Competitive Strategies:

1
Chapter 18
PRINCIPLES OF MARKETING

• Competitive Strategies
• Building Lasting Customer
• Relationships

2
Defining Customer Value
3
Customer Satisfaction

• Customer Satisfaction

Customer Satisfaction Results When a Companys
Performance Has Fulfilled a Buyers Expectations.
Performance Exceeds Expectations- Customer is
Delighted
Buyers Expectations Are Based On Customers
Past Buying Experiences Opinions of
Friends Associates Marketer/ Competitor
Information Promises
Products Actual Performance
Performance Below Expectations - Customer is
Dissatisfied
4
Total Customer Satisfaction

• Highly satisfied (delighted) customers produce
  benefits
• They are less price sensitive,
• They remain customers longer,
• They talk favorably about the company and
  products to others.
• Delighted customers have emotional and rational
  preferences for products, and this creates high
  customer loyalty.
• Therefore, the purpose of Marketing is to
  generate customer value profitably.

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The Need for Customer Retention
The Key to Customer Retention is Superior
Customer Value and Satisfaction. Companies Must
Consider
6
Building Customer Satisfaction and Loyalty by
Relationship Marketing
Relationship Marketing Involves Creating,
Maintaining, and Enhancing Strong, Long-Term
Relationships with Customers and Other
Stakeholders. Methods for Building
Relationships Include Offering
Financial Benefits
Social Benefits
Structural Ties
7
Value Chain
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Support Activities
Margin
Outbound Logistics
Marketing and Sales
Operations
Inbound Logistics
Service
Primary Activities
8
Customer Value-Delivery Network
Customer
Retailer
Delivery
Order
Producer
Delivery
Order
Vendor
Delivery
Order
Raw Material Supplier
Delivery
Order
Order
Delivery
9
Total Quality Marketing
Quality is in the Eyes of the Customer
Necessary But May Not Be Sufficient
Pursuing a Total Quality Marketing Strategy
Does Not Cost More
Every Company Activity
Total Employee Commitment
Quantum Leaps
High Quality Partners
Continuous Improvement
Cannot Save Poor Product
10
Identifying Competitors
Competitor Analysis
Assessing Competitors
Determining Objectives
Identifying Strategies
Assessing Strengths and Weaknesses
Estimating Reaction Patterns
Selecting Competitors to Attack and to Avoid
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Basic Competitive Strategies
Developing Competitive Marketing Strategies
Overall Cost Leadership
Focus
Differentiation
Middle of the Road
12
Value Disciplines
Developing Additional Competitive Marketing
Strategies
Operational Excellence
Customer Intimacy
Product Leadership
13
Competitive Positions
Market Leader Firm with the Largest Market Share
Competitive Positions
Competitive Strategies
Expand Total Market Protect Market Share Expand
Market Share
Market Challenger Runner-Up Firms that Fight Hard
to Increase Market Share
Market Followers Runner-Up Firms that Want to
Hold Their Share Without Rocking the Boat
Full Frontal Attack Indirect Attack
Follow Closely Follow at a Distance
Market Nichers Firms that Serve Small Segments
Not Being Pursued by Other Firms
By Customer, Market, Quality-Price,
Service Multiple Niching
14
Balancing Customer and Competitor Orientations