Maximizing Value for Customers

Maximizing Value for Customers

Minwir Al-Shammari (University of Bahrain, Bahrain)
Copyright: © 2009 |Pages: 45
DOI: 10.4018/978-1-60566-258-9.ch009
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Efforts to improve the experience of customers do little to boost customer satisfaction and loyalty if they fail to connect with customers and anticipate their needs. The first chapter of this last part of the book deals with the CKM harvesting phase. A process-oriented customer-centric enterprise needs to know its customers and to be resilient and vibrant towards them and their preferences by creating and delivering superior value offerings that suit their desired needs and/or preferences. Doing good things for customers reciprocates good things for business. As the long-term objective of a competitive business strategy is to build SCA, focus should be on ‘difficult-to-imitate’ resource-based capabilities (Salck et al., 2006). The CKM strategy is adopted in order to leverage business DCCs, i.e. CK, to deliver highest value-adding (VA) products and/or services to customers, and achievement of SCA for organizations.
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Conceptual Foundations

The business environment of the 21st century is characterized by extremely tight competition between companies. Companies are forced constantly to reduce costs and outperform their rivals. However, as customers increasingly are becoming demanding and pressuring organizations for higher quality products and/or services, competing only with price is becoming very risky. Although efficient and cost-based operations have been traditionally adopted, other bases of competition need to be put in place.

Business organizations strive to satisfy the minimum expectations of their stakeholder groups, including customers. Businesses aim to deliver satisfaction levels above the minimum for different stakeholders: companies might aim to delight their customers, perform well for their employees, and deliver a threshold level of satisfaction to their suppliers (Kotler, 2006). For convenience only, the view of consumers in the B2C context may have been emphasized in this as well as the subsequent chapter. However, the adopted definition of customers in this book is much broader and includes more than individual consumers; it encompasses groups such as business customers, civilians in the Government, patients in healthcare, etc.

This section of the chapter covers the following parts: customer segmentation, customization, mass customization (MC), MC examples, and ICT requirements for MC.

Customer Segmentation

In recent years, the role of marketing has changed radically. Instead of interacting with large simultaneously numbers of customers, the new role is to interact with individual customers, focusing on the specific needs of that customer through customer segmentation.

Customer segmentation and analysis is the process that seeks to understand customers better, and increase revenue and retention by dividing a customer base into groups that share similar characteristics, based on demographics such as attitude and psychological profiles (e.g., age, gender, interests, and spending habits). Value-based customer segmentation, on the other hand, looks at groups of customers in terms of the revenue they generate and the costs of establishing and maintaining relationships with them.

Usually, only a few broad segments would be defined based on overall demographic information, such as older users and young users. However, with utilization of advanced data storage and analysis systems, it is possible to define many more segments at a much finer and finer level of precision. It is now possible to define the segments based on their value and volume of interactions with the company (rather than general demographic information) and to automate different responses to each segment. However, CKM needs to address the issue of segment granularity- how small the customer segments may be before they become too many for the organization to handle (Knox et al., 2003)Market segmentation follows three approaches (Hill and Jones, 2007):

  • No market segmentation, wherein a product is targeted at the ‘average customer’,

  • High market segmentation, in which a different product is offered to each market segment, and

  • Focused market segmentation that offers one product to one or a few market segments.

Customer-centric services include three types:

  • Customization for customers (e.g., DELL)

  • Modularization

  • Bundling (cross-selling and up-selling)

Complete Chapter List

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Table of Contents
Luciano Batista
Minwir Al-Shammari
Chapter 1
Minwir Al-Shammari
In today’s dynamic business environment, change is omnipresent. Organizations have to develop sound change management strategies in order to counter... Sample PDF
Setting a CKM Strategy
Chapter 2
Minwir Al-Shammari
The only constant in life is change, and business organizations are not different. Environmental uncertainties made transition to knowledge-based... Sample PDF
Spotting Environmental Drivers
Chapter 3
Reorganizing People  (pages 63-104)
Minwir Al-Shammari
The ability of an organization to compete in rapidly changing business environments is contingent upon its ability to develop competitive strategies... Sample PDF
Reorganizing People
Chapter 4
Retooling ICT Systems  (pages 105-135)
Minwir Al-Shammari
Regardless of the type of organization or operation, the evolving nature of organizational ICT systems helps organizations to live up to changing... Sample PDF
Retooling ICT Systems
Chapter 5
Redesigning Processes  (pages 136-167)
Minwir Al-Shammari
In today’s turbulent and complex business environments, the focus has shifted from products to services. As a result, services have become a new... Sample PDF
Redesigning Processes
Chapter 6
Minwir Al-Shammari
The customer is a strategic element in a company’s downstream supply chain. In the new economy, customers, whether they are individual consumers or... Sample PDF
Capturing Data from Customers
Chapter 7
Minwir Al-Shammari
Whether companies are engaged in B2B or B2C transactions, they need to understand their customers. Once customer data are captured and stored in... Sample PDF
Compiling Profiles of Customers
Chapter 8
Minwir Al-Shammari
Increasingly, knowledge is becoming a primary engine of growth in the globalized business world and is making nations more competitive as they shift... Sample PDF
Creating Knowledge about Customers
Chapter 9
Minwir Al-Shammari
Efforts to improve the experience of customers do little to boost customer satisfaction and loyalty if they fail to connect with customers and... Sample PDF
Maximizing Value for Customers
Chapter 10
Minwir Al-Shammari
Effective development of customer products and/or services requires valid and up-to-date CK in order to target the right customer with the right... Sample PDF
Measuring Return on Relationships with Customers
Chapter 11
Minwir Al-Shammari
The previous chapter focuses on creating value-added products and/or services to customers..As the management of a CKM change is a journey, not a... Sample PDF
Managing Learning throughout CKM Change
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