Customer Profitability Management For International Companies

Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is "meeting needs profitably." The marketing concept is a business philosophy that has been readily accepted by most marketers. It holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets. The ultimate purpose of the marketing concept is to help organizations achieve their objectives. In the case of private firms, the major objective is profit. But private firms should not aim for profits as such but to achieve profits as a consequence of creating superior customer value. A company makes money by satisfying customer needs better than its competitors.Because loyal customers accounts for a substantial amount of company profits, developing more loyal customers increases revenue. The key to customer loyalty and retention is customer satisfaction (CS). But, on the other hand, although the customer-centered firm seeks to create high customer satisfaction, its main goal is not to maximize customer satisfaction. If the company increases CS by lowering its price or increasing its service, the result may be lower profits. A company shouldn't pursue and satisfy all customers. Different segments of customers should be treated differently in order to ensure profitable growth.Beginning with the concept of customer satisfaction and relevant key terms, the thesis spells in detail the specific marketing tools that a company can use to develop stronger customer bonding and satisfaction, and then four methods to track or measure CS. All these are concluded in chapter 1. Chapter 2 says that companies with the best connections to their customers unwaveringly focus their orientation, configuration and use of information on the people and business that buy from them. To have a good understanding of CS, chapter 4 conducts a case study. Examining the CS practices at Volvo Cars can help marketers avoid the CS ruts. Customersatisfaction being equated with quality is one of the ruts. As we've known, there is an intimate connection among product and service quality, customer satisfaction, and company profitability. Higher levels of quality result in higher levels of customer satisfaction while supporting higher prices and (often) lower costs. Therefore, quality improvement programs normally increase profitability. Chapter 3 deals with total quality management. The last two chapters state that a company should not only attract new customers but also retain current customers. And it could improve its profits by " firing " its worst customers; lowering the costs of serving the less profitable customers or segmenting customers in terms of their profitability. Another important thing to be noted is that the often-heard claims about the benefits of loyal customers should be reconsidered.In a word, the thesis will provide Chinese marketing managers a better way of managing customer profitability, which is critical to private firms (in contrast to nonprofit and public organizations).