What Is Marketing

In: Business and Management

Submitted By chubak
Words 1376
Pages 6
Problem Set 1: What is marketing?

1.) Lifetime value of a customer.
Nowadays, most successful companies heavily focus on building strong customer relationships with their customers in order to get their satisfaction and customer delight. This becomes one of the main strategies of companies because it has a huge impact on the whole success and future well-being of the company. Satisfied customers will be loyal toward the company’s products and services and they will promote them to others. That’s why companies strive to satisfy every customer that gets in their stores. According to the chapter 1 of the reading “Principles of Marketing” losing a customer means losing more than a single sale. Here comes a term customer lifetime value, which means losing one customer can bring negative impact on the entire stream of purchases that the customer would make over a lifetime of patronage. By other words, it is expected profit from customer over time. The usual customer goes to stores during his/ her whole life cycle in order to satisfy his/ her needs and wants and that’s why it is very important to get the customer’s satisfaction and delight. Example. Let’s say you satisfy needs and wants of one single customer that gets in your store. The company can be sure that customer will come back again to shop in their store. He will be coming back again and again and the company will enjoy customer satisfaction and loyalty during the life cycle of that customer. So, company will be getting profits because once it satisfied needs and wants of a single customer. There is a vivid example of Stew Leonard, who operates a highly profitable four-store supermarket in Connecticut and New York. In that example an average customer spends about $100 a week, shops 50weeks a year, and remains in the area for about 10 years. If this customer has an unhappy experience and switches to…...

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