Explain Customer-Perceived Value.
Customer Perceived Value (CPV) is a marketing and branding concept tightly dependent on customers' subjective perception of whether their needs are satisfied or not. Customers will react on how a product/service is packaged and marketed. The messages serve as the "benchmarks" which customers level on their satisfaction. Product/service may either be hyped which create high expectation, or oppositely under‐rated which generate "better" appreciation. Companies must determine customers' true feeling and sense so that they can fit their product/service. This partakes of being "market-driven" product/service positioning. In‐depth market research and study facilitate this process. A highly relevant concept is one of "value proposition". In this process, the benefits offered by companies on their product/service are equated with price asked. Initially, low pricing may be resorted to for the customers to find higher value. A long-term marketing campaign building up quality with concomitant price escalation can be pursued. The product is differentiated with the competitors. The right and timely emerging causes/advocacies must be set such as those relating to health and safety issues, environment friendly concerns, among others. On the whole, Calvo & Barmettier (2013) indicated that the CPV is a value that sums up both the perception benefits (related to performance, service level, relationship, and image) and the total product costs (selling price and other costs). The value, benefits and the costs are then evaluated and compared continuously with the alternative competitor’s offerings. (p.4)
Explain Total Customer Satisfaction.
Total Customer Satisfaction is a business strategy aimed at not just providing high quality and commensurately priced product and service but will make the customers properly and sufficiently attended to during and after the purchase/sale. It means that the customer will use or avail of the product/service with ease and comfort through the provision of easy-to-follow instructions and packaging. The most highly priced and sought-after bottle of wine even by connoisseurs will end up with a big challenge and disappointment if opening the bottle will necessitate the use of special device not commonly available on hand at home or even in the most equipped hotel or restaurant. Such product may even cause accidents. This strategy also entails treating customers with respect, precision and prompt service. The popular restaurant or eatery serving delicious dishes in town but makes the customers wait infinitely till they lose their appetite will end up sans excited customers. Waiters who trip the sauce on the customer’s best dress for an occasion or splash the wine on well-coiffure hair spoil a "dream date". Also, great dissatisfaction results when a customer is served steak instead of the vegetarian dish that he/she ordered and has been longing to partake. Customers must be assured that business owners are not only after their money when offering “expensive product/service". Business owners must make customers feel that they are not motivated by sheer profit. They must demonstrate passion for service and satisfaction. Total customer satisfaction means considering the condition of the customers especially the very young and the elderly as well as the PWDs by providing special tools and furniture for them when availing of the service. The interaction between the seller and customer must not end just after the cash register rings or the credit card has been swiped. An easy and reliable "service-after sale" mechanism must be in operation 24/7. There must be transparent "feedback" system for the manufacturers and service providers to truly know customers' satisfaction or complaints. It can be through the suggestion box, direct verbal exchange, internet/website and by availing of the "mystery shopper" approach.
What valuable functions can brands perform for a firm?
Brands serve as the “passwords” of products and service of firms to customers. They mirror the kind, quality, satisfaction and efficacy of products and services produced and offered by firms in the market place. Brands allow quick recall of product information to customers who familiarize themselves of the salient features of product and service which fit and match their need and satisfaction. It fosters customer loyalty and confidence. Preferred brands earn more “likes and shares” and are promoted through personal endorsement by customers who become brand advocates. "Word of mouth" marketing evolves. It serves as the price-setting mechanism. Upper-end brands usually carry higher price tags compared to newbies and generic items in the market. Brands also assure customers of the "risk-free" consumption/use/availment. At the retailing level, preferred brands get good shelf positioning. Brands generate great opportunities for franchising as prospective franchisees know the market demand is good and stable. The manufacturer/producer/provider of better brands have better chance of creating and launching "product variants" provided the customers’ expectation of high quality and service are at par or even better than the original. It behooves the proverbial saying of "a good chip from a good block."
Given that the power of a brand resides in the minds of consumers and how it changes their responses to marketing, there are two basic approaches to measuring brand equity. Briefly, describe each of these approaches.
Brand equity refers to the intangible value that a brand bestows on a product or simply said, it is the strength of the brand. Marketers measure brand equity to find out the effectiveness of their marketing strategies. For the owners of the business, measuring brand equity is important in determining business directions. For after all, Keller (2003) argued that brand equity is “the value that serves as the bridge that links what happened to the brand in the past and what should happen to the brand in the future” (As cited in Christodoulides & de Chernatony, 2009, p.45)
There are two approaches to measure brand equity, viz: the indirect approach and the direct approach (“Developing a Brand Equity Measurement and Management System”). The indirect approach examines potential sources of brand equity by measuring customer mind-set or brand knowledge. The consumer is evaluated in terms of (1) brand awareness –consumers’ ability to recall or recognize the brand; and (2) brand image – consumers’ perception of and preferences for a brand as reflected by the brand associations in the customers’ memory. A variety of qualitative and quantitative techniques may be employed under the indirect approach. Qualitative researches are relatively unstructured measurements whereby a wide range of possible consumer responses may be gathered. Free association qualitative approach can yield good profiles of consumer perception, favorability of the associations with the brand, personal values, among others. Some companies even resort to observational qualitative approach by directly observing consumers as they shop or as they consume their products and capture consumers’ behavior. Quantitative indirect approach can also be used to permit more confident and more strategic and tactical recommendations since this approach adopts structured questions so that numerical representations are possible. This approach is useful in tracking studies to monitor brand knowledge structures of consumers over a period of time.
The direct approach measures the outcome of customer-based brand equity in terms of the financial asset value that the brand creates to the business. Product outcome measures consist of market place performance indicators such as revenue, profit or price premium. Simon and Sullivan (1993) used financial market data to calculate brand equity as a component of the residual market value of a firm after accounting for the firm’s tangible assets. (As cited in Pradhan & Prasad, 2014, p.57). By and large, the indirect and direct approaches must be taken as complementing each other. The indirect approach is considered as the driving force for incremental financial gains to the firm.
How does a loyal brand community support the positioning and branding of a small business? Provide an example to support your explanation.
Small businesses are in a unique position to create valuable customer experience. Their products are often a specialty or target customer is defined. Small businesses are also trusted for their integrity, community engagement and customer service It is free from stringent corporate rules and processes and is more responsive to customer needs. These attributes of small businesses come together to create a hugely competitive value proposition (Beesley, 2015). In this context, a loyal brand community support can prop up the positioning and branding of small businesses Brand community is regarded as a brand’s customers, fans and advocates. With a strong and loyal brand community, a small brand can be successful if developed and appreciated. Some ways to build brand loyalty include: (1) Have great products and build customer relationships. A small business owner having full control over the quality of his products and services must offer the best. Customers should be provided the best possible service to keep them coming back for more purchases. Once the customer relationship is established, the customer becomes a brand advocate for the business; (2) Make employees brand advocates – Customers are not the only fans of a product. Building a community around the people who work for a business means happy and loyal employees who will also serve as brand advocates (3) Be involved in the community– The business owner must build a community around the business. Face-to-face interactions with customers and the neighborhood speak well for a businessman who is not only doing business but is reaching out as well. Participation in community activities such as local events, fund –raising, charities, workshops, loyal customers events are some venues for community involvement. (4) Use social media- As a small business owner, a cost-saving technique to advertise your products and gain brand loyalty is through social media e.g. Facebook and Twitter. (5) Develop a distinct brand message – Marketing message should clearly define the brand and differentiate it from competitors-e.g. logos must reflect personality of the brands, products or services offered and overall tone of the business.
As an example, a pet grooming business in a village should develop brand loyalty in the community in a variety of ways. First, it must be able to offer the best pet-grooming techniques and facilities. There may be other similar shops in their village such that the owner must be able to establish a distinct image through appropriate and attractive logos. The staff should be well-trained, customer-friendly and motivated so that they themselves can advocate the service. Presence of the owner is important as face-to-face interactions will help build good customer relationships. Community involvement will contribute towards having brand loyalty e.g. having free workshops on caring for pets, participating in local events by giving out promos and prizes. Online involvement through social media may also be resorted to. It is also important that the owner should be passionate about his business, should not only be a good salesman but should also be an advocate himself of the brand!
References
Beesley, C. (2015) Ten tips to help you build and grow a stand-out small business brand. U.S. Small Business Administration. Retrieved from http://sba.gov.com.
Calvo, A. & Barmettier, A. (2013). Customer perceived value to identify and close the gap in positioning. Perspective, Value Partners. Retrieved from http://valuepartners. com.
Christodoulides, G. & De Chernatony (2009) Consumer-based equity conceptualization and measurement, A literature review. International Journal of Market Research Vol.52 Issue 1. The Market Research Society. 2010 .Retrieved from http://scribd.com.
Developing a brand equity measurement and management system. n.d. MSG Study Guide. Retrieved from http://managementstudyguide.com.
Pradhan, J.& Prasad.D. (2014) Measuring customer-based brand equities of FMCGs in Indian rural markets-An empirical study. International Journal of Business and Management Invention. Volume 3 Issue 1 January 2014. Retrieved from www.Ijbmi.org.
