Student Name:

Assignment Title: Weekly Integration Assignment 03

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1. After reviewing chapters 4 and 5 of the Kotler and Keller text, and using specific information derived
from the text, provide a brief comment about each of the following:

a. Provide a brief description of how an organization’s marketing team can attract and retain the
right customers and cultivate strong customer relationships and communities for the purpose
of enhancing the customer lifetime value (consider issues covered in pages 59 – 64 of the text).

As described in the text, it is not enough to attract new customers; the company must also
keep them and increase their business (Kotler and Keller, 2016, p.62). Many companies
suffer from high customer churn or defection; therefore, the company must first define
and measure its retention rate, distinguish the causes of customer attrition and identify
those that can be managed better, and compare the lost customer’s lifetime value (CLV)
to the costs of reducing the defection rate (Kotler and Keller, 2016, p.62). The main steps
in attracting and retaining customers can be explained in the marketing funnel where it
identifies the percentage of the potential target market at each stage in the decision
process from merely aware to loyal (Kotler and Keller, 2016, p.62). The funnel allows
marketers to identify any bottleneck stage or barrier to building a loyal customer
franchise as well as emphasizes how important it is not just to attract new customers but
to retain and cultivate existing ones (Kotler and Keller, 2016, p.62). Customer
profitability analysis and the marketing funnel help marketers decide how to manage
groups of customers that vary in loyalty, profitability, risk, and other factors (Kotler and
Keller, 2016, p.62). Winning companies know how to reduce the rate of customer
defection; increase the longevity of the customer relationship; enhance the growth of each
customer through “share of wallet,” cross-selling, and up-selling; make low-profit
customers more profitable or terminate them; and treat high-profit customers in a special
way (Kotler and Keller, 2016, p.62). Companies should also strive to build loyalty for
strong enduring connections with customers by interacting closely with customers,
developing loyalty programs, creating institutional ties, and creating value with brand
communities (Kotler and Keller, 2016, p.63). Three characteristics identify brand
communities:37 (1) a sense of connection to the brand, company, product, or community
members; (2) shared rituals, stories, and traditions that help convey meaning; and (3)
shared responsibility or duty to the community and individual members. (Kotler and
Keller, 2016, p.63).

b. Briefly explain how the many key psychological processes influence the buying behavior of an
organization’s consumers and how they interrelate with other influence factors (review pages
69 – 80 of the text).

In order to understand what influences consumer behavior, marketers must fully

understand both the theory and reality of consumer behavior which is influenced by
cultural, social, and personal factors (Kotler and Keller, 2016, p. 69). Culture is the
fundamental determinant of a person’s wants and behavior (Kotler and Keller, 2016, p.
69). Each culture consists of smaller subcultures that provide more specific identification
and socialization including nationalities, religions, racial groups, and geographical
regions (Kotler and Keller, 2016, p. 69). Marketing and environmental stimuli enter the
consumer’s consciousness, and a set of psychological processes combine with certain
consumer characteristics to result in decision processes and purchase decisions (Kotler
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Assignment Title: Weekly Integration Assignment 03
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and Keller, 2016, p. 72). The four key psychological processes according to the text are
motivation, perception, learning, and memory (Kotler and Keller, 2016, p. 72).
Consumers often have many needs at a given time, some are biogenic such as hunger and
thirst, and some are psychogenic such as the need for recognition or belonging (Kotler
and Keller, 2016, p. 72). A need becomes a motive when it is aroused to a sufficient level
of intensity (Kotler and Keller, 2016, p. 72). In marketing, perceptions are more
important than reality because they affect consumers’ actual behavior (Kotler and Keller,
2016, p. 73). Abraham Maslow’s answer to why people are driven by particular needs at
particular times was that human needs are arranged in a hierarchy from most to least
pressing – from physiological needs to safety needs, social needs, esteem needs, and self-
actualization needs (Kotler and Keller, 2016, p. 73). Perception is the process by which
the consumer selects, organizes, and interprets information inputs to create a meaningful
picture of the world (Kotler and Keller, 2016, p. 73). Although consumers are exposed to
thousands of marketing stimuli every day, most stimuli are screened through a process
called selective attention (Kotler and Keller, 2016, p. 73). Selective distortion, the
tendency to interpret information in a way that fits consumer’s preconceptions, can work
to the advantage of marketers with strong brands when consumers distort neutral or
ambiguous brand information to make it more positive (Kotler and Keller, 2016, p. 73).
Learning induces changes in our behavior arising from experience (Kotler and Keller,
2016, p. 74). Learning theorists believe learning is produced through the interplay of
drives, stimuli, cues, responses, and reinforcement (Kotler and Keller, 2016, p. 74).
Memory, according to cognitive psychologists, can be distinguished between short-term
memory, a temporary and limited repository of information – and long-term memory – a
more permanent, essentially unlimited repository (Kotler and Keller, 2016, p. 74). Brand
association is a key example that consists of all brand-related thoughts, feelings,
perceptions, images, experiences, believes, attitudes, and much more that become linked
to the brand node (Kotler and Keller, 2016, p. 74). State Farm, for example, illustrates in
their Hypothetical Mental Map the associations consumers make for their brand which
include “Good Neighbors”, fast settlement, safe, red color, and reliable to name a few
(Kotler and Keller, 2016, p. 75). Once information becomes stored in memory, its
strength of association decays very slowly (Kotler and Keller, 2016, p. 75).

2. After reading the companion article (Marketing to the Reptilian Brain); provide a brief explanation to
the executives of an organization regarding the importance of considering this concept; perhaps review
the benefit of discovering codes as a strategic opportunity.

According to Rapaille’s article, “Marketing to the Reptilian Brain,” it is important for

organizations to understand that consumers respond with their cerebral cortexes which are
strongly influenced by the reptilian brain (Rapaille, 2006). The reptilian brain is made up of the
brain stem and the cerebellum and is home of our instincts (Rapaille, 2006). The reptilian brain
also programs us for two major things: survival and reproduction (Rapaille, 2006). According to
Rapaille, when you tap into the reptilian brain, you learn what a product means to a consumer at
its most fundamental level (Rapaille, 2006). In order to work around the reptilian brain, Rapaille
suggests that discovering “Codes”, the unconscious meaning people give to a particular product,
service, or relationship, can lead to marketing success (Rapaille, 2006). As part of a three-hour
nontraditional session, participants engage their cortexes, limbic systems, and reptilian brain to
have them express what was imprinted into their subconscious (Rapaille, 2006). An example of
success Rapaille noted was the creation of the PT Cruiser, introduced in 2000, which
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Assignment Title: Weekly Integration Assignment 03
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demonstrated that cookie-cutter sedans from Chrysler were “off-Code” (Rapaille, 2006).

3. After reading the companion article (Customer Loyalty Isn’t Enough); provide an executive summary
regarding the significance to the firm of this information; especially the procedural information
contained on page 30 of the article.

Companies spend a considerable amount of time and money trying to improve customer loyalty
by measuring and managing metrics (Keiningham, Aksoy, Cooil, p.29). According to the article,
what matters most: the share of wallet, should be a more important metric which measures the
percentage of a customer’s spending within a category that’s captured by a given brand, or store
or firm (Keiningham, Aksoy, Cooil, p.29). The share of wallet is a simple three step calculation
where a company would first establish the number of brands (or stores or firms) customers use in
the product category, survey customers and obtain satisfaction or other loyalty scores for each
brand, and lastly arrive at a brand’s share of wallet using the Wallet Allocation Rule Formula
(Keiningham, Aksoy, Cooil, p.30). Companies can benefit using the share of wallet metric
because it takes into account both rank and number of brands in the set the consumer uses
(Keiningham, Aksoy, Cooil, p.30). To understand what drives changes in share of wallet,
managers need to shift their focus from drivers of satisfaction to drivers of rank (Keiningham,
Aksoy, Cooil, p.30). In order to make the shift, according to the article, companies can’t assess
brand performance as if it existed in a vacuum such as measuring customer satisfaction or other
metrics that are based on customers’ perceptions of their brand alone (Keiningham, Aksoy, Cooil,
p.30). Secondly, the rule makes it possible to craft strategies that directly affect brand
performance and the measure the impact on wallet of share (Keiningham, Aksoy, Cooil, p.31).
Companies should focus on learning how the customer ranks different brands and how many
brands the customer is exposed to in order to increase their share of wallet. Many companies can
see a jump in revenue if they decided not to pursue customer satisfaction but instead focus on
how satisfaction and other loyalty boosters can help them pull ahead of the competition
(Keiningham, Aksoy, Cooil, p.31).
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Assignment Title: Weekly Integration Assignment 03
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References

Keiningham, T. L., Aksoy, L., Buoye, A., & Cool, B. (2011). Customer Loyalty Isn't Enough.
Grow Your Share of Wallet. Harvard Business Review, 29-31. 

Kotler, P., and Kevin L. Keller (2016).  A Framework for Marketing Management. (6th ed.)
Prentice Hall. 

Rapaille, C. (2006, July 03). Marketing to the Reptilian Brain. Retrieved October 24, 2020,
from https://www.forbes.com/forbes/2006/0703/044.html