CRM - Presentation - Group 6 (13.12.24)_Final_TTT.pdf
- 1. GROUP - 6 MANAGING C U S T O M E R P E R C E I V E D V A L U E CHAPTER - 5 Date: 13 December 2024 Presented by Group (6), EMBA 20th Batch (Online)
- 2. Group (6) Members Lei Yee Soe EMBA II - 70 Lei Yee Soe EMBA II - 70 Tin Tin Thein EMBA II - 77 Tin Tin Thein EMBA II - 77 Thinn Moe Phyu EMBA II - 62 Thinn Moe Phyu EMBA II - 62 Soe Thura Nyein EMBA II - 57 Soe Thura Nyein EMBA II - 57 Kyaw Thura EMBA II - 80 Kyaw Thura EMBA II - 80 Thein Shwe EMBA II - 64 Thein Shwe EMBA II - 64 Nay Nwe Mra EMBA II - 48 Nay Nwe Mra EMBA II - 48 Khin Wah Wah Kyaw EMBA II - 32 Khin Wah Wah Kyaw EMBA II - 32 Nan Aye Aye Moe EMBA II - 42 Nan Aye Aye Moe EMBA II - 42 Phyo Myat Thu EMBA II - 78 Phyo Myat Thu EMBA II - 78
- 3. Contents 1. Introduction 2. Benefits Less Costs 3. Goal Achievement/Non-Achievement 4. Customer Experienced Value 5. Driving Excellence Through Innovation and Quality 6. The Value Preposition 7. Value from processes 8. The Company’s Operations – Choosing the Right Path 9. Customization in Shoe Manufacturing 10.Conclusion
- 4. Introduction 1/2 1) What is CPV: the customer's evaluation of the benefits received versus the costs incurred in acquiring a product or service. a central theme in understanding why customers choose one company over another and remain loyal. 2) Two Perspectives of Value: Value-in-Exchange: The transactional value of goods or services provided. Value-in-Use: The value experienced by customers during and after usage of a product or service. 3) Strategic Importance of CPV: By managing perceived value, companies can increase customer satisfaction, loyalty, and profitability. CPV guides the creation and delivery of superior value propositions tailored to customer needs. 4) Key Touchpoints: CPV spans across all interactions with the company, including advertising, customer support, sales, and product usage.
- 5. Company-supplied stimulus Noise Customer perceived value (CPV) Figure 5.1 Company-supplied stimulus, noise and customer perceived value • Convenience: Easy-to-navigate platform and mobile app for shopping anytime. • Trust: Authentic products, reliable delivery, and cash-on- delivery payment options. • Affordability: Competitive pricing, flash sales, and discounts. • Personalization: Recommendations and wish lists tailored to customer preferences. • Engagement: Marketing campaigns and loyalty programs that keep customers involved and incentivized. Introduction 2/2 • Creating Superior Customer Value (Accessibility, Ease of Use, Affordability) • Communicating Superior Customer Value (Effective Marketing, Trust Building) • Overcoming Noise (service quality, extensive agent network, brand reputation) • Building Relationship Stability and Development (loyalty, QR code usage) • Convenience: Seamless financial transactions via mobile. • Cost Efficiency: Cashback and discounts increase perceived value. • Trust: Strong brand reputation and robust security measures. • Customization: Language support and features tailored to local needs. • Innovation: Continuous updates and integration into everyday services.
- 6. To understand the concept of customer perceived value and its strategic implications. (Outcome of comprehension) To explore the differences between value-in-exchange and value-in-use. (open-ended inquiry) Objectives To analyze how the marketing mix (product, price, place, promotion) communicates and delivers CPV. (Logical breakdown and critical evaluation) To examine the role of a company's operations and how they influence CPV. (Close observation or inspection) To learn strategies for effectively delivering value to customers and maintaining competitive advantage. (Acquisition of knowledge or skill)
- 7. Benefits less costs The difference between the benefits and costs from the customer's view point. o Helps companies identify and align product features with customer needs. o Enables competitive analysis. Positive : Benefits > Costs Negative : Costs > Benefits Neutral : Benefits = Costs
- 8. Customer Perceived Benefits Functional Benefits : Relate to the capabilities and performance of products/services (e.g., an iPhone working flawlessly) Conditional Benefits : Refer to the context or situation (e.g., ice cream sales peaking in warmer months) Social Benefits : Improve social status or group association (e.g., buying an upmarket house) Emotional Benefits : Associated with emotional experiences (e.g., joy from a concert) Epistemic Benefits : Arouse feelings of curiosity and desire for knowledge (e.g., reading a book to understand CRM). Five Types of Benefits (Sheth’s Framework)
- 9. Customer Perceived Costs Time Costs : Time is a finite resource; convenience often valued (e.g., higher prices at service stations). Emotional Costs : Stress and frustration from purchasing decisions (e.g., reluctance to switch banks). Physical Costs : Physical effort required (e.g., traveling long distances). Perceived Risk: Risks related to performance, physical, financial, social, and psychological factors. Adaptation/ Switching Costs : Costs of reconfiguring existing assets (e.g., implementing a new finance package).
- 10. Goal Achievements / Non-Achievement When customers buy a product, address a need or a want, is a goal. What customers value can be looked at in two ways, • Achieving Goals : Customers see value in a product or service if it helps them achieve what they want or need (their goals) • Benefits Minus Costs: Customers also look at the value by comparing the benefits they get (like quality or convenience) with the costs they have to pay (like money, time, or effort). This perspective leads to view: • High Perceived Value: Goal Achievement (for eg - buying the desired iPhone the store has sufficient stock on hand for the customer to succeed in their purchase buying the desired iPhone). • Low Perceived Value: Goal Non-Achievement (for e.g – the store is by the time the customer enters the store - out-of-stock disappointment). • Neutral Perceived Value: Partial Goal Achievement.
- 11. Other Customer Perceived Value Conceptualizations • Value as low price • Value as delivery of what the customer wants • Value as the quality:price ratio • Value as the give: get ratio (what customers receive vs. sacrifices made) • Functional Value: Price-savings, service excellence, time-savings, choice • Hedonic or Affective Value: Pleasure, fun, entertainment, interaction, escape Functional vs. Hedonic Value Zeithaml identified four different forms of customer perceived value:
- 12. Holbrook's Typology of Consumer Value Holbrook argues that all eight types of value tend to occur together to varying degrees in any given consumption experience. • It’s important for a company to adopt an interpretation that aligns with its Customer Relationship Management (CRM) strategy. • Aligning the concept with the CRM strategy helps the company: • Define what value means to their target customers. • Develop strategies to meet customer needs and expectations effectively. These three dimensions give rise to eight types of consumer-experienced value:
- 13. Customer Experienced Value – When Do Customers Experience Value? Customer perceived value = External stimulus + Customer perception. Two fundamental ways to experience value: 1. Value-in-exchange 2. Value-in-use
- 14. Value-in-Exchange Trading one form of value for another (e.g., money for a product or bartering). Focuses on the transaction as the moment of realized value. Emphasizes product features/attributes as key to customer perceived value. Encourages a short-term perspective (transactional focus).
- 15. Value-in-Use Value is realized when customers use, consume, or interact with a product. Goods have no value until utilized by customers. Focuses on benefits customers gain, not what producers provide. Recognizes CX throughout the entire customer journey. Acknowledges the dynamic nature of context and customer perceptions.
- 16. Customer Experienced Value Combines value-in-exchange and value-in-use for a holistic view. Example: o Buying a discounted TV (value-in-exchange). o Using the TV's features (value-in-use). o Selling the TV later (value-in-exchange). These interactions define customer-experienced value.
- 17. Driving Excellence Through Innovation and Quality •Product/Service Innovation •Incremental Benefits •Product-Service Bundling •Service Quality •Service Quality Theories Nan Aye Aye Moe
- 18. Product/Service Innovation • Product/Service Innovation: – Drives differentiation and customer loyalty. – Examples: Cutting-edge features or tech-driven services. • Incremental Benefits: – Continuous small improvements lead to sustained value. – Example: Regular updates in subscription services (e.g., Netflix). Nan Aye Aye Moe
- 19. Product-service bundling •Product-Service Bundling: •Integrating products and services for convenience and value. •Example: Smartphones with complimentary support plans. •Service Quality: •Key dimensions: Reliability, Responsiveness, Empathy, Assurance, Tangibles (SERVQUAL). •Drives customer loyalty and retention. Nan Aye Aye Moe
- 20. Service Quality and Service Quality Theories •Theories: •Grönroos Model: Functional and technical quality. •SERVQUAL: Gap model for assessing service quality. •Practical Implications: •Focus on continuous improvement, bundling strategies, and superior service design. •Call to Action: Embrace innovation and quality to thrive in competitive markets. Nan Aye Aye Moe
- 21. Grönroos Model Nan Aye Aye Moe
- 22. SERVQUAL Nan Aye Aye Moe
- 23. The Value Preposition A value proposition is a statement that explains how a product or service can help a customer and why it's the best choice over competitors. Key Components of a Value Proposition • Target Market • Problem • Unique Solution • Benefits • Differentiation
- 24. The role of the brand 1.What is a Brand? 1. A unique name, design, or symbol that differentiates products from competitors. 2. Conveys the company’s value proposition. 2.Why Are Brands Important? 1. Reduce Risks & Costs: Help customers identify quality and make confident decisions. 2. Assurance of Experience: Offer a consistent, reliable customer experience (e.g., Virgin for service excellence, Apple for innovation). 3.How Do Brands Build Perception? 1. Through customer experiences, word-of-mouth, social media, and marketing communication. 2. Brands shape expectations and perceptions in customers’ minds. 4.Key Benefits of a Strong Brand 1. Simplifies decision-making for customers. 2. Differentiates the company in a competitive market. 3. Creates memorable associations (e.g., Microsoft, Google, Hyundai).
- 25. The role of the brand Conclusion Brands are powerful tools that communicate value, foster trust, and influence customer decisions, ensuring loyalty and market success.
- 26. The Marketing Mix 1.What is the Marketing Mix? 1. A strategic framework to analyze and deliver value to customers. 2. Originated in the 1960s with 4Ps and later expanded to 7Ps for services. 2.The 4Ps Framework (Tangible Products) 1. Product: What the company offers. 2. Price: The cost customers pay. 3. Promotion: How the company communicates with its audience. 4. Place: Distribution channels to deliver the product. 3.The Expanded 7Ps (Services) 1. People: Employees and their impact on customer experience. 2. Physical Evidence: Tangible elements supporting the service (e.g., store layout, branding). 3. Process: Systems and workflows ensuring consistent delivery. 4. Why is the Marketing Mix Important? 1. Each element is a lever that shapes customer perception and behavior. 2. Acts as a signal for the company’s value proposition, creating alignment with customer expectations.
- 27. Key Takeaway The marketing mix enables businesses to align their offerings with customer needs, ensuring a strong, consistent value proposition for products and services.
- 28. Value from processes is set of inter-related activities performed by people and/or technology to achieve outcome. Every step in the customer journey, from initial interaction to post-purchase support. Processes are more than simply workflow; they use and deploy resources and assets that help firms compete more effectively and create more value for both customers and company. Xerox has identified 14 key domains where business processes are important, as Table. Many impact CX or value perceptions, and encompass customer engagement, market management, product maintenance, and product design and engineering processes.
- 29. Process innovation Process innovation can significantly enhance customer-experienced value. eg, First Direct started out as telephone bank with no branch network, with customer service originating from several call centres. First Direct now offers banking through other channels – online and app – has developed relationships with non-bank service providers such as Apple Pay, Android Pay and Samsung Pay. The bank’s customer satisfaction ratings have been consistently higher than competitors who have branch operations.
- 30. Value from People: The company’s individuals and teams who interact with customers before, during, after purchase. Major source of customer perceived value, especially in professional services such as counselling, consulting & coaching. More important job in CRM is the customer contact role, CM boundary-spanning role, between organization & its external customers. Two fundamental roles information management and relationship management. What are customer’s requirements, expectations, and preferences? Collect. > CR
- 31. Value from Physical evidence Especially important for service companies with service-heavy offerings. Physical evidence are tangible facilities, equipment, and materials that companies use to communicate value to customers. Physical evidence includes a company’s premises, and their internal and external environments, print materials, websites, apps, corporate uniforms, and vehicle livery.
- 32. The Company’s Operations – Choosing the Right Path Value Proposition • Represents the customer promise and sets expectations through the company’s marketing mix. • Delivering on this promise requires alignment between the company’s capabilities and the value proposition.
- 33. Three Approaches for Value Creation Operational Excellence: - Focus on efficiency, low costs, and reliability. - Examples: Walmart, McDonald’s, Toyota, and Amazon. - Characteristics: Lean operations, efficient supply chains, quality control, and convenience. Product Leadership: - Offers superior products, services, or experiences. - Emphasizes continuous innovation and high R&D investment. - Examples: Apple, BMW, 3M, and Singapore Airlines. - Culture of risk-taking and innovation. Customer Intimacy: - Adapts offers to individual customer needs, delivering personalized solutions. - Examples: Saatchi & Saatchi, McKinsey, and Nordstrom. - Requires deep customer insight and customization.
- 34. Customization as a Key Element: Definition: Tailors value propositions to specific customer requirements. Role of CRM Systems: • CRM systems gather and analyze customer data to enable precise customization. • Accurate CRM data increases the likelihood of offering value propositions that align with customer needs. Challenges: • High costs due to loss of economies of scale and the need for extensive design, development, and testing. • Requires potential reconfiguration of business processes and new suppliers.
- 35. Applicability of Customization • Common where the company has few, powerful customers. • Cost-benefit analysis is essential to determine feasibility. CRM’s Role • Helps assess the viability of customization by analyzing customer data and aligning operational capabilities with customer needs.
- 36. Key questions for CRM practitioners considering customization include: 1. Do customers want customised products and services? 2. What degree of customisation do customers desire? 3. Will customers pay a premium for customisation? 4. How do you take advantage of the disruptive nature of local manufacturing?
- 37. Customization in Shoe Manufacturing Customer Awareness and Value: - Consumers appreciate the benefits of customization, especially better fit, followed by style and functionality. - Many are willing to pay a premium, with women being particularly inclined. - Willingness to pay varies across brands and segments (e.g., Adidas charges a 50% premium for customized shoes). Cost Implications: - Customization doesn't always mean higher prices; dropping unnecessary features can reduce costs and prices.
- 38. Mass Customization: Definition: Tailoring value propositions at scale by balancing economies of scale with individual customization. Implementation: Flexible processes allow base components to be produced efficiently while offering variations to meet diverse customer needs. Forms: Ranges from simple "match-to-order" (matching customer needs with standard products) to "engineer-to-order" (co-designing unique solutions with customers).
- 40. Market Context: - Commoditization works when the company is the only supplier with many customers. - Customization is crucial when there are few customers or in highly competitive markets. - Mass customization is ideal where many customers and suppliers exist, combining cost advantages with differentiation. Cost Implications: - Customization doesn't always mean higher prices; dropping unnecessary features can reduce costs and prices. Technology and Advancements: - Technologies like 3D printing enable cost-effective and customer-specific production. - For example, aerospace uses 3D printing for lightweight and efficient component designs.
- 41. C A S E I L L U S T R AT I O N 5 . 3 RETAIL BRANDS AND MASS CUSTOMISATION - Nike: Offers personalization through "Nike By You" and "NIKEiD" programs. - Ralph Lauren: Customization via "The Polo Custom Shop." - Paris Miki (Eyewear): - Uses customer images and design systems to recommend frame styles. - Customers and opticians collaboratively tweak designs. - Finished eyewear is created in-store within an hour. Mass customization leverages technology to meet diverse customer needs while maintaining cost efficiency, making it an increasingly viable strategy across industries.
- 42. Conclusion on CRM Effective Customer Relationship Management (CRM) integrates strategic, operational, and analytical dimensions. Modern CRM extends beyond technology to focus on delivering exceptional customer experiences (CX) through aligned processes, people, and tools. With evolving trends like AI, Big Data, and customer-centric strategies, CRM is pivotal in enhancing customer satisfaction, loyalty, and profitability. Challenges remain in balancing technological integration with human-centric approaches, emphasizing the importance of tailored value propositions. Firstly, I would like to say about Disclaimer for this conclusion and Questions & Answers. All of the assumptions, estimation & guestimation are only based on my understanding on this chapter.
- 43. Discussion Questions How can businesses effectively balance technological advancements in CRM with maintaining a human-centered approach to customer engagement? What role do customer feedback loops play in refining CRM strategies? How can organizations ensure their value propositions resonate with diverse customer segments in a globalized market? By integrating CRM technologies to enhance rather than replace human interactions. For example, AI-powered chatbots can handle routine queries, allowing customer service representatives to focus on complex issues. Personalization through data analytics can maintain a human touch by tailoring experiences to individual preferences. Feedback loops help businesses understand evolving customer needs, pain points, and satisfaction levels. They enable continuous improvement in CRM processes by providing actionable insights that can enhance customer experiences and loyalty. By leveraging customer data analytics to segment markets based on cultural, economic, and behavioral differences. Companies should adopt localized strategies and ensure that their messaging aligns with the unique needs and expectations of each segment, while maintaining a consistent global brand identity.
- 44. Group-6 THANK YOU F O R Y O U R A T T E N T I O N Presentation - CRM Thank you for your attention today. We hope this presentation has provided valuable insights into the benefits of CRM.