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Customer Value

In: Business and Management

Submitted By jeangrea
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1) Explain how firms attempt to create loyalty by creating value for consumers. Discuss whether what are often known as loyalty programs truly generate loyalty. Explicitly, discuss the concept of VALUE; how it is created, how it captured, and the relationship between value and expectations.
Hamel (1996), explains a loyal customer is one that has a “a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior”. Companies attempt to create loyalty in many different ways with marketing techniques that create a better value for the customers such as; offering a coupon, providing a store merchandise card with purchase rewards, buy cheap and sell cheap, and numerous other methods. Providing value is the only way to maintain customer satisfaction and loyalty. Value is created by providing the best product, made from the best materials, that is meant to withstand and last the duration of its purpose. Value is created when a product does exactly what is expected of it. According to Barwise & Meehan (2005) customers usually choose the brand that they expect to give them the basics that outperform the competition. When a customer has certain expectations for a product and they follow through as specified then the company has created value and the customer will become loyal. If expectations of the product are failed then the product has no value, but if it does what it states then the product can become very valuable.

2) Describe what loyalty is, what satisfaction is, how they are related to each other and consumer expectations, and how these concepts might be measured.
In order to create complete customer loyalty is to provide complete customer satisfaction, these are the core competencies for a firm. Oliver (1999) characterizes...

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