Chapter 3
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Transcript of Chapter 3
Chapter # 3
1KKB, Chapter #3
How much do you really know about your customers?
Who is a Key Customer?
Customer that contributes or has a potential to contribute a lot a bigger amount of revenue.
2KKB, Chapter #3
To exact control over customer base
3KKB, Chapter #3
4KKB, Chapter #3
Demographics
Physical characteristics of the buying/ selling environment.
It is strongly influenced by potential for sales growth & profit.
5KKB, Chapter #3
Psychographics
Values & Attitude shared by the buyer or supplier.
Includes – negotiation style, co-operation problem, helpfulness, response speed etc.
6KKB, Chapter #3
On the Basis of Psychographic factors
7KKB, Chapter #3
Customer Attractiveness
8KKB, Chapter #3
Attractiveness Judgment
9KKB, Chapter #3
Other implications……..
Market share Product life cycle
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Important criterions for market share:
11KKB, Chapter #3
Life cycles Introduction
stage Growth stage Maturity stage Decline stage
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Implication for suppliers
Introduction stage : decide on the probability of success.
Growth stage: capacity commitment and extension.
Maturity stage: indispensability of the supplier’s product to the customer.
Decline stage: traded off against the prospect of further collaborations on new products.
13KKB, Chapter #3
Measuring the current relationship status with key customers Current share of the
customer’s business Share relevant to
main competitor’s share
Trend in share over the last three years
The extent to which customers are locked into organization’s offerings
Customer’s perception of technical strength
Customer’s perception of company’s service
Customer’s perception of price competitiveness
Duration of the relationship
Breadth of the contact base
Customer’s attitude to the company
14KKB, Chapter #3
CALCULATING ATTRACTIVENESS AND RELATIONSHIP STATUS SCORES
Step 1: agree two list of criteria - Measure attractiveness Measure current relationship status.
Step 2: Weight the criteria according to the degree of importance.
Step 3: each individual customer is rated against the weighted criteria.Usually 0-4 rating scale is used A rating of 4 indicates ideal requirements.
Step 4: multiply the rating for each factor by its weighting to produce a weighted score for that factor
15KKB, Chapter #3
ATTRACTIVENESS OF CUSTOMER
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Relationship status with customer
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The Nine-Cell Customer Strategy Grid
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Development strategies to increase key customer business Four generic strategies:
target for developmentdefend against competitionmaintain with minimum resource withdraw
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Positive tasks to develop key customer relationship the task of the key customer
manager is to steer the relationship sensitively through the early stages
the state of each customer relationship must be monitored
plans should be made to develop to the next stage of commitment.
manager should protect the current position.
20KKB, Chapter #3
Cont…..
Weak Average Strong
Lo
w
M
ediu
m
H
igh
Relationship status of suppliers
Maintain selectively
Develop DevelopDefend
Maintain minimally
DefendMaintain
Develop
Withdraw Maintain minimally
Develop selectively
21KKB, Chapter #3
Relationship Bonding
22KKB, Chapter #3
The End
23KKB, Chapter #3