If you are looking for BRL-013 IGNOU Solved Assignment solution for the subject Customer Value Management, you have come to the right place. BRL-013 solution on this page applies to 2022-23 session students studying in BBARL courses of IGNOU.
BRL-013 Solved Assignment Solution by Gyaniversity
Assignment Code: BRL-13/TMA/2022-2023
Course Code: BRL-013
Assignment Name: Customer Value Management
Verification Status: Verified by Professor
Attempt all the questions:
(A) Short Type Questions: 10x7
Q1) What do you mean by customer value management? Why is CVM required in retail?
Ans) Understanding consumers' expectations of the company, analysing customers' value, and effectively meeting those expectations results in satisfied customers, who are essential to the company's success.
According to Khalid and Scott, customer value management is a methodical strategy to:
Recognise the factors that influence client buy and repurchase behaviour.
Predict future consumer and potential customer purchasing patterns.
By controlling the predictors, future buying behaviour can be maximised.
It is a procedure that helps companies to assess how well they meet the needs, expectations, and perceptions of distributors, end users, and potential and direct customers. It also entails researching the techniques/strategies used by rivals to institutionalise CVM.
Customer value management is a tool used to manage each customer's interaction with a company in order to maximise lifetime profit from the total customer base. This makes it possible for businesses to keep and gain the loyalty of their clients. It is incredibly economical to keep clients. Comparatively speaking, acquiring new consumers is more expensive than keeping the ones you already have.
Requirement of CVM in Retail
Understanding the various customer needs that reflect the corresponding customer value dimensions in the retail context requires CVM. The four main categories of customer wants are utilitarian, esteem, experience, and economic. The hunt for goods that address consumption-related issues is driven by functional demands. Esteem needs are the demands for things that satisfy internal needs for ego identification, role position, group participation, or self-improvement.
Desires for goods that offer sensory pleasure, variety, or mental stimulation are known as experiential needs. Fundamentally, economic demands must take into account the least expensive solutions on the market. The necessity of CVM in retail is therefore necessary given the foregoing collection of varied needs.
CVM is specifically needed in retail for two reasons:
Which store is taken into account in the consumer preference set.
To comprehend the factors that influence consumer value.
Customers may not choose a store for shopping if the perceived value is less than the threshold value granted. Customers' preference for a retail store depends on the threshold value assigned by the customer. The needs of the client are related to both the threshold value and perceived value.
Q2) What is culture? How does it affect customer behaviour?
Ans) A society's collective knowledge, beliefs, aesthetics, rules, morals, practises, capacities, and values are collectively referred to as its culture. From a retail standpoint, culture affects consumer choices, behaviour, and societal norms. Culture creates a framework within which someone thinks and acts. He is said to be under cross-cultural influence and to display cross-cultural behaviour when he acts outside of these cultural limits.
The mix of cultures and social values that make up "Indian society" as a whole. The numerous states that make up the vast diversity of India are diverse in terms of their social values, food and clothes, languages, customs and traditions, and religion. The influence of language, culinary preferences, religion, and other factors distinguishes the customer behaviour of one state from that of another. India takes great pride in its "unity in variety."
It's intriguing to research cultural variations that cause customers to act in odd ways. However, retailers find it extremely difficult to comprehend and manage variety within a single nation. Numerous instances can be given to illustrate how cultural variety affects consumer behaviour.
Among them are:
Traditional women's clothing varies by culture; in some, a saree is worn, while in others, a salwar-kameez is.
Women are expected to cover their heads with a dupatta in some cultures, such as the northern states of India, but in many urban areas, the salwar-kameez has taken on a more contemporary and useful form and is worn as more of a utilitarian work outfit without a dupatta.
While some societies have long practised vegetarianism, others do not. Another illustration of how to manage customer value is regional preferences for particular meals. How many cold-cut and frozen meat retail stores are there in Gujarat?
In their food retailing networks, some merchants, like Reliance, have adopted a highly deliberate approach to selling. As a result, they have developed a unique brand of stores called Delight that offer meat. They are distinct stores with their own entrances, although they are connected to the main Reliance store. This makes it possible to easily meet the needs of both vegetarians and non-vegetarians. This is a result of the cultural issue where vegetarians prefer to shop at establishments that only carry vegetarian fare.
Some Indian communities have been greatly impacted by western eating and dressing customs. While people in South India continue to adhere steadfastly to their traditional diet and attire.
Hindus consider the cow to be the holiest animal, hence even though the majority of Hindus are vegetarians, those who eat meat refrain from eating beef. In order to promote chicken and vegetarian burgers and meal alternatives in India, McDonald's had to alter their usual worldwide beef burgers. McDonald has expanded its vegetarian menu in India beyond veggie burgers.
Q3) What do you mean by Service Quality? Briefly explain the factors influencing service quality.
Ans) Different definitions have been offered for the term "service quality." The following are a few definitions:
The degree of difference between customers' expectations or wants and their perception can be characterised as the service quality as perceived by the customer.
The quality of a given product or service is whatever the customer believes it to be, and quality is whatever customers claim it to be.
The provision of exceptional or superior service in comparison to client expectations is referred to as service quality.
The customer's perception of a service's quality is the outcome of a comparison between his expectations and his actual experiences.
All other assessments are meaningless because only customers can evaluate quality. Therefore, the ultimate goal of a top-notch service quality system is to fulfil client needs and go above and beyond to make them happy. For "Service Quality," the rules and guidelines that apply to goods quality are insufficient. This is due to several fundamental distinctions between goods and services in terms of how they are created, used, and assessed.
Factors Influencing Service Quality
When a customer must choose between many retailers, service quality is a crucial factor. High service standards foster patron loyalty and happiness. As a result, a long-term partnership develops. Customers will search for alternatives if the service is of poor quality. The two main factors that affect service quality are as follows:
External Factors to Customers Influencing Service Quality
Word of Mouth: Based on what they hear from others, customers form expectations about the quality of the service. They will pick up advice from others and form their own expectations of the store. Customers will anticipate as such if a friend informs them that the service in a retail establishment is average and the checkout process is slow.
External Communications: The retailer's entire external communications influence the anticipated level of service quality. Customers will assume that a store will replace any defective item without asking any questions if it makes that assurance. With this mindset, he will buy items. But he will be unhappy and have lower expectations of the store if it breaks its promise and disputes his request to return a defective item.
Situational Factors: Depending on the type of store one is visiting; different levels of service expectations will likewise exist. In comparison to a high fashion store, where a consumer could anticipate highly personalised treatment, a self-service or supermarket store may have significantly lower service expectations.
Internal Factors to Customers Influencing Service Quality
Past Experience: If a consumer had a positive experience with a salesperson during past visits to the business, he or she will always remember that experience and expect the same level of friendliness on each subsequent visit. Our degree of expectations is significantly influenced by our prior encounters in the store.
Personal Needs: Any person who goes to a store has personal needs. These requirements could be as straightforward as the desire to buy something and go right away. He can feel the need because he wants to stand out and receive special treatment like a valued guest. Individuals will have different needs.
Q4) What are the direct and indirect tools of customer value communication?
Ans) Building strong relationships with clients is central to the functional role of communication in marketing. There are various ways available to effectively communicate the value to their target consumers in order to develop a strong relationship with them and convey value. As follows:
Direct Advertising Tools
Retailers try to reach their target customers directly with their message by using these techniques to communicate value. Under direct advertising tools, the following items are available:
Personal Selling: It is both the most efficient and expensive form of communication. It works well because it interacts with clients face-to-face. During oral presentations during conversations with consumers, salespeople direct their message with the intention of closing deals.
Advertising: It is an impersonal way for retailers to provide information about ideas, products, or services to potential customers.
Sales Promotion: Sales promotion includes communication tactics like discounts on purchases of goods or services, deals like "buy one, get one free," etc. that encourage consumer spending and store effectiveness. It establishes a crucial connection between advertising and personal selling.
Indirect Marketing Tools
To convey value to customers, retailers employ the following strategies under indirect marketing:
Public Relations: It is the public relations and communication efforts of a company. Programs for public relations may be formal or informal in nature. Due to its distinctive communication style, it is a crucial technique of contacting customers. Every business strives to build positive public relations in order to gain favourable publicity.
Exhibitions and Trade Fairs: Businesses occasionally utilise exhibits and trade shows to present their products and services to clients in order to convey value. This encourages customers to make purchases and forges relationships with the company. The obstacles of the competition are typically met using these technologies.
Internet: Businesses can now communicate value to clients through the internet thanks to recent advancements in information technology and consumer knowledge of goods and services. The Internet is a network of networks where individuals from all over the world can connect and exchange information.
Corporate Identity: It is also a very effective method for conveying value. By carrying out its social responsibilities, a business can quickly establish a positive reputation in the community, which facilitates the development of customer relationships and makes it simpler for the business to convey the values it seeks to convey.
Others such as packaging, point-of-sale, merchandising and word of mouth: In addition to the methods described above, retailers also utilise other tools to connect with customers, such as information at the point of sale, appealing packaging with product and company information, etc.
Q5) Define customer value generation process.
Ans) Customer knowledge is the information about goods and services that customers have in their heads and that influences their decisions to buy, use, and discard goods. Customer knowledge, put simply, refers to all that customers are aware of regarding the goods or services. Businesses benefit much from marketer-managed consumer information in the ways outlined above. By managing customer information, businesses can easily supply the products that customers want and expect, which ultimately attracts, retains, and grows new customers.
Every organisation should use knowledge management because of the following advantages:
It makes it simple for firms to position their goods in buyers' minds.
Businesses can discover the barriers to purchasing using knowledge management.
It assists in meeting the needs and expectations of the customers.
It aids in managing possible dangers that rivals may offer to their current consumer base.
It improves consumer acquisition and retention.
A variety of tactics and methods are employed in knowledge management to locate, produce, depict, disseminate, and facilitate the adoption of ideas and experiences inside a company. These knowledge-containing insights and experiences are either embodied in people or are ingrained in organisational procedures or practise.
In contrast to customer relationship managers, who prioritise knowledge about the customer, customer knowledge managers prioritise knowledge from the customer. In other words, clever businesses recognise that their corporate clients are more informed than they might initially appear to be, and as a result, they actively seek information from both their sales personnel and direct interactions with clients. Customer data collected from multiple sources must be effectively integrated in order to produce data that can be used to generate knowledge about customer value.
Q6) What are the stages of service recovery process?
Ans) There are various steps to the process of service recovery. Typically, there are five steps involved. Identification of service failure comes first. The main way to find out about service problems is through customer complaints. Customer complaints are then received and recorded for all elements of the service. The issue is then carefully examined to identify the precise problem area. Service failures are categorised into different groups for this reason. This necessitates determining if the failure was functional, technological, or a combination of both. Customers are given the proper remedy based on their particular problem, and then a feedback analysis is done.
Stages in Service Recovery Process
1) Identify Service Problem: Finding the source of the service failure is the first step in the service recovery process. Any type of problem could exist, such as long checkout lines that upset customers, inadequate sales support, etc.
2) Problem Analysis: When a store recognises a problem, the following step is to accept responsibility for the error, which will increase consumer happiness.
3) Classify Service Problems: The next step is to categorise service issues so that they can be fixed. Studying data can aid in identifying genuine issues, and service issues can take the following forms:
i) Technical Failures: These problems are like:
a) POS computer is not working at optimum speed.
b) POS software is not well designed, hence reducing the speed.
c) There may not be sufficient POS terminals to handle the peak hours, say on weekends.
ii) Human Failures: The retail clerk is working inefficiently
a) He may not be well trained on the software.
b) He may be working on the computer as well as packing items himself.
4) Providing Solution to the Problems: after classification of service problems, it is very important to address those service issues to improve the service and to avoid further failures. Address can also be of two types:
i) Human: Training of retail clerk and having a minimum standard of excellence.
a) Repairing/upgrading hardware or software issues.
b) Increasing the number of POS terminals to accommodate peak traffic.
5) Customer Feedback Analysis: The next step is to obtain customers feedback to ensure that their problems have been addressed.
Q7) What are the difference between customers exportations and customers perception.
Ans) There is no such thing as a free lunch in business. Every action has an associated anticipation of certain favourable outcomes. A company's success is its ultimate objective. The perception that customers have of the firm, its goods, and services is crucial to the success of any business. As we've already mentioned, what matters more is how a consumer views the company's efforts than the actual quality of what it actually provides. Positive perception suggests that customers' expectations are met to a significant extent. Positive customer perception has a number of advantages, including:
Develop and improve customer relationships
Increase new and repeat sales
Improve the market share
Positive company image
High quality customer referrals
On the other hand, disgruntled or dissatisfied clients can hurt the business on a number of levels, including lost sales, a bad reputation for the brand, and missed recommendations, among other things. It is crucial to win over clients' favourable perceptions, which is not always simple. There are various measures that must be taken.
Steps to gaining a favourable opinion from customers:
Survey the Customers to find their Current Level of Satisfaction: First and foremost, it's critical to understand the present level of consumer satisfaction. While a consumer is shopping, brief questionnaires in the form of pamphlets are frequently handed in retail establishments. These are known as feedback forms. The main goal is to close any gaps between the services provided and what customers expect in order to maintain favourable perception.
Assess the Positive Value of the Benefits Already Delivered: This step is to evaluate the delivery's worth, which includes the products and/or services.
Create a Value Proposition: It's crucial to develop a value proposition in order to explain how products and/or services differ from those of the competition. Businesses must identify a special trait or advantage of the product that sets it apart.
(B) Essay Type Questions: (15x2)
Q8) What is customer loyalty? Classify customers on the basis of needs, nature, and expectations.
Ans) Customers who are loyal to a company are unquestionably a great asset. It is less expensive to keep an existing customer than to acquire new ones. Existing clients are familiar with the company, and the company is familiar with them as well, making it easier to offer them customised services. Consequently, it becomes crucial for firms to build consumer loyalty. The phrase "customer loyalty" describes the actions of returning consumers who promote a good word of mouth campaign for a good or service. They assist the company in growing its customer base by bringing in additional clients along the process. A company rarely receives devoted customers without having to pay for them.
In actuality, the companies must gain the patrons' loyalty. These actions might be categorised as a procedure or a programme to maintain client satisfaction. Customer loyalty can be defined as the combination of feelings and attitudes that lead customers to think about making a second purchase of a specific good, service, or brand or returning to a specific company. Having a sizable number of devoted consumers is the primary factor in business success. They show their allegiance to the entire line of products and services offered by the company, not just to that single one.
By providing a superior product with a strong guarantee, one can win the loyalty of their customers. Other than having high-quality products, companies can win customers' trust by providing them with freebies, discounts, extended warranties, rebates, and other incentives. All these deals make people happy, and they come back to make more purchases and convince others to do the same, which helps the company turn a profit.
The following are some additional incentives that retailers employ to reward loyal customers:
Maintaining constant contact with customers through emails, SMSs, thank you cards, etc.
Educating employees on how to treat consumers in a way that they desire.
Demonstrating sincere consideration for the preferences of the clientele.
Rewarding clients for selecting their goods over that of their rivals.
Simply put, companies increase customer loyalty by treating customers the way that they would like to be treated. For this, the marketing plan should incorporate techniques and methods for retaining customers. A thorough explanation of client loyalty and methods for obtaining it
Five Main Types of Customers
Customers in the retail sector can be divided into five categories:
Loyal Customers: Any business should put its loyal clients first because they are the most crucial group to please. Although they typically make up no more than 20% of a company's total clientele, these clients generate the majority of sales revenue. Customers who are loyal appreciate a product highly, as the name suggests.
Impulse Customers: The best consumers to upsell to are impulse buyers, who are also the second most alluring market to target. Impulse buyers make purchases on the spur of the moment without a predetermined shopping plan in mind. Additionally, impulse buyers are frequently open to product recommendations.
Discount Customers: Discount clients are crucial to the turnover of a business's inventory. As a result, discount clients play a significant role in a company's cash flow. This kind of buyer looks around for the best sales and rarely pays full price for things.
Need-Based Customers: Customers that buy based on need do so for a specific reason. In other words, they rapidly enter the store, make their purchases, and then exit. These clients are difficult to upsell to since they buy for a specific purpose or event. It is significant to notice that clients with needs can easily be attracted to other businesses.
Wandering Customers: Wandering clients bring in the most business while contributing the least in terms of sales revenue. They are drawn to the firm more so because of its location than because they have any particular needs or desires. These customers take pleasure in the camaraderie of shopping.
Q9) What is Internet retailing? What are the advantages of purchasing on the internet?
Ans) Internet retailing, which allows people to buy things without physically visiting a store, is a new trend that has rapidly caught up with the growth of the internet. There are retailers who operate both a physical and a virtual store in the context of online retail.
Advantages of Purchasing on the Internet
Superior Information: Retailers typically make more information available online than they do through store or catalogue channels. This knowledge may go beyond what is offered in a catalogue. This is always being updated and is accessible 365 days a year. The salesperson in a store isn't always up to speed on all the pertinent information about the desired item. Making a buying selection may be possible with the extensive information available online.
Broader Selection: To make a decision, customers can browse the inventory of numerous merchants. You can browse the prices and product details of various brands. In comparison to a store, the customer has more options in terms of colours, brands, and sizes. Customers are no longer restricted to a store in their hometown and can now choose stores in other towns and nations.
Formatted Information: Customers can access information in a tabular manner that compares competitor brands' features one by one. At contrast, shoppers in stores must examine a single brand and recall many characteristics in order to compare products.
Virtual Community Networking Sites: These websites assist clients in gathering viewpoints from other customers so they can build informed opinions. There are additional websites for different online communities, including ones for pregnant women. The website provides options for chat as well as guidance for expectant mothers. Pregnant women's various medications, clothes, and books would be discussed, and personal experiences would be shared.
Personalisation: Based on their prior purchasing behaviour, clients can receive personalised offers. For instance, based on previous purchases, Amazon builds a bespoke home page for each customer with details about books and products they might be interested in. Additionally, they receive personalised emails notifying them of any new books by their preferred authors. Amazon also suggests supplementary goods.
Selling Merchandise with Touch and Feel Attributes: When a customer enters a store, he "looks" to enjoy the colour and style of the clothing. Similarly, physical "touch and feel" is used to experience how food tastes, perfume scents, and clothing fits.
These touch and feel qualities are challenging to reproduce online. This is a significant distinction between shopping in-person and online. As a result, customers choose to purchase well-known brands online rather than new products. They are certain of the consistency of the product's quality and confidence in it. Online retailers are increasingly converting touch-and-feel information into look-and-see information utilising technology.
With the use of 3D imagery and/or zoom technology, products may now be examined from many angles and perspectives. Conversion rates have gone up since these technologies have been used. Clothing companies have begun employing virtual models to get around the difficulties of trying on garments. Online customers can rotate a mannequin that closely resembles them to assess how the clothing fits.
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