is a fundamental corporate governance process, extending its influence to social and political environments. It facilitates access to needed products and value through production and exchange.
Needs, Wants, & Demands
Marketing’s most basic concept is need—a perceived lack of something, including basic physical and social needs. Individuals with disposable income seek goods and services to meet their needs. Wants are needs shaped by culture and personality. Demand arises from limited income despite unlimited wants. Consumers assess products’ benefits and choose those offering the most value for the price. Individuals meet demands by purchasing products—anything satisfying needs or wants. This includes experiences, people, places, organizations, information, and ideas.
Value, Satisfaction & Quality
Consumers choose among various goods and services based on perceived value. The marketing model explains purchase decisions based on perceived value.
Consumer Value
Consumer value is the difference between benefits and costs (monetary and non-monetary, such as time and effort). Marketing management aims to increase product value for the target market. This requires understanding customers and creating value for them—an ongoing process due to changing consumers and competition.
Customer Satisfaction
Customer satisfaction depends on whether a product’s value meets buyer expectations. Low value leads to dissatisfaction; meeting expectations leads to satisfaction; exceeding expectations leads to delight. Managing expectations is crucial. Setting expectations too low satisfies buyers but may not attract new ones.