"Selective demarketing is a strategic option for a firm to manage customers who are or are likely to be a poor fit with its offering.Continua.
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these customers effectively destroy value by misusing or misunderstanding how to integrate their operant resources with those of the firm.
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A firm interacts with selected customers to co-construct a consumption experience from which the customer gains value-in-use or co-creates value. The firm directs its marketing efforts at identifying new customers with whom it may be able to co-create value and seeks to extend value co-creation opportunities with existing customers. However, the business environment is far from static; changes occur for the firm, its customers and members of its network. The firm, as a result, may decide to withdraw from existing markets and/or to prioritize new customer groups. Such actions have been labelled selective demarketing, the aim of which is to reduce demand from certain classes of customer. These segments or customer classes may be considered relatively unprofitable or undesirable in terms of their impact on other valued segments of the market, becoming candidates for selective demarketing.
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some customers effectively destroy value by misusing or misunderstanding how to integrate their operant resources with those of the firm. By destroying value, these customers may be suitable for selective demarketing.
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Serving some customers may engender high psychological as well as financial costs such as disruptive or aggressive customers encountered by airlines prompting firms to seek ways of encouraging them to go elsewhere. Firms may have up to 30% of their customers making a negative contribution in B2C situations, rising to a half of customers, in a study of German engineering firms.
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It has been asserted that resource allocation decisions at the market or segment level can result in suboptimal strategies; therefore, firms should allocate resources at the individual customer level instead
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The firm can then identify those customers who do not generate a desired level of return and may encourage these customers to spend more or reduce the quantity of sales communications
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By not dealing with unprofitable customers, the firm is failing to optimize its resources. This failure is likely to affect its stakeholders – it has already been noted that serving unprofitable customers raises costs for profitable customers – with costs resonating within the stakeholder system. Although the mandate for selective demarketing is increasingly being accepted, firms are caught in something of a dilemma. On one hand, they have a proportion of customers who generate insufficient revenue and affect stakeholders as well as the firm itself. On the other hand, the repercussions of eliminating these customers either directly or indirectly damages the firm’s reputation. It is, therefore, not surprising that firms may hang back from selectively demarketing but at the same time, the decision not to take action against unprofitable customers is damaging to the firm and its system."
Trechos retirados de "Selective demarketing: When customers destroy value" publicado por Marketing Theory 1–18, 2016
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