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BRL-013: Customer Value Management

BRL-013: Customer Value Management

IGNOU Solved Assignment Solution for 2021-22

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Assignment Code: BRL-13/TMA/2021-22

Course Code: BRL-13

Assignment Name: Customer Value Management

Year: 2021-2022

Verification Status: Verified by Professor

Marks: 100


Q1) Explain the different stages of perceptual process.

Ans) The stages of Perceptual Process are:

Need Recognition

When a customer recognises an issue or need, the perceptual process begins. Rupa, for example, uses an ancient desktop computer and may notice that it isn't operating as well as she expected. She also understands that having a laptop will be handier than owning a desktop because she will be able to take it to college whenever she needs it. These are the types of issues that clients face on a regular basis. A problem is identified when they recognise the discrepancy between the current state and the desired one. When they come upon an issue, they normally endeavour to solve it.

Information Search

The customer is likely to seek additional information in order to remedy a problem. Internal or external searches might be used to gather information. External search comprises information from relatives, peers, market locations, and commercials, among other things, whereas internal search includes information from the customer's memories or personal buying experiences. Consider the preceding example. Rupa might simply pay greater attention to a laptop's product information. She becomes more aware of laptop commercials, computers purchased by her pals, and laptop-related peer talks. She may also seek knowledge more actively by going to stores, talking to friends, or reading computer publications, among other things.

Customers learn more about some of the market's competitors' brands, as well as their features and attributes, by acquiring information. Rupa has a wide range of brands to choose from, but she will concentrate on a few of the most popular. These are referred to as the market's 'awareness set' of brands. Some of these brands may meet her 'consideration set' of first buying criteria, such as price and processing speed. Only a handful will remain as strong prospects in Rupa's 'choice set' as she continues her information quest.

Evaluation of Alternatives

Unfortunately, there is no singular, straightforward evaluation technique that all customers, or even one customer, can use in all purchasing scenarios. So, how does Rupa weigh her choices? The evaluation procedure is assumed to be logical. According to this viewpoint, a client is attempting to solve the problem and, as a result, meeting his or her need. In this situation, Rupa will search the multiplicity of laptop manufacturers available to her for problem-solving benefits. Rupa looks for things with a specific set of characteristics that would provide her with the benefits and results she desires in her new buy. As a result, the customer sees each product as a collection of traits with varying degrees of ability to give problem-solving advantages to meet his or her needs.

Buying Decision

To put her decision to buy into action, a consumer must choose between two options: (1) a specific brand, and (2) the precise retail location from which she intends to buy.

In fact, there are three options for making these selections:

  1. simultaneously

  2. item first, outlet second

  3. outlet first, item second.

Customers frequently engage in a store and brand selection process at the same time.

Rupa may choose a set of well-known brands (Lenovo, Sony, Hitachi, HP, Dell, Mac, Compac, Acer) as well as some lesser-known brands (Lenovo, Sony, Hitachi, HP, Dell, Mac, Compac, Acer) based on product technical features (attributes), price, and brand availability in computer stores in the example above. It's also likely that she chooses where to shop (for example, TATA Croma in her area) or luxury brand retail establishments. Rupa proceeds on to the transaction, i.e. 'BUYING', once she has decided on the brand and store.

Post Purchase Behaviour

Customers' post-purchase behaviour determines whether they will stay with the marketer or defect (leave the business/company). Customers will stay with the same marketer if the purchased goods/services match their expectations; else, they will defect (leave the business/company).

The following are examples of post-purchase behaviour:

Purchase Involvement

Purchase participation can be large or low. Rupa's decision to buy the laptop is an example of a high-involvement purchase process, in which the buyer has gone to great lengths to obtain knowledge about a product's features before making a decision. Buy of 'diet cola,' which is a routine product and not so essential decision, would be a low purchase involvement decision, as the level of concern and interest in the product is very low.

Product Involvement

Product engagement is another type of involvement that determines the extent to which information is processed. In contrast to the purchasing situation, product engagement refers to the importance a customer gives to a specific product (purchase involvement). For example, a company may have a low product involvement (e.g., renting a car for its guests) but a high purchase involvement because the guests are important foreign guests visiting on business, and the management wants to impress the guests by renting a Mercedes Benz rather than the usual Indigo or Innova.

Q2) “Customer interaction is a dominant factor in marketing strategies because it’s the interaction with customers which diverts customer’s expectations and perception towards retention and loyalty of customers.” Elaborate.

Ans) Customer contact refers to how a company interacts with its customers throughout the purchase of products or services, and it encompasses all modes and channels utilised before and after the transaction. Customer engagement is a key component of marketing strategies since it is through interactions with consumers that customers' expectations and perceptions are shifted toward customer retention and loyalty.


Customer interaction management is when a company uses specific tools or systems to manage customer interactions in order to achieve business objectives. Customer engagement must be handled with extreme caution since it generates a positive customer experience, which in turn adds value to the company. Client interaction management is a term used to describe a sort of business application system that is in charge of managing customer interactions.

At most cases, a customer interaction application will be installed in a call centre and utilised by executives to speak with the company's customers. However, because there is fierce competition nowadays and the customer is king of the market, every firm seeks to manage its client interactions in order to retain customers and achieve profitable results. Customer interaction management systems handle contact through a variety of channels, including e-mail, SMS, phone, scanned documents, and so on.


A company can obtain the following benefits by controlling client interaction:

  1. It enables businesses to effectively resolve client complaints.

  2. It aids in the creation of valuable experiences, which aids in the generation of value.

  3. It aids in the achievement of company objectives such as cost reduction, increased sales, client retention, and value creation, among others.

  4. It enables businesses to treat customers the way they would like to be treated.

  5. It aids businesses in the formulation of policies and the development of marketing strategies.

There are an increasing number of ways for a firm to communicate with its customers and obtain feedback. These are divided into five groups based on the proportion of physical and virtual contact. These are some of them:

  1. Field account management, servicing, and personal representation are all part of the sales force.

  2. Retail branches, stores, depots, and kiosks are examples of outlets.

  3. E-commerce, which includes e-mail, the Internet, and interactive digital television; and m-commerce, which includes mobile telephony, short message service and text messaging, wireless application protocol, and 3G mobile services.

To optimise commercial exposure and profit, several channels are now being used in tandem. Companies must also combine input from all of the many lines of business with which any particular customer engages and transacts through a CRM system, in addition to integrating consumer feedback from all customer channels and contact points. Otherwise, determining an individual's lifetime value, much alone creating a cohesive image of their experience with the organisation, becomes impossible.

Building client relationships is a far different job than simply providing typical customer service. According to this viewpoint, the complete customer relationship is simply a means to an end; optimising customer value is the goal, which can be achieved by using all of the total customer relationship's components.

Customers want retailers to remember them from previous transactions. As a result, a firm must organise and manage all customer interactions across all contacts, activities, and communication channels in a consistent and seamless manner. The majority of Fortune 100 firms are attempting to improve their customer interaction experience by implementing cutting-edge technologies that employ knowledge to deliver more personalised and targeted customer interactions.

Managing integrated channels necessitates the capacity to maintain consistent high standards across many channels. The firm can next work to integrate the channels after establishing a set of standards for each channel that defines an amazing customer experience for that channel.

As a result, a massive volume of data must be correctly managed and provided to the relevant service employee at the appropriate moment. In a call centre, for example, the goal is to never have to say, "I'll get back to you with that information." The necessary information should be available to the agent so that the customer problem can be resolved on the first call.

If a retailer is unable to adequately reply to the above, they should examine their customer-facing operations and identify the mission-critical data that supports their application, as illustrated below:

Customer-facing Interaction Point Analysis: Assign costs and income to each of the customer connection points and types: sales cycle calls, customer invoicing, service, support, and advertising. This research will uncover customer-facing interactions that benefit the company by resulting in more sales and upgrades, as well as those that harm the company by resulting in product returns, complaints, and write-offs.

Customer Information Point Analysis: Determine what information is mission-critical for all customer interaction points and types. This contains both explicit and implicit information/documents, both structured and unstructured.

Q3) Discuss the various tools used by retailers for customer value communication.

Ans) In marketing, the functional role of communication is to develop positive relationships with clients. There are various tools to successfully communicate the value to their target customers in order to develop a solid relationship and communicate value to customers. There are two types of marketing tools: a) direct advertising tools and b) indirect marketing tools.

Direct Advertising Tools

These tools are used to communicate value to customers directly, and retailers attempt to deliver their message to target customers directly. The following tools are included in the category of direct advertising tools:

Personal Selling (Retail Stores, Door-to-Door Selling, Kiosks at Malls, etc.): It is both the most effective and the most expensive mode of communication. Because of the face-to-face communication with customers, it is effective. During a conversation with a consumer, salespeople direct their message with an oral presentation in order to close the sale. Furthermore, there is a high likelihood of receiving client feedback and modifying the product/service as a result. "It is the process of convincing and enabling a prospective buyer to acquire a commodity or service or to act favourably upon a concept that has commercial value to the seller," according to the American Marketing Association (AMA).

Advertising (Print, Radio, Television, Hoardings, etc): It is an impersonal means of expressing messages to potential buyers, as well as the communication of ideas, commodities, and services by retailers. Newspapers, magazines, catalogues, posters, radio, television, and hoarding are examples of mass media. It entails sending the same message to a huge number of customers. As with personal selling, there is no automatic feedback mechanism.

Sales Promotion (Discounts, Sales, ‘Bundle Offerings’, etc): Discounts on product or service purchases, offers like buy one get one free, and other communication activities that encourage customer purchasing and merchant effectiveness are all examples of sales promotion. It establishes a crucial connection between personal selling and advertising.

All operations that coordinate the efforts of personal selling, advertising, and merchants to enhance sales and encourage customers to acquire the product/service and set the ground for future expansion are referred to as sales promotion. According to Stanley M. Ulanoff's handbook of sales promotion, "sales promotion" is defined as "all marketing and promotion activities, other than advertising and personal selling, that motivate and encourage customers to purchase through such inducements as premiums, samples, refunds, rebates, and trading stamps."

Indirect Marketing Tools

Retailers use the following tools as indirect marketing tools to communicate value to customers:

Public Relations (Sponsorships, Promotions): It refers to a company's communication and relationships with the general public, such as customers, suppliers, stockholders, employees, and the general public. The nature of public relations programmes might be professional or casual. Because of its unique communication approach, it is a significant method of contacting customers. Every company strives to establish a positive public image in order to gain favourable PR.

Exhibitions and Trade Fairs: Businesses sometimes utilise exhibits and trade fairs to communicate value to customers, where they demonstrate their products and services to customers, incentivize their purchase, and persuade them to form a relationship with the company. Typically, these tools are employed to meet competition obstacles.

Internet: Recent advancements in information technology, as well as increased consumer knowledge of products and services, have paved the way for businesses to communicate value to customers via the internet. The Internet is a collection of networks where individuals from all over the world can connect and share information. Under this tool, retailers attempt to transmit all information about their product/service via the internet, with customers receiving all information at their computer with a single mouse click.

Corporate Identity (Corporate Social Responsibility): It's also a powerful instrument for communicating value. A business can easily construct a strong image in society by fulfilling social responsibility, which aids in the development of a relationship between the business and its clients, and then the firm can easily express the value that it wishes to transmit.

Others such as Packaging, Point-of-Sale, Merchandising and Word of Mouth:

Retailers utilise a variety of tactics to interact with customers, including beautiful packaging with product and business information, information at the point of sale, and so on.

Each of these products has a distinct value, and when combined, they provide a comprehensive 'kit' of marketing communication tools. The marketing communication mix is made up of several communication tools.

Q4) Describe the various strategies for customer retention?

Ans) Customer Loyalty Programme

A customer loyalty programme is a system in which a consumer has voluntarily signed up for it. Customers may be given a plastic card that has their name encoded on it. These cards can be used for shopping, and customers who have them receive special rewards. From group cards, such as Pantaloon's Green Card, to cards that enrol many sellers to cards with a restricted cash value, such as Ad Labs' and PVR Cinema's movie ticket cards. India has embraced card technology in retailing in a variety of formats with great enthusiasm. Everyone is attempting to maximise the amount of value generated for the company by establishing superior customer equity. Modern Indian retail shops, which are still taking shape and expanding at a rapid rate, have already implemented loyalty cards as a key tactic. Big Bazaar has a credit card in partnership with ICICI, Vishal Mega Mart has a credit card in partnership with SBI, and Reliance has its own credit card. For example, Lifestyle has a loyalty programme called "The Inner Circle." Rewards programmes such as Westside's 'Club West' and Shoppers Stop's 'First Citizen' are also competing to recruit and retain customers. Customers are enrolled in loyalty programmes by small retail chains such as Ritu Wears, Globus, Saboo, Bombay Selection, CTC Plaza, and others.

Retailers benefit from loyalty programmes in the following ways:

i)   Decreasing price competition

ii)   Increasing switching costs

iii)  Decreasing marketing costs

iv)  Building trust and positive customer relationships

v)   Strengthening the brand

vi)   Increasing the share of wallet (share of expenditures)

A loyalty program's ability to attract members is determined not only by the value of the incentives it provides, but also by when those rewards are available. According to psychological research, when redemption benefits for a loyalty programme are troublesome and delayed, they will be a less potent motivator. Many accumulating benefit programmes, such as frequent-flyer programmes, attempt to (partially) address this difficulty by issuing regular statements of collected points to their members. Typically, these comments are supported by material that promotes aspirational values and the ease with which various prizes can be obtained.

Special Customer Service

Customers are people who want to get the most out of their money. As a result, providing exceptional customer service is one approach to keep crucial customers. Providing one devoted employee as a key relationship manager, for example, to some of the top customers is an excellent method. Consumers have more options today, and the targeted customers are the most valuable to the organisation, thus customer service must be a top focus for whatever contact or "touch points" a customer has with a company. There are two sorts of programmes meant to improve customer service. When a customer has an issue (such as a product failure, a billing query, or a product return), they contact the company to get it resolved.

Most businesses now have infrastructures in place to handle reactive service situations, such as 800 numbers, faxback systems, e-mail addresses, and a range of other options. Proactive service, on the other hand, is when a manager decides not to wait for consumers to contact the company, but rather to be proactive in starting a dialogue with them before they complain or engage in other conduct that necessitates a reactive reaction. This is more of a case of good account management, in which salespeople and others who work with specific customers are trained to reach out and anticipate their requirements.

Community Building

The development of a sense of community among consumers is a third strategy for increasing client retention. Shoppers Stop, for example, dedicates the first two days of sale to their loyal customer group and sends them invitations telling them about sales and special incentives well in advance. They also engage in the creation of an online community in which clients can exchange information via bulletin boards over the internet channel.

Similarly, Tata's Landmark book bookstore invites its loyalty card members to special book releases and author interactions, as well as cultural programmes such as jazz, held inside the store. Similarly, there are examples of sporting goods retailers in other countries that, in addition to selling stuff, give an option for local athletic event organisers to post information about their events on their websites, so forming an internet member club.

The store discovered the following after the database was built:

  1. Club members bought 11 times more than non-club members.

  2. In two years, 81% of club members became multi-buyers.

  3. The club boosted retention.

Encourage Cross Selling and Multi-Channel Usage

According to research, a repeat client is even more loyal if he is open to the retailer's cross-selling and add-on-selling operations. Cross selling is the practise of selling a complimentary product or service alongside a primary transaction, such as selling a printer to a customer who has already committed to purchase a computer. Selling additional new products and services to existing consumers is known as add-on selling. For example, Big Bazaar sells furniture as well as food to its customers.

Usage of Multiple Channel by Retailers

Retail channels can be divided into five groups based on the proportion of physical and virtual engagement. These are some of them:

  1. Field account management, servicing, and personal representation are all part of the sales force.

  2. Retail branches, stores, depots, and kiosks are examples of outlets.

  3. E-commerce, which includes e-mail, the Internet, and interactive digital television; and m-commerce, which includes mobile telephony, short message service and text messaging, wireless application protocol, and 3G mobile services.

Linking Customer Value to Customer Loyalty

Several studies have found that delighting consumers and delivering superior value derived from good services and quality products are two of the most successful ways of establishing client loyalty. Customer value is "the essential underpinning for all marketing activity," and having a high value is one of the main reasons for customers to patronise you. "Behavioral intents of loyalty toward the service provider as long as such relational exchanges produce better value," says customer value.

In airline travel and retailing services, prior empirical research has revealed perceived value as a primary factor of consumer loyalty. Customer-perceived value has been found to be a substantial driver to purchase intention. Loyalty may be extremely valuable to both customers and businesses. Customers are eager to put their trust in companies that can provide better value than their competitors' offers. Customers that are loyal to a company may spend less time searching for, locating, and analysing buying options. Customers can also minimise the time and effort required to become acquainted to a new vendor by avoiding the learning process. Customer loyalty will be influenced positively by perceived value.

Q5) Explain the potential areas of service failures in retailing.

Ans) Customer satisfaction is a difficult but not impossible endeavour. Customers' concerns and complaints can be resolved if retailers fully comprehend the demands and expectations of their customers. To remedy the difficulties of the clients, the merchant must first comprehend the areas of service failure. There are various types of service failures in retail, which can be divided into three categories:

Service Delivery Failure

It is the primary source of customer discontent and churn. Customers are irritated by a poor service delivery system, which not only wastes the retailer's time but also irritates them. The following are examples of service delivery system failures:

  1. Brand not available as per the customer requirement

  2. Quality of the brand demanded by the customer not available

  3. Customer service is slow

  4. Service personnel is not available

  5. Service personnel is not knowledgeable

  6. Bill payment errors

  7. Proper attention is not given to customers

  8. High check-out time

  9. Delay in problem resolution

  10. Discounts/schemes not available due to stock run out

Employees related Failure

  1. No proper attention to customer complaints

  2. Not empowered to handle the issues

  3. Lack of responsibility

  4. Lack of training to sales personnel

Failure in External Communication

  1. Goods not available as communicated in their advertisements

  2. Dual meaning communication regarding offer and schemes

  3. Goods not as per the packaging and advertisement

Q6) Discuss the various technologies used by retailers to deliver value to their customers.

Ans) Technology enables customer delivery value in terms of quick delivery of purchased things. Point-of-Sale terminals, which integrate both hardware and software aspects, are used at checkout counters. Bar codes or RFID tags are used in conjunction with POS terminals to ensure that things purchased are quickly identified and invoiced with minimal human intervention. Retailers currently use a variety of technologies to provide value to their customers, which are detailed below.

Point of Sale (POS)

The point of sale (POS), sometimes known as the point of purchase (POP) or the checkout, is the spot where a transaction takes place. A "checkout" is the equivalent of an electronic cash register and refers to a POS terminal or, more broadly, the hardware and software used for checkouts. The term "point of sale" refers to a combination of point-of-sale hardware and software.

Point of Sale Hardware

Hardware is the most crucial aspect of current retail information technology. It includes all tangible items like as machinery, conveyer belts, pole displays, scanners, and weighing scales, among others. These devices cut down on the amount of time it takes to serve a customer.

A salesperson-accessible interface on a POS terminal oversees the selling process. The receipt can be created and printed using the same system. It is mostly used for two purposes:

  1. Efficiency in service delivery

  2. Collection of primary sales and customer data

Point of Sale Software

At the checkout counter, point-of-sale software conducts the basic operations of billing while also collecting sales and customer data. Sales, refunds, exchanges, layaways, gift cards, gift registries, customer loyalty programmes, BOGO (buy one, receive one), quantity discounts, and other customer-related operations are often handled by POS system software. Pre-planned promotional sales, manufacturer coupon validation, international currency management, and numerous payment forms are all possible with POS software.

Customer benefits from POS Software

Due to the different features that cater to all types of client needs, check-out times are decreased. Different forms of consumer difficulties, such as discounts, taxes, and sales returns, are handled by the system. This invoicing would take a lot longer if it were to be done manually. If a sale occurs, special invoicing is generated automatically. There is no protracted bureaucratic process if a consumer comes in with a gift coupon because the system recognises the gift voucher. There are no delays if a customer desires to pay with a credit card or in a foreign currency. If a customer decides to redeem his reward points, the system will make the necessary adjustments automatically. The touch screen enables for a quick preparation of the invoice.

Bar Coding System

A UPC bar code is printed on almost everything you buy from a store. Manufacturers and merchants use bar codes to keep track of inventories. They also provide useful information on the number of things purchased and, to a degree, the customers who purchased them. These codes are machine-readable parallel bars that store binary code and serve as product fingerprints.

Right now, if you check in your refrigerator or storeroom, you'll see that almost every package has a UPC bar code printed on it. Almost every item you buy at a grocery shop, department store, or mass merchandiser has a UPC bar code somewhere on it.

Advantages of Bar Code System

  1. Data collecting is faster and more precise with a barcode data collection system.

  2. Costs are reduced, and errors are reduced.

  3. When compared to a manual approach, inventory management is easier.

Disadvantages of Bar Code System

Bar codes, which were invented in the early 1970s to speed up the checkout process, have a few drawbacks:

  1. Companies must scan each bar code on every box of a specific product to keep track of inventories.

  2. The method of scanning each bar code on each item in the checkout line is the same.

  3. A bar code is a read-only technology, which means it cannot transmit data.

Radio Frequency Identification (RFID)

Because RFID tags can read and write data, they are a better option than bar codes. RFID tags can have their data modified, updated, and locked. RFID tags have proven to be a superior approach to track items for stocking and marketing purposes at some establishments that have started employing them. RFID technology appeals to retailers because it allows them to know the exact position and quantity of merchandise without having to undertake time-consuming counts. Due to faulty inventory data, most retailers are unable to determine the number of units of a certain stock-keeping unit available at a given store. According to a study of one large retailer, 65 percent of the stock keeping units in the store had erroneous inventory counts.

Benefits of RFID Technology to the Retailers

Retailers can enjoy the following benefits from RFID technology:

  1. Reduced Warehouse and Checkout Labor Costs: Inventory tracking labour expenses in warehouses, on shelves, and at checkout can all be greatly lowered.

  2. Inventory Savings: RFID lowers inventory errors, and retailers gain a better understanding of what was sold and what is needed by properly tracking components.

  3. Reduced Theft: Any product's exact position can be determined thanks to automated tracking.

  4. This helps to reduce theft in the warehouse, on the road, and in the store.

  5. Reduced Out-of-Stock Conditions: Forecasts are more accurate as a result of the automatic and fast product tracking, which lowers stock outs. Any shortage is immediately reported to the store managers, who will order replacements.

Impediments to the Adoption of RFID Technology

Due of the high cost of tags, RFID is a costly proposition. As a result, retailers have been slow to adopt it.

Benefits of BAR Coding and RFID Technologies to the Customer

  1. Because the business has automatic product tracking, there are fewer stock out situations.

  2. Any cost savings to the retailer help the customer since he gains by having things available at a lower price.

Q7) “India is a land of ‘unity in diversity’ which poses a great challenge to retailers.” Elaborate.

Ans) The diversity of cultures and social beliefs characterises the entire 'Indian society.' There are several states in India, each with its own religion, customs and traditions, languages, food and clothes, culture, and social values. Religion, language, culinary habits, and wardrobe preferences all have an impact on client behaviour in different states. Indians are proud of our "diversity in togetherness." The Indian retail industry is shaped by people's cultural diversity as well as regional distinctions. India is a place of 'unity in diversity,' which presents retailers with a significant problem. Because the perception of value sought from products and services changes between cultures, India's cultural and social diversity presents a problem for retailers.

A retailer's nightmare is figuring out and implementing marketing techniques that are acceptable to a variety of social, cultural, and regional needs. The most effective approach for retailers and an essential driver of retail innovation is to embrace diversity as a way of thinking. As a result, diversity must be elevated to the forefront of the value offer in order for it to become a branded aspect of how a store conducts business. India is a land of vast geographical variances and diverse physical features, in addition to cultural diversity. Mountain ranges, mountainous terrains, plains, plateaus, and coastal environments all exist. There are deserts and areas with very little rainfall. There are climate zones with extremes and moderates. Geographical characteristics such as climate, topography, temperature, distance from the sea, and others have an impact on customer wants and purchasing behaviour.

India is separated into five parts from a marketing standpoint: north, south, east, west, and central India. When we consider this division and consider each region separately, we think of diverse people with different cultures, as well as varied meteorological and physical conditions. The Himalayas, 'Heaven on Earth' Jammu and Kashmir, and the sturdy Punjab and Haryana are all pictures that come to mind when thinking of the northern region. Summers are scorching hot, while winters are bitterly frigid in this location. Each state has its own distinct culture, and clients have distinct desires. The demand for clothes, food, and white goods in this region differs from the rest of the country due to the harsh seasons. People's dietary habits are predominantly meat-based (due to the fact that they need to consume meat to stay warm). This region is exceptionally fertile, thanks to the effect of several rivers that originate in the Himalayas, and a variety of crops are grown here.

Because this area is hilly and has a harsh climate, constructing an appropriate distribution system is the most difficult task. Furthermore, because the inhabitants in these areas are larger than the average Indian, garment and footwear stores must carry larger-sized clothing and footwear. Aside from the aforementioned differences, there are variances in culinary habits, attitudes, corporate culture, religions (Hindus, Sikhs, Muslims), and so on that one encounters in this region. The southern region is characterised by a mild environment throughout the year and exceptionally hot summers, as well as extremely pious people who have grown economically while maintaining their culture. A common image of a south Indian woman is one who wears a Kanjeevaram saree and wears flowers in her hair and speaks English fluently. A dhoti or lungi is most likely worn by a south Indian male.

This region stands out not only for its culture, but also for its high level of literacy, economic success, and intellectual superiority over the rest of the country. Because the physical and cultural distinctions between the states that make up this region (Karnataka, Andhra Pradesh, Kerala, and Tamil Nadu) are not as great as they are in the northern region, marketing in this region is a little easier. Hinduism is practised by the majority of South Indians. Business culture is similar to that of the general public, and people have a common bond.

The western area includes India's economic superpowers, Maharashtra, and Gujarat, as well as Goa, the Paradise on Earth. People that live in this region enjoy a temperate climate. Mumbai, the country's commercial capital, is also located here. People in this region have a wide range of dietary habits from a marketing standpoint, but there is cultural homogeneity in this region, making marketing and retailing relatively simple. People's eating and dressing habits have been influenced by the hot and severe weather that exists in this region all year. India's north-eastern area is a lesser-known part of the country. It is known for its hilly terrain, dense woods, and a bitterly cold environment all year.

Sikkim, Arunachal Pradesh, Meghalaya, Assam, Tripura, Manipur, Mizoram, and Nagaland are the states that make up this Indian area. This region is not in the vanguard of the country's economic development, and therefore presents a challenge to the Indian government's economic development efforts. Many of these states are also embroiled in terrorist violence, making them inaccessible. Each state in this region is distinct from the rest of the country in terms of culture, language, culinary habits, language, dancing, and so on. A scorching temperature and plateaus characterise India's central region. The people and their culture blend in with the rest of the country, making it difficult to tell them apart.


Q8) What do you mean by Customer Value Expectations? Elaborate various determinants of the customer value expectations.

Ans) "Value is a customer's total appraisal of a product's utility based on their perspective of what they receive and contribute." Customer value expectations refers to a customer's overall expectations of a product that he or she is willing to purchase. A mix of product and/or service benefits (performance, reliability, responsiveness, and competency) at a reasonable price can be termed as total expectations. Customers, on the whole, want the highest-quality product/service at the lowest feasible price, delivered as promptly and easily as possible. This entire understanding can be summed up in the following equation:

Customer Value Expectation=Highest Quality+ Lowest Price+ Quick Service

As a result, we can say that when the quality of a product or service is combined with rapid and convenient services at a reasonable price, it becomes the customer's whole expectation. Customer expectations can be of two types: Expressed customer expectations and Implied customer expectations.

Determinants of Customer Value

Customer value expectations are influenced by a number of things. Customers' value expectations are referred to as determinants of customer value expectations. Understanding the drivers that shape customers' value expectations is critical for marketers. Personal needs such as conventions, values, learning ability, personality, and life style influence these expectations. Customers' value expectations will be shaped by factors such as reference groups and family influence. The factors are described as follows in Rong Liu's work "Dynamic Impact Factors of Customer Lifetime Value: An Empirical Study of Mzone":

Customers Related Factors

Customer-related elements are linked to the customer's own personality and attitude. These are features of the customer's own independent decision, which the company cannot influence. In order to boost Customer Lifetime Value, businesses should better understand and predict the elements that drive customer value, as well as make better use of customer-related factors (CLV).

Enterprise Related Factors

Factors that are relevant to the business are factors that are unique to the business. Such variables are inextricably linked to the image of a company's ability, and they have an impact on customers' purchasing decisions. To boost customer happiness and loyalty, businesses should perfect enterprise-related aspects, and then increase CLV.

Customer-enterprise Relationship Related Factors

Customer-enterprise relationship-related aspects refer to the relationship that exists between customers and businesses, as well as the interaction that occurs between the two. Enterprises can control and change the relationship between the impact elements.

Social Environmental Related Factors

Environmentally connected social issues are linked to the community, which has a large impact on the environment. Enterprises are unable or unwilling to control these aspects, therefore they must be aware of the overall status of the environment, adapt, and use it to improve CLV. These social environmental elements can also be divided into three groups.

The following are the details:

Social and Cultural Factors

  1. Culture is a set of values, ideas, artefacts, and other important symbols that assist individuals in communicating, interpreting, and evaluating their roles as members of society. Culture is defined as a blueprint for human activity that establishes the coordinates of social and productive activity.

  2. Culture is one of the most important factors in determining a person's desires and expectations. Through his family and other important social institutions, a developing youngster develops a set of values, perceptions, preferences, and behaviour.

  3. Humans are supposed to be a social animal, and their expectations are heavily impacted by their surroundings. In varied ways, social and cultural factors influence customer expectations. For some items, the impact of these characteristics is obvious, while for others, it is not.

  4. Cultural factors include who in the family makes the purchasing decision (male or female), and whether an individual need or a group desire is being met. Nationality, religion, race, and other variables are also considered.

  5. Family (economic status, function of decision maker, his status in the family / group), social status, reference and social groups, occupation, and so on are all social determinants.

The following are examples of social and cultural factors:

  1. Reference Groups: Every customer belongs to a number of organisations and associations. He interacts with his peers, which creates an impression on him and shapes his day-to-day existence, as well as his expectations.

  2. Family: Family members have a deep link and frequent, personal interaction, and thus family members have a significant influence on individual expectations.

  3. Social Status: Every person has a social status, which has a significant impact on their purchasing decisions. Customers' expectations are frequently shaped by their socioeconomic class's attitude and beliefs.

Personal Factors

Personal or individual qualities also influence customer expectations.

It is the individual and his or her personal choice that determines what he or she desires and purchases. Age, marriage, personality, wealth, occupation, life style, and family structure all have a significant impact on a customer's buying decision or expectations. When it comes to recurring purchases, age is a big role. The younger generation embraces change and enjoys trying with various goods. Gender, occupation, and other factors influence customer expectations.

Personal factors include the following:

  1. Age and Life Cycle Stage: Over the course of their lives, customers change the items and services they purchase. The needs and interests of people vary a lot depending on their age and stage in life. Clothing and recreation choices, for example, are both age-related.

  2. Occupation: The individual's occupation has an impact on his choices and expectations. Drivers and technicians, for example, may earn the same as a young corporate executive or a teacher, but their purchasing habits are likely to differ.

  3. Income and Life style: Customers' expectations are, of course, influenced by purchasing power. Customers must spend money in order to achieve the necessary level of satisfaction. People from the same culture, occupation, and socioeconomic status may live in very different ways.

The demands and goals of each type of lifestyle are distinct, and this influences individual market expectations.

Physiological Factors

Customers' value expectations are also shaped by physiological variables. Expectations are also influenced by the buyer's physical state and structure. For example, a pregnant woman's clothing, nutrition, and other needs differ from those of a non-pregnant woman. Adult consumption differs significantly from that of new-borns and school-aged children. Physiological demands are determined by aspects such as health, food, water, and sleep, all of which are related to our body's health and upkeep. This is a critical issue because the person and family's demands, as well as their health, must be met.

When a client seeks value from a product that meets his physiological needs, the amount of value desired by the customer is enormous. Medicines, bottled water, skin and hair care goods, alternative medicines (such as branded ayurveda products), health foods, organic foods, and a variety of other products are examples of products that meet physiological demands. A client places entire trust in the product he or she is using, based on advertising, personal experiences, or the experiences of others. Customer value satisfaction is extremely important for services such as pathological labs, recognised doctors, and diagnostic services. This is due to the fact that they diagnose and treat illness, as well as carrying the enormous responsibility of human life.

Aside from the elements mentioned above, there are a number of other factors that influence customers' purchasing decisions and, as a result, their expectations.

  1. Finished product (its utility and benefits).

  2. Price (value obtained from the consideration paid): A consumer is continuously looking for ways to get more value for their money. When it comes to purchasing, value for money is really crucial.

  3. Product life in comparison to its cost: How long will the product be utilised to get the best price?

  4. Customer service (both in-store and after-sale): Customers want rapid and convenient service. Customers like and prefer businesses that provide them with rapid and easy services.

  5. After purchasing a product, a person's social status is determined by the brand they choose.

Q9) What do you understand by the term Service Quality? Briefly describe the gaps model and explain the significance of the five gaps that the model identifies.

Ans) 'Service Quality' has been defined in a variety of ways. Some of the definitions are listed below:

  1. The level of disagreement between customers' expectations or wishes and their perception of service quality can be defined as "the extent of divergence between customers' expectations or desires and their perception."

  2. Quality is defined as what customers think it is, and the quality of a specific product or service is defined as what the customer believes it is.

  3. The delivery of exceptional or superior service in relation to client expectations is referred to as service quality.

  4. The customer's perception of service quality is based on a comparison of the customer's expectations and his real-life experiences.

All of these definitions revolve on the fact that service quality is primarily determined by how customers perceive it. All other assessments are irrelevant; only customers judge quality. As a result, the ultimate goal of a high-quality service system is to meet the needs of clients and go above and beyond to delight them. For 'Service Quality,' the ideas and techniques that apply to goods quality are insufficient. This is due to some fundamental disparities in the production, use, and evaluation of products and services.

Gaps Model

PZB (Parasuraman, Zeithaml, and Berry) have done a lot of work on service quality. Perceived Service Quality, according to them, is defined as the difference between customers' expectations or wishes and their perceptions.

Perceived Service Quality = Perceived Service - Expected Service, to put it another way.

Based on their research, they discovered that customers evaluate service quality along five aspects, as listed below:

  1. Reliability : Ability to provide a dependable and precise service as promised (example: flights depart and arrive on schedule).

  2. Responsiveness : Willingness to assist clients and deliver quick service (example: no waiting’s at the hospital).

  3. Assurance : Knowledge and civility of employees, as well as their capacity to inspire trust and confidence. (For instance, knowledgeable mechanics at an auto repair shop).

  4. Empathy : Customers are given caring, customised care (for example, a certain sort of accommodation is provided to the client depending on his past stay, and the customer is addressed by name).

  5. Tangibles : Physical facilities, equipment, employees, and written materials (for example, at a theatre, seating, and air conditioning).

Reliability is regarded as the most crucial of the five dimensions. It refers to the company's ability to follow through on its promises. In a competitive market, a company's ability to be dependable is critical in attracting client loyalty. In the event of services believed to have high risk by clients or services with strong credibility qualities, such as health services, the assurance factor is likely to be very important. New clients may place a high value on tangibles when judging service quality, especially when other indicators are unavailable. A store can make a consumer feel unique and special by focusing on empathy, whereas the responsiveness component emphasises promptness in responding to customer requests, complaints, or difficulties.

PZB also concentrated on identifying company flaws that lead to poor consumer perceptions of quality. The following are the reasons for the gap between consumers' views and expectations:

Provider Gap1 : Not Knowing what Customers Expect: The disparity between customer service expectations and the company's comprehension of these expectations is known as the service gap. Executives at service firms may not always understand in advance what features customers associate with high quality, what features a service must have to meet customer needs, and what levels of performance on those features are required to give high quality service.

Provider Gap 2 : Not Selecting the Right Service Designs and Standards: Although a corporation may correctly comprehend its consumers' needs, it may fail to create a performance standard. This might happen when management considers that customer expectations are unrealistic or unreasonable. Other variables, such as resource limits, market conditions, and/or managerial indifference, may also contribute to a disconnect between the company's perception of customer expectations and the actual service specification.

Provider Gap 3: Not Delivering the Service Standards: The discrepancy between service quality specifications and actual service delivery is known as the service quality gap. Even if customer-driven service standards are in place, high-quality service delivery is not guaranteed. The fundamental cause of this discrepancy is human engagement in service delivery, particularly in the function of contact staff. It's difficult to maintain consistent quality due to the wide range of staff performance. Failure to balance demand and supply, customers failing to fulfil their responsibilities, and issues with service intermediaries could all contribute to the gap.

Provider Gap 4: Not Matching Performance to Promise: This is essentially a disconnect between what you give and how you communicate with the outside world. Customer expectations can be influenced by a company's media advertising and other forms of communication. As a result, a corporation must be careful not to make promises through communication that it cannot keep. When you promise more than you can provide, it raises early expectations but lowers the perception of quality when you don't deliver.

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