customer satisfaction and value in marketing

Customer Satisfaction and Value In Marketing

Presenter: Ahmad Al-JarahCEO of VW

PhD Candidate Business management

Instructor : Dr. John OlotewoCEO of the Class

Advanced Marketing TheoryGirne American University

Customer Satisfaction

When we hear or see the word Customer Satisfaction, what comes to our mind?

A- My boss , support/ Marketing dept and the organization is responsible for that, I am NOT.

B- NO, only I am responsible for my customer, other are not concerned.

C- Customer satisfaction is only in service industries NOT in IT industries

D- Customer satisfaction is to complete the work of customer and he will be satisfied

When we hear or see the word Customer Satisfaction, what comes to our mind?


“A measure of HOW product and services supplied by company meet or surpass customer expectation”

If customer expectation are met = customer satisfaction results

Customer Satisfaction:

“Customer satisfaction is getting what you want by giving others what they wants”

C. Satisfaction: The Formula for success

Customer Satisfaction= Perception - Expectation

Expectation was 15 M Perception was 30 M Customer is DELIGHTED

Expectation was 40 M Perception was 30 M Customer is DISAPPOINTED

Do Satisfied Customers Really Pay More?

A Study of the Relationship Between Customer Satisfaction and Willingness to Pay

Christian Hombuurg, Nicole Koshate, & Wayne D.HoyerJournal of Marketing

April 2005

First Article


Previous Studies:Customer Satisfaction, Productivity, and Profitability: Difference between good and servicesEugene W. Anderson . Claes Fornell . Roland T. Rust - 1997

The Antecedents and Consequences of Customer Satisfaction for Firms,Anderson, Mary W. Sullivan- 1993

The Impact of Personality and Emotion on Post purchase Processes.Mooradian and Olver- 1997.

Do Satisfied Customers Really Pay More?The Importance of the Study:

The price related outcomes of customer satisfaction and willingness to pay have often been neglected in previous research

According to the researcher knowledge, only one study ( Anderson 1996) focused on the link between CS and price tolerance

Do Satisfied Customers Really Pay More?The Research Questions:

• Whether the is a positive relationship between CS and WTP at the individual level.First

• Determine whether the relationship ( if it exists) is essentially linear or whether there are significant nonlinear effects

Second

• How the relationship between CS and WTP changes over timeThird

Customer SatisfactionHypothesis of the Study:

•The price that customers are willing to pay increases with the level of CS.H1

•The relationship between CS and the rice that customers are willing to pay follows an inverse S-shaped function. Which is first concave and the convexH2

•The relationship between CS and the rice that customers are willing to pay follows an inverse S-shaped function. Which is first convex and then concave

H2alt

•The more the CS judgment moves from transaction specific to cumulative, the stronger is the relationship between CS and WTP

H3


WTP0

CS0Low CS High CS

WTP

WTP0

CS0Low CS High CS

WTP

- Decrease return at the lower end- Flat in the middle- Increasing returns at higher end

- increasing return at the lower end- Flat in the middle- Decreasing returns at higher end

Inverse S-Shaped Function S-Shaped Function


•examines how different levels of CS increase the WTP (H1, H2 and H2alt) in a lab experiment.Study

1

•Extends the research to a real consumption experience and captures the dynamic aspects ( cumulative satisfaction) of the situation (H3)Study 2

Do Satisfied Customers Really Pay More?Results of the Study:

Study 1• The relationship between CS and WTP is statistically significant• The findings support H2, the function is concave for low satisfaction levels and convex for high

satisfaction levels( inverse S-shaped faction)

Study 2• There is a positive and statistically between CS and WTP• The result of study 2 contradict H2alt• The results predicts as the CS judgment moves from T.S to cumulative satisfaction the impact on

WTP is strengthened

Do Satisfied Customers Really Pay More?Suggests of the Study:

•The customer’s satisfaction level could influence a company’s pricing strategy.

1•Companies could charge higher prices to highly satisfied

customers2

•The approaches to the measurement and enhancement of CS should focus on cumulative satisfaction rather than on transaction specific satisfaction

3


Discussion……

Customer ValueThe Next Source for Competitive Advantage

Robert B. WoodruffJournal of the Academy of Marketing Science

Second Article

Customer Value

Purpose of the Article:“Discussing the operational capabilities for organizations

wanting to improve at competing on superior C.V.D.”

Customer ValueThe structure of the Article:

•Concept of customer valueSection 1

•What and How the organizations should learn about customer value.Section 2

•Translating customer learning into customer value deliverySection 3

•Discussing the implications of CV for management practice.Section 4

Customer ValueCustomer value = perceived benefits – perceived cost

Customer Value: Type of Value Functional Value• Laptop ( Sony)

Social Value• Rolex

Emotional Value• Apple

Epistemic Value• Tablet

Conditional Value • Halloween

Customer Value

Customer’s goals and purposes

Desired consequences in use situations

Desired product attributes and attribute performances

Goal-based satisfaction

Consequence-based satisfaction

Attribute based satisfaction

Desired customer value Customer satisfaction with received value

Customer Value Hierarchy Model

Customer ValueThe relationship between customer value and customer satisfaction

goals

consequences

attributes

Desired customer value:

Perceptions of received value on:

ConsequencesAttributes

Comparison standard(s) for : Consequences

Attributes

Disconfirmation on : consequences

Attributes

Overall customer

satisfaction feelings

Customer Value

Discussion……

Case Study

Our NameVolkswagen

Volks = People

Wagen= Car

People’s Car

Some facts

•The for the VW Beetle was inspired by Adolph Hitler.

•The first produced car by our company is Beetle (Käfer), 1933 – 1938

•Our thee most famous products ( VW Passat, VW Beetle, VW Golf) featured in the list of top 10 selling care of all the time

Some facts:Did you know that VW makes the fastest car on Earth?!

The Bugatti Veyron

Our Legend careDo you know how long did VW produce the legendary Beetle?

•From 1938 up to 2003

•21,529,464 cars produced

OUR Brands

Our Product ( customer) value

Loyalty…..

Design…


VW CitiZen Hybrid VW's High-Tech Parking Garage

Innovation…


The Case StudyThe Problem:

Volkswagen violating the Clean Air Act by equipping half a million “ Clean Diesel” vehicles with software that would lower the cars’ emissions only when they were undergoing emissions testing

•VW pay the fines which is about $ 7.3 billion The Worse Scenario

•The Vehicles themselves are still safe to drive and no one’s dying because of this.

•Our compotators had more worse issues like GM and Toyota and put their customer in physical dangers

•Yes we lost in the American market but we are still strong in our hug market, China.

•The Germany government is one of our stakeholder! •Our there brands does NOT effected by this issue

The Best Scenario

The Case Study

Do you think company like VW had a diversity of product with loyal customers

will be effected from this problem?

The Case Study

Discussion

VW

Consumer

Competitors

Marketing Plan

Thanks

شكرا

Cпасибо

Iyan

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