Grahame R. Dowling
- Published in print:
- 2004
- Published Online:
- October 2011
- ISBN:
- 9780199269617
- eISBN:
- 9780191699429
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269617.003.0010
- Subject:
- Business and Management, Marketing
This chapter focuses on programmes to increase the likelihood that a customer will continue to buy the organization's products and services, to develop customer loyalty, or reduce customer churn. The ...
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This chapter focuses on programmes to increase the likelihood that a customer will continue to buy the organization's products and services, to develop customer loyalty, or reduce customer churn. The motivations for developing loyalty/ reducing churn are threefold. One is the notion of amortizing the costs of acquiring customers. A second motivation is to reduce the volatility of cash flows. A third motivation is to provide a solid foundation for growth. Part A of the chapter looks at which types of customers to retain. The key issue here is that some customers are likely to be unprofitable. For non-profitable customers to be retained, they must make a contribution to the organization's business performance in another way. Part B then examines how to retain the chosen customers. It outlines three strategies: customer value, customer satisfaction, and service quality.Less
This chapter focuses on programmes to increase the likelihood that a customer will continue to buy the organization's products and services, to develop customer loyalty, or reduce customer churn. The motivations for developing loyalty/ reducing churn are threefold. One is the notion of amortizing the costs of acquiring customers. A second motivation is to reduce the volatility of cash flows. A third motivation is to provide a solid foundation for growth. Part A of the chapter looks at which types of customers to retain. The key issue here is that some customers are likely to be unprofitable. For non-profitable customers to be retained, they must make a contribution to the organization's business performance in another way. Part B then examines how to retain the chosen customers. It outlines three strategies: customer value, customer satisfaction, and service quality.
Grahame R. Dowling
- Published in print:
- 2004
- Published Online:
- October 2011
- ISBN:
- 9780199269617
- eISBN:
- 9780191699429
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269617.003.0009
- Subject:
- Business and Management, Marketing
This chapter examines the task of assessing the value of the offer and looks at how to capture this value. Price setting is one of the most complicated of all the marketing activities. In practice, ...
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This chapter examines the task of assessing the value of the offer and looks at how to capture this value. Price setting is one of the most complicated of all the marketing activities. In practice, it is best described as art based on science. The science of pricing focuses on using research to understand the price sensitivity of individuals and the price elasticity of markets. The art of pricing focuses on setting sensible pricing objectives, understanding the interactions of price with other elements of the marketing mix, and predicting competitor reactions to price changes. Linking both art and science is the management of pricing, the management of pricing involves working with the organization's accountants to understand costs and contribution margins, developing a pricing policy, and making sure that the key performance indicators (KPIs) of people who have authority for the organization's prices are aligned with the organization's pricing objectives.Less
This chapter examines the task of assessing the value of the offer and looks at how to capture this value. Price setting is one of the most complicated of all the marketing activities. In practice, it is best described as art based on science. The science of pricing focuses on using research to understand the price sensitivity of individuals and the price elasticity of markets. The art of pricing focuses on setting sensible pricing objectives, understanding the interactions of price with other elements of the marketing mix, and predicting competitor reactions to price changes. Linking both art and science is the management of pricing, the management of pricing involves working with the organization's accountants to understand costs and contribution margins, developing a pricing policy, and making sure that the key performance indicators (KPIs) of people who have authority for the organization's prices are aligned with the organization's pricing objectives.
Grahame R. Dowling
- Published in print:
- 2004
- Published Online:
- October 2011
- ISBN:
- 9780199269617
- eISBN:
- 9780191699429
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269617.003.0008
- Subject:
- Business and Management, Marketing
This chapter examines the issue of customer acquisition. It explores how an organization makes an offer to its target consumers that will entice them to buy and keep buying. Part A of this chapter ...
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This chapter examines the issue of customer acquisition. It explores how an organization makes an offer to its target consumers that will entice them to buy and keep buying. Part A of this chapter focuses on value creation, Part B on value communication, and Part C on the delivery of customer value. By focusing and integrating their brand communications, organizations find that the cost-effectiveness of communication is improved relative to a scattergun approach. The design of a distribution channel needs to generate consumer demand and create time and place utility for target consumers. The key marketing function for the distribution channel is to deliver the value offered, and in the process to support the customer value proposition (CVP) and brand position.Less
This chapter examines the issue of customer acquisition. It explores how an organization makes an offer to its target consumers that will entice them to buy and keep buying. Part A of this chapter focuses on value creation, Part B on value communication, and Part C on the delivery of customer value. By focusing and integrating their brand communications, organizations find that the cost-effectiveness of communication is improved relative to a scattergun approach. The design of a distribution channel needs to generate consumer demand and create time and place utility for target consumers. The key marketing function for the distribution channel is to deliver the value offered, and in the process to support the customer value proposition (CVP) and brand position.
Jordi Canals
- Published in print:
- 1999
- Published Online:
- October 2011
- ISBN:
- 9780198296676
- eISBN:
- 9780191685262
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296676.003.0006
- Subject:
- Business and Management, Finance, Accounting, and Banking, Strategy
This chapter discusses the business concept: the firm's view about how to deliver customer value, the specific organization of the firm's activities, and the choices it has to make in order to ...
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This chapter discusses the business concept: the firm's view about how to deliver customer value, the specific organization of the firm's activities, and the choices it has to make in order to achieve such objectives. It springs from a vision that the firm and its managers have about the future needs of its customers, the evolution of rivalry, and the role of the firm in the industry. The notion of the business concept that is presented in this chapter shares some elements with other strategy concepts, although it has some unique features. Creating a new business concept often implies being able to offer new products or services. And creating a new business concept may have another important dimension: organizing the company's activities according to different patterns from those followed by other companies. This chapter presents different dimensions of the capability that a company and its people have to create a different, better business concept. It is also shown in this chapter that the development of a business concept requires reconsidering certain basic issues about the company.Less
This chapter discusses the business concept: the firm's view about how to deliver customer value, the specific organization of the firm's activities, and the choices it has to make in order to achieve such objectives. It springs from a vision that the firm and its managers have about the future needs of its customers, the evolution of rivalry, and the role of the firm in the industry. The notion of the business concept that is presented in this chapter shares some elements with other strategy concepts, although it has some unique features. Creating a new business concept often implies being able to offer new products or services. And creating a new business concept may have another important dimension: organizing the company's activities according to different patterns from those followed by other companies. This chapter presents different dimensions of the capability that a company and its people have to create a different, better business concept. It is also shown in this chapter that the development of a business concept requires reconsidering certain basic issues about the company.
Grahame R. Dowling
- Published in print:
- 2004
- Published Online:
- October 2011
- ISBN:
- 9780199269617
- eISBN:
- 9780191699429
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199269617.003.0007
- Subject:
- Business and Management, Marketing
This chapter examines brands, often one of the organization's key strategic marketing assets. The management of brands is of fundamental concern to marketers. For sellers, they are a means of legally ...
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This chapter examines brands, often one of the organization's key strategic marketing assets. The management of brands is of fundamental concern to marketers. For sellers, they are a means of legally protecting their products and services. For consumers, brands help to identify the maker of the product and know who should be held accountable for any problems. Parts A and B of this chapter examine three key issues about brands: brand position and positioning — where positioning is the management process that leads to a brand's position; branding — the identity and architecture of brands; and brand equity — the value added to a product or service that is endowed by its brand name.Less
This chapter examines brands, often one of the organization's key strategic marketing assets. The management of brands is of fundamental concern to marketers. For sellers, they are a means of legally protecting their products and services. For consumers, brands help to identify the maker of the product and know who should be held accountable for any problems. Parts A and B of this chapter examine three key issues about brands: brand position and positioning — where positioning is the management process that leads to a brand's position; branding — the identity and architecture of brands; and brand equity — the value added to a product or service that is endowed by its brand name.
Elie ofek, Eitan Muller, and Barak Libai
- Published in print:
- 2016
- Published Online:
- May 2017
- ISBN:
- 9780226618296
- eISBN:
- 9780226394145
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226394145.003.0003
- Subject:
- Economics and Finance, Financial Economics
This chapter begins by establishing that each first-time adoption of an innovation can be thought of as the start of a customer-firm relationship in which the adopter generates a stream of profits ...
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This chapter begins by establishing that each first-time adoption of an innovation can be thought of as the start of a customer-firm relationship in which the adopter generates a stream of profits for the firm. The financial value of this profit stream is termed the customer’s lifetime value. Four main elements drive customer lifetime value: the per-period profit margin, the retention rate, the discount factor, and the acquisition cost. Linking the number of new customers expected to adopt in a given time period, by using the basic diffusion model developed in chapter 1, with the future profits each acquired customer is expected to generate, by using the customer lifetime value model, yields the monetary value of all new customers adopting in that period. Conducting this analysis for every period over the desired time horizon, applying financial discounting to future contributions, and summing the results yields the innovation equity of a new product or service. Innovation equity, the book’s central framework, is thus a monetary assessment of the total future cash flows—across customers and time—associated with the diffusion of an innovation. The chapter concludes with an example showing how to evaluate the innovation equity of XM Satellite Radio.Less
This chapter begins by establishing that each first-time adoption of an innovation can be thought of as the start of a customer-firm relationship in which the adopter generates a stream of profits for the firm. The financial value of this profit stream is termed the customer’s lifetime value. Four main elements drive customer lifetime value: the per-period profit margin, the retention rate, the discount factor, and the acquisition cost. Linking the number of new customers expected to adopt in a given time period, by using the basic diffusion model developed in chapter 1, with the future profits each acquired customer is expected to generate, by using the customer lifetime value model, yields the monetary value of all new customers adopting in that period. Conducting this analysis for every period over the desired time horizon, applying financial discounting to future contributions, and summing the results yields the innovation equity of a new product or service. Innovation equity, the book’s central framework, is thus a monetary assessment of the total future cash flows—across customers and time—associated with the diffusion of an innovation. The chapter concludes with an example showing how to evaluate the innovation equity of XM Satellite Radio.
Peter Grindrod CBE
- Published in print:
- 2014
- Published Online:
- March 2015
- ISBN:
- 9780198725091
- eISBN:
- 9780191792526
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198725091.003.0008
- Subject:
- Mathematics, Analysis, Probability / Statistics
This chapter considers Markov models for customer behavioural change and hence customer value change based on longitudinal customer data. It considers the use of genetic algorithms in calibrating ...
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This chapter considers Markov models for customer behavioural change and hence customer value change based on longitudinal customer data. It considers the use of genetic algorithms in calibrating such models. It presents applications to a supermarket chain, mobile phone company, and to an online grocery.Less
This chapter considers Markov models for customer behavioural change and hence customer value change based on longitudinal customer data. It considers the use of genetic algorithms in calibrating such models. It presents applications to a supermarket chain, mobile phone company, and to an online grocery.
Tony Douglas and Kenneth Le Meunier-FitzHugh
- Published in print:
- 2016
- Published Online:
- August 2016
- ISBN:
- 9780198706632
- eISBN:
- 9780191826061
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198706632.003.0003
- Subject:
- Business and Management, Strategy, Marketing
The chapter considers the sales organization’s responses to increasing customer demands. Proactive customer management is required throughout the customer’s interaction with the organization. Keeping ...
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The chapter considers the sales organization’s responses to increasing customer demands. Proactive customer management is required throughout the customer’s interaction with the organization. Keeping existing customers is arguably more profitable and less costly than finding and developing new ones, but the right customers to invest in have to be identified and they need constant attention to grow. An allied topic is customer relationship management (CRM) and its central role in creating value for customers, as sellers move away from transactional selling to longer-term, more profitable relationships with buyers. Sales are creating closer relationships with intermediaries and we discuss the nature of relationship quality and how it can lead to customer trust, commitment, and loyalty. However, not all customers require relationships with their suppliers and we look at the importance of customer portfolio management.Less
The chapter considers the sales organization’s responses to increasing customer demands. Proactive customer management is required throughout the customer’s interaction with the organization. Keeping existing customers is arguably more profitable and less costly than finding and developing new ones, but the right customers to invest in have to be identified and they need constant attention to grow. An allied topic is customer relationship management (CRM) and its central role in creating value for customers, as sellers move away from transactional selling to longer-term, more profitable relationships with buyers. Sales are creating closer relationships with intermediaries and we discuss the nature of relationship quality and how it can lead to customer trust, commitment, and loyalty. However, not all customers require relationships with their suppliers and we look at the importance of customer portfolio management.
Elie Ofek, Eitan Muller, and Barak Libai
- Published in print:
- 2016
- Published Online:
- May 2017
- ISBN:
- 9780226618296
- eISBN:
- 9780226394145
- Item type:
- book
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226394145.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book bridges the gap between what academics know and what innovation stakeholders— from managers, to investors, to analysts, to consumers—need to know about how new products and services are ...
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This book bridges the gap between what academics know and what innovation stakeholders— from managers, to investors, to analysts, to consumers—need to know about how new products and services are expected to perform in the marketplace. The book develops a compelling framework that connects the rich academic knowledge on innovation diffusion with that on customer relationship management, thereby marrying our understanding of how consumers adopt innovations with how firms effectively acquire, serve, and retain customers. The result, aptly called innovation equity, is a lens through which to view the commercial potential of innovations. It is a powerful vehicle for placing a dollar value on new products and services that are about to be, or that have recently been, launched. The book further shows how the framework can be used to evaluate the implications of marketing actions, consumer heterogeneity, competition, successive technology generations, and globalization on innovation equity assessments. The exposition is replete with vivid examples from a wide array of domains (such as video games, wireless phone services, computers, tablets, satellite radio, electric vehicles, cloud-based software, pharmaceuticals, and more), which demonstrate how the topics covered apply to real-world situations. A set of hands-on tools for implementing the various topics is provided and, for the interested reader, a companion website features concrete templates that can be adapted to any context. The writing style is highly engaging and the core messages are conveyed using simple, easy-to-grasp language and terminology.Less
This book bridges the gap between what academics know and what innovation stakeholders— from managers, to investors, to analysts, to consumers—need to know about how new products and services are expected to perform in the marketplace. The book develops a compelling framework that connects the rich academic knowledge on innovation diffusion with that on customer relationship management, thereby marrying our understanding of how consumers adopt innovations with how firms effectively acquire, serve, and retain customers. The result, aptly called innovation equity, is a lens through which to view the commercial potential of innovations. It is a powerful vehicle for placing a dollar value on new products and services that are about to be, or that have recently been, launched. The book further shows how the framework can be used to evaluate the implications of marketing actions, consumer heterogeneity, competition, successive technology generations, and globalization on innovation equity assessments. The exposition is replete with vivid examples from a wide array of domains (such as video games, wireless phone services, computers, tablets, satellite radio, electric vehicles, cloud-based software, pharmaceuticals, and more), which demonstrate how the topics covered apply to real-world situations. A set of hands-on tools for implementing the various topics is provided and, for the interested reader, a companion website features concrete templates that can be adapted to any context. The writing style is highly engaging and the core messages are conveyed using simple, easy-to-grasp language and terminology.
Elie ofek, Eitan Muller, and Barak Libai
- Published in print:
- 2016
- Published Online:
- May 2017
- ISBN:
- 9780226618296
- eISBN:
- 9780226394145
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226394145.003.0001
- Subject:
- Economics and Finance, Financial Economics
The introduction provides an overview of the book’s content and gives the reader a roadmap of what he or she can expect to gain from its various chapters. It starts by discussing a few examples, ...
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The introduction provides an overview of the book’s content and gives the reader a roadmap of what he or she can expect to gain from its various chapters. It starts by discussing a few examples, Google’s Glass and Apple’s Watch, in order to motivate the need for better models to forecast the commercial potential of innovations. The introduction then explains the genesis of the book and what experiences prompted the three authors to write it. The central framework developed in the book, the innovation equity framework, is described briefly. In particular, the key idea of combining the rich academic knowledge on the pace of consumer adoption of innovations with firms’ efforts to acquire, manage, and retain customers is conveyed. Finally, the various themes covered in each chapter are outlined.Less
The introduction provides an overview of the book’s content and gives the reader a roadmap of what he or she can expect to gain from its various chapters. It starts by discussing a few examples, Google’s Glass and Apple’s Watch, in order to motivate the need for better models to forecast the commercial potential of innovations. The introduction then explains the genesis of the book and what experiences prompted the three authors to write it. The central framework developed in the book, the innovation equity framework, is described briefly. In particular, the key idea of combining the rich academic knowledge on the pace of consumer adoption of innovations with firms’ efforts to acquire, manage, and retain customers is conveyed. Finally, the various themes covered in each chapter are outlined.
