Marketing Management
Strategy from the Outside In: Profiting from Customer Value Write-Up - Part II
I. Introduction In Strategy from the Outside In: Profiting from Customer Value, George S. Day and Christine Moorman use research to determine business strategies that separate successful from unsuccessful firms. This write-up shall have a section, titled § II. Brief Summary, which outlines each chapter in Chapters 7 through 13, including the conclusion. This write-up shall also have a section, titled III. Application, which shall apply the material from § II. Brief Summary to a firm (hereinafter "Firm A") with which I worked as a business consultant. Firm A is a multi-national holding company that specializes in acquiring, supporting, and growing its subsidiary companies through accelerated organic growth as well as through acquisitions and/or strategic joint ventures and divestitures.
II. Brief Summary
Chapter 7. The Third Imperative: Capitalize on the Customer as an Asset
For a firm, the profitability of the customer asset - the sum of the discounted long-term profits associated with the customer's purchases and referrals - is based on three principles. First, that a firm must distinguish between behavioral loyalty – the frequency of customer purchases from a firm when a need arises – and attitudinal loyalty – an attachment to the firm and/or its specific products or services. Second, that a firm must manage customers to engage in behaviors that directly result in increased economic profits for the firm. These include giving the firm a greater share of wallet, purchasing new products and services, and lowering price sensitivity, etc. And third, that a firm must be capable of capitalizing on the customer asset, which will be addressed in Chapter 8.
Chapter 8. Capitalizing on the Customer as an Asset
To be capable of capitalizing on the customer asset, a firm must use strategies to select, develop, protect, and leverage customers. First, to
I. Introduction In Strategy from the Outside In: Profiting from Customer Value, George S. Day and Christine Moorman use research to determine business strategies that separate successful from unsuccessful firms. This write-up shall have a section, titled § II. Brief Summary, which outlines each chapter in Chapters 7 through 13, including the conclusion. This write-up shall also have a section, titled III. Application, which shall apply the material from § II. Brief Summary to a firm (hereinafter "Firm A") with which I worked as a business consultant. Firm A is a multi-national holding company that specializes in acquiring, supporting, and growing its subsidiary companies through accelerated organic growth as well as through acquisitions and/or strategic joint ventures and divestitures.
II. Brief Summary
Chapter 7. The Third Imperative: Capitalize on the Customer as an Asset
For a firm, the profitability of the customer asset - the sum of the discounted long-term profits associated with the customer's purchases and referrals - is based on three principles. First, that a firm must distinguish between behavioral loyalty – the frequency of customer purchases from a firm when a need arises – and attitudinal loyalty – an attachment to the firm and/or its specific products or services. Second, that a firm must manage customers to engage in behaviors that directly result in increased economic profits for the firm. These include giving the firm a greater share of wallet, purchasing new products and services, and lowering price sensitivity, etc. And third, that a firm must be capable of capitalizing on the customer asset, which will be addressed in Chapter 8.
Chapter 8. Capitalizing on the Customer as an Asset
To be capable of capitalizing on the customer asset, a firm must use strategies to select, develop, protect, and leverage customers. First, to