Customer Centricity

MEDITERRANEAN SCHOOL OF BUSINESS
PROGRAM: MBM PT
COURSE: MARKETING
PROFESSOR: Salma-Ines Daou
TERM: Spring 2021
1
Customer-Centricity
&
Value Management
Section 1:
CUSTOMER-CENTRIC
MARKETING MANAGEMENT
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3 poor common assumptions
> Companies build strong relationships > Customers want to build relationships on
with customers their OWN terms
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Getting the information from other consumers Interacting with companies digitally
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> Companies create value for > Customers look for companies to implement
customers their OWN ideas
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What’s the job
to be done?
They just need to
> Companies build strong relationships > Customers want get
to build relationships
things done on
Ted Levitt
> Companies define the offer they > Customers use the product in their OWN
create way
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What’s the job
to be done?
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Specific demographic and personality characteristics of
frequent milk shake-buyers.
Target invited to evaluate thicker, more chocolaty,

cheaper, and chunkier shakes.
Clear feedback, but no impact on sales
10
When each milk shake was bought?
What other products the customers Whether they consumed the shake on the
purchased? premises or drove off with it?
Whether these consumers were alone or

with a group?
11
of all milk shakes were purchased in the early
morning.
> Early-morning customers were alone
> They did not buy anything else
> They consumed their shakes in their

cars
I face a long, boring What caused
commute and need you to hire a
something to make the drive milk shake?
more interesting. I’m not yet
hungry but I know that I’ll be Tell me about a time when
by 10 am; I want to
you were in the same
consume something now
situation but you didn’t buy
that would stave off hunger
until noon. My constraints:
a milk shake. What did you
I’m in a hurry, I’m wearing buy instead?
work clothes, and I have (at
most) one free hand.
Bagel Banana Doughnuts
> Too dry > Does not last long enough to > Does not carry people past the
> sticky fingers and gooey steering wheels solve the boring-commute ... 10 am hunger attack
13
> 20 minutes to suck the viscous milk shake through the thin straw, addressing the
boring-commute problem.
> Consume it cleanly with one hand
> By 10:00, they felt less hungry than when they tried the alternatives.
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How could they tackle the boring-commute job?
> Make the milk shake even thicker to last longer
> Swirl in chunks of fruit, adding a dimension of

unpredictability and anticipation to the monotonous
morning routine. The company’s milk shakes would gain share
against the real competition—not just
> Moving the dispensing machine in front of the counter competing chains’ milk shakes but bananas,
boredom, and bagels.
> Selling customers a prepaid swipe card so they could
dash in, “gas up,” and go without getting stuck in the
drive-through lane
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Parents buy milk shakes, in addition to
complete meals, for their children
They were exhausted from

repeatedly having to say “no” to their
kids
They hired milk shakes as an innocuous way to placate their

children and feel like loving parents.
What’s the job
to be done?
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What’s the job
to be done?
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> Companies define the offer they > Customers use the product in their OWN
create way
Companies do the business Customers define the business
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ARISTOTLE TRIANGLE COPERNICAN REVOLUTION
Focusing on the ‘job to be done’ (benefits

Focusing on the product (features and
and solution)
functunalities)
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Customer-Centricity Defined
Aligning the resources of your organization to effectively respond to the ever

changing needs of the customers while building mutually profitable relationship
Jay (2005) and Ron (2006)
Those organizations which consist of structure, business processes, management

practice, reward systems and human resources procedures, that are aligned
around the customer’s needs and expectations.
Ron (2006)
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Customer-Centric Management Culture
Integrative CRM
> Using databases for immediate
execution, measurement and
optimization
Internal Integration
> Focusing on the core segments
with more targeted and > Top manager emotionally
accurate actions connected to customers
> Interdepartment & Inter-firm
CONSTOMER
connection & trust
CENTRICITY > Employee Empowerment &
Reward Systems
Customer Integration
Supply Chain Integration
> Crowdsourcing platforms
> Co-creation > Reliable and trustworthy
partners
> Rewarding & sharing profits
> More effectiveness in providing
> Customer lifetime value &
combined suitable solutions
equity
> Cost reduction & effeciency
« Customer is number two,
employee is number one »
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Integrative CRM
optimization
CONSTOMER
connection & trust
Reward Systems
partners
> Connecting customers within
interest exchange plateforms
Integrative CRM
optimization
CONSTOMER
connection & trust
Reward Systems
partners
> In 2009, the ice-cream maker launched a
campaign called “Do The World A Flavor.”
> Fans participated in a contest of designing new ice

cream flavors (website and the social media).
> Customers could pick a base flavor, put chunks,

add swirls, and create a name for the final product.
> The winners of the contest had their ice cream

invention featured in Ben & Jerry’s scoop shops the
next year.
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Crowdsourcing ideas to co-create a
better everyday life
> Asking customers for product idea suggestions
> Running IKEA Bootcamps to work with
entrepreneurs
> Collaborating with university students on product
solutions
> Connecting with innovation labs around the world
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Integrative CRM
optimization
CONSTOMER
connection & trust
Reward Systems
partners
"IKEA bring knowledge of home decor and creating
products of great value for the many people, and Sonos
brought its sound expertise.”
> IKEA’s sales growth slowed to two per cent in 2017

compared to an average of seven per cent per year
from 2012 to 2017 with profits falling in 2017.
> IKEA recovered to 4.5 per cent year-on-year in the 12

months to August 2018 (mainly online).
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"IKEA bring knowledge of home decor and creating
products of great value for the many people, and Sonos
brought its sound expertise.”
> IKEA’s sales growth slowed to two per cent in 2017

compared to an average of seven per cent per year from
2012 to 2017 with profits falling in 2017.
> IKEA recovered to 4.5 per cent year-on-year in the 12

months to August 2018 (mainly online).
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« How to partner at the supply chain level to
stand out from competition and integrate
strategies aimed at providing sustainable
customer value with the low total cost.”
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Section 2:
CREATING CUSTOMER
VALUE
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What’s the job
to be done?
At what cost?
(Price to pay to do the job)
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When my I want to serve so I can enjoy
friends come them a high my time with
into my house, quality coffee them
on one-touch,
At what cost?
(Price to pay to do the job)
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Customer Value Defined
1. Benefit Perception of the Company’s offering
Sum of Benefits of the

Company’s offering
Value is the sum of net benefits

perceived by the customers
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1. Benefit Perception of the Company’s offering
Cost (JTBD price)
Sum of Benefits of the Customer Incentive to

Company’s offering Purchase
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2. Benefit Perception of the Competitor’s offering
Cost (JTBD price)
Sum of Benefits of the Customer Incentive to

Competitor’s offering Purchase
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Which offering gives me the

bigger Customer Incentive to
Purchase?
<
Customer Incentive to Customer Incentive to
Purchase Purchase
44
<
Customer-perceived value
The customer’s evaluation of the difference between all
the benefits and all the costs of a marketing offer relative
to those of competing offers
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Product A Product B
1 2 3 4 5 1 2 3 4 5
elegant stable elegant stable
dynamic static dynamic static
modern conservative modern conservative
relaxed strong relaxed strong
advanced traditional advanced traditional
naturally affected naturally affected
interesting monotonous interesting monotonous
slightly difficult slightly difficult
detailed generous detailed generous
powerfull tender powerfull tender
masculine female masculine female
economical sumptuous economical sumptuous
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3. Benefit Expected
Sum of Benefits Expected by the

Customer Value Created
for the Customer
Benefits Not Needed
Sum of Benefits of the Company’s offering
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3. Benefit Expected
Sum of Benefits Expected by the

Customer
Competitor’s Benefits Not Competi- Areas of Company’s Points of Company’s Benefits Not
Valued by the Customer tor’s USP Improve- USP Parity Valued by the Customer
ment
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1. Benefit Perception of the Company’s offering: Benefit Perception

2. Benefit Perception of the Competitor’s offering: Competitor Benefit Perception
3. Customer Benefit Expectations: Benefit Desired
51

Customer Centricity

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MEDITERRANEAN SCHOOL OF BUSINESS

Target invited to evaluate thicker, more chocolaty,

Clear feedback, but no impact on sales

Whether these consumers were alone or

> Early-morning customers were alone

> They did not buy anything else

> They consumed their shakes in their

Bagel Banana Doughnuts

> Consume it cleanly with one hand

> Make the milk shake even thicker to last longer

> Swirl in chunks of fruit, adding a dimension of

They were exhausted from

They hired milk shakes as an innocuous way to placate their

Focusing on the ‘job to be done’ (benefits

Aligning the resources of your organization to effectively respond to the ever

Jay (2005) and Ron (2006)

Those organizations which consist of structure, business processes, management

> Fans participated in a contest of designing new ice

> Customers could pick a base flavor, put chunks,

> The winners of the contest had their ice cream

> IKEA’s sales growth slowed to two per cent in 2017

> IKEA recovered to 4.5 per cent year-on-year in the 12

> IKEA’s sales growth slowed to two per cent in 2017

> IKEA recovered to 4.5 per cent year-on-year in the 12

Sum of Benefits of the

Value is the sum of net benefits

Cost (JTBD price)

Sum of Benefits of the Customer Incentive to

Cost (JTBD price)

Sum of Benefits of the Customer Incentive to

Which offering gives me the

Sum of Benefits Expected by the

Benefits Not Needed

Sum of Benefits of the Company’s offering

Sum of Benefits Expected by the

1. Benefit Perception of the Company’s offering: Benefit Perception

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