Assignment Title: Weekly Case Assignment 03
Date: 1 April 2021
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).
Please use appropriate APA citation and attribution rules for all information sources.
Organizations are in business to make money and without the right (profitable) customers
they may cease to exist, hence most organizations strive to satisfy these customers and
provide their expected value. It can be quite challenging for the organization’s marketing
team to identify, attract and retain the right customers whilst earning their loyalty and
enhancing customer lifetime value (CLV). CLV can be seen as the monetary value of
customer relationship using the present value of the stream of future profits expected over
the customer’s lifetime purchases (Kotler & Keller, 2016, pp. 84). The mathematical
expression of CLV has evolved over the years and help provide a quantitative framework
for planning customer investment and enable marketers to implement a long-term
assessment.
To keep the organization in a going concern, there will be no need to focus on unprofitable
customers such as the daily deal customers. Organizations use diverse acquisition
approaches to reach out to new prospects and these include but not limited to advertising
in media, sending of mails and e-mails, purchase name from brokers, participation of
salespeople in trade shows (Kotler & Keller, 2016, pp. 86). The customer yield of each
acquisition technique differs based on customer lifetime values (CLVs). Kotler & Keller
(2016, pp.86) suggest customer retention process as follows; clear definition and extent of
retention rate, classification, and ranking of causes of customer attrition, selection of causes
that can be well managed, comparing the lost customer’s CLV to the costs of reducing
defection rate. The marketing team can decide to attempt to retain customers if the lost
profit is greater than the cost to discourage defection.
Most organizations experience customer churn, and this affects their reputation. It is very
important to retain existing customers as it is challenging for marketing teams to go through
the win-back strategies, even if it is easier when compared to attracting new ones (Kotler
& Keller, 2016, pp. 86). The understanding and application of the marketing funnel by
marketers will retain converted customers and with the possibility of cultivating new ones.
A good combination of customer profitability analysis and the marketing funnel helps the
marketing team to improve the relationship between customers and the organization.
Successful organizations ensure that the longevity of customer relationship is increased,
rate of customer attrition is reduced, customer growth is enhanced, conversion of low-profit
customers to profitable customers or terminate unprofitable customers, and preferential
treatment for high-profit customers (Kotler & Keller, 2016, pp. 86).
Customer relationship has been viewed as one of the key factors that contribute to the
profitability of an organization (Kotler & Keller, 2016, pp. 84). The marketing team of an
organization can maximize customer loyalty by thoroughly managing the marketing
information system and analyzing marketing intelligence through a process known as
customer relationship management (CRM). According to Kotler & Keller (2016, pp. 87),
certain marketing activities can help in improving loyalty and customer retention. These
activities include close interaction with customers, development of loyalty programs,
creation of institutional ties, and creation of value with brand communities.
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)? Please use appropriate APA citation and attribution rules for all information
sources.
Many key psychological processes influence the buying behavior of an organization’s
consumers and the stimulus-response model has paved the way for the marketing team to
understand consumer behavior. The key psychological processes are motivation,
perception, learning, and memory.
Based on the psychological state of tension, Kotler & Keller (2016, pp. 96) classify needs
into two; biogenic and psychogenic. The psychological process known as motivation has
both direction and intensity and occurs when a need is stimulated to an adequate level of
intensity to trigger action. The presence of satisfiers and dissatisfiers also influence the
buying behavior of consumers. Using the laddering technique, an individual’s motivations
