| Customer Loyalty and Brand Management |
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While admittedly observational in nature, it can be argued that marketing as a science has largely focused on brand-centric objectives. This preoccupation has only recently been challenged by the popularization of customer-centric agendas introduced by customer satisfaction audits and customer needs/requirements studies. You can donwload excellent powerpoint slides on marketing management and business strategy here. Simplistically, brand-centric marketing can be thought of as manipulating the elements of the marketing mix (commonly referred to as the "Four Ps": product, price, promotion; and place) to improve the status or health of a brand (a condition commonly summarized in the concept of "brand equity"). The ultimate goal of such efforts is to enhance the bundle of benefits offered by a firm's product or service in comparison to competing alternatives. As the firm's offer surpasses competition, it is assumed market share will follow. In contrast, customer-centric marketing (the newer perspective) largely focuses on efforts to improve customers' perceptions of their experiences in using an organization's products or services, and in relating to the organization itself. Customer-centric strategies tend to focus on improving customers' levels of satisfaction with the product and with the customer experience. The goal of these efforts is to lengthen customer lifetimes and to increase customers' lifetime profits through increased spending. In opposition to brand-centric marketing's focus on attracting more customers (conquest marketing), customer-centric marketing is aimed largely at reducing customer defection and strengthening current customers' loyalty (retention marketing). While both brand-centric and customer-centric approaches are ultimately aimed at manipulating customers' attitudes and behaviors, managers and researchers tend to isolate these functions. For example, in most firms, brand management efforts are usually considered separately from satisfaction management efforts, and are frequently the responsibilities of different departments within the organization. Similarly, specialized scholarly journals have evolved for researchers dedicated to the focus of either brand-specific or customer-specific issues. We believe it is time for businesses to adopt a holistic approach by combining the power of the brand with the power of the customer. This approach has been given a voice in a recent theory in which the personal identification of a customer with a brand is differentiated from a customer's relationship with the brand's manufacturer. In their book Driving Customer Equity, researchers Rust, Zeithaml, and Lemon define the new construct of customer equity by incorporating both brand-centric and customer-centric marketing activities. Customer equity, according to Rust et al., includes:
• Value equity—the customer's objective assessment of the utility of a brand. This assessment is driven by the product's quality, price, and convenience. The components of customer equity are key drivers of a firm's efforts to improve customers' CLV.. But as they span both conquest and retention marketing efforts, they require an integrated, singularly managed approach.
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