Determinants of Customer Delivered Value Image value Personnel

Determinants of Customer Delivered Value Image value Personnel value Services value Total customer value Product value Customer delivered value Monetary cost Time cost Energy cost Psychic cost © 2000 Prentice Hall Total customer cost

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. © 2000 Prentice Hall

High Performance Business Set strategies to satisfy key. . . By improving critical business. . . and aligning. . . © 2000 Prentice Hall Stakeholders Processes Resources Organization

The Generic Value Chain Market. Out. Serving Inbound Operabound ice Logistics tions and Logistics sales © 2000 Prentice Hall Primary Activities in Procurement in Technology Development Ma rg Human resource management rg Ma Support Activities Firm infrastructure

Levi Strauss’ Value-Delivery Network Order Du Pont (Fibers) Order Milliken (Fabric) Delivery Order Levi’s (Apparel) Delivery Order Sears (Retail) Delivery Customer Delivery Competition is between networks, not companies. The winner is the company with the better network. © 2000 Prentice Hall

Satisfied Customers: ä Are loyal longer ä Buy more (new products & upgrades) ä Spread favorable word-of-mouth ä Are more brand loyal (less price sensitive) ä Offer feedback ä Reduce transaction costs © 2000 Prentice Hall

Levels of Relationship Marketing High margin Medium margin Low margin Many customers/ distributors Accountable Reactive Basic or reactive Medium number of customers/ distributors Proactive Accountable Reactive Few customers/ distributors Partnership Proactive Accountable © 2000 Prentice Hall

Customer Development Suspects First-time Prospects customers Disqualified prospects © 2000 Prentice Hall Repeat customers Clients Inactive or ex-customers Advocates Partners

Customer/Product Profitability Analysis Customers C 1 P r o d u c t s © 2000 Prentice Hall P 1 P 2 P 3 P 4 + + + High profit customer C 2 C 3 + + - - Mixed-bag customer Losing customer Highly profitable product Profitable product Losing product Mixed-bag product

The Profit Triangle ns Competitive advantage Va tio ra lue pe cr lo ea na tio er n Int © 2000 Prentice Hall Profit

Quality #1 © 2000 Prentice Hall ä Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.

Review ä Define value & satisfaction - understand how to deliver them ä The nature of high-performance businesses ä How to attract & retain customers ä Improving customer profitability ä Total quality management © 2000 Prentice Hall