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Definition
| Creating, communicating and delivering value to the target market at a profit. |
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| Goods, services, or ideas that satisfy customer needs. |
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| Decisions and actions that establish pricing objectives and policies and set product prices: margins, pricing, discounts, allowances, VALUE. |
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| The ready, convienant, and timely availability of products; channel choice; inventory, distribution, warehousing, order processing, materials handling, transportation. |
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| Activities that inform customers about the organization and its products; advertising, personal selling, public relations, sales promotion, word-of-mouth. |
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| Manufacturer Suggested Retail Price; the end price to the consumer. |
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| Selling Price (aka Revenue)-Variable Cost |
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| American Customer Satisfaction Index; show that customer satisfaction is a leading indicator of company financial performace. |
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| Satisfaction Formula; Definition |
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| Perception-Expectation; Consistent quality and continuous improvement; leading indicator (predictor) of operating performance. |
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| A commonly repeated word or phrase. |
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| Increased customer satisfaction leads to increased customer retention which leads to increased sales and/or revenue, which leads to increased profit and shareholder wealth. |
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0-20 Very Dissatisfied; 20-40 Dissatisfied; 40-60 Somewhat Satisfied; 60-80 Satisfied; 80-100 Very Satisfied;
Customer satisfaction index is a forecast of future revenues and profits; An index number, however, is just a benchmark. |
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Definition
| Provides a wide-angle view of customer satisfaction and allows managers to see more completely the opportunities for improvement. |
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| New Customers vs. Retained Customers |
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Definition
| It is 5 times more expensive to acquire a new customer than to keep an existing customer. |
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Definition
| Retained customers+ Lost customers |
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| Percentage Change Formula |
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Definition
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Definition
| The discounted sum of all future customer revenue streams minus product and servicing costs and remarketing costs; the expected NPV of the cash flows from a customer relationship. |
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| Increases expontentially with increases in Customer Retention. |
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| High performance in all 5 aspects of customer loyalty. |
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Definition
| Great customers that buy often but score lower on purchase amount, product reference, and customer recommendation. |
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Definition
| Have a long customer history and average purchase amount but would leave if they could, as they are dissatisfied captive customers. |
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Definition
| Score low on all aspects of customer loyalty as they do not yete have the customer history to access their customer loyalty. |
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Definition
| Score low on all 5 aspects of customer loyalty. |
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| Customer Value Strategies |
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Definition
| Attract new customer to grow market share--grow market demand by bringing more customers into the market and enter new markets to create new sources of customer volume. |
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| (4) Market Growth Strategies |
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Definition
| Market Penetration; Market Development; Product Development; Diversification |
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Definition
| (Current Products; Current Markets) Aggressive marketing mix; Increase Customer usage rates; Attract competitor customers |
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| (Current Products; New Markets) Appeals to new markets; New Geographic; New users. |
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| (New Products; New Products) Add/modify product features; Create several quality levels. |
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| (New Products; New Markets) Concentric: marketing synergies; Horizontal: new products to same market, but unrelated; Conglomerate: no relationship. |
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Definition
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Definition
| Market Demand*SOM %*units/time frame |
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Definition
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| Gross Margin/Profit Formula |
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Definition
| Customer Volume*Margin/unit |
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| Net Marketing Contribution Formula |
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Definition
| Gross Profit-Marketing Expenses; helps to look at a product alone to decide whether to keep or loose the product. |
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| Net Profit/Income Formula |
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Definition
| NMC-Operating Expenses (fixed costs) |
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Term
| Assets affected by Marketing Strategies |
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Definition
| Accounts Receivable; Investment in Inventory; Investment in Fixed Assets |
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| Accounts Receivable Formula; Definition |
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Definition
| Customer service affects payment speed; Customer volume*revenue per customer*% days outstanding |
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| Inventory Formula; Definition |
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Definition
| Market demand affects inventory levels; channel choices determine who stores inventory; customer volume*VC per customer*% days in inventory |
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Definition
| Correlated to sales volume, thus marketin decisions impacts assets and ROA |
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| (2) Options for Profitability Measures |
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Definition
| Increase NMC; Reduce operating expenses. These choices impact ROS and net profit or sales |
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Definition
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| Total Variable Costs Formula |
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Definition
| Unit Variable Costs * Units Sold |
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| Unit Contribution Formula |
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Definition
| Total Revenues - Total Variable Costs |
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| Selling Price per unit* units sold |
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| Where Total Costs = Total Revenues |
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Definition
| dollar break-even/unit price |
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| Dollar break even formula |
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Definition
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Term
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Definition
| internal performance metrics |
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Definition
| external performance metrics |
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| Marketing return on investment (ROI) |
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Definition
| NMC/Marketing sales and expenses * 100% |
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Term
| Marketing return on sales (ROS) |
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Definition
| Tells what portion of sales are marketing profits--a benchmark. NMC/Sales * 100% |
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| Sign that a product is profitable |
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Definition
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