Tutor: CHRYSTALLA MARKOU
Student Number: R1601D1219731
Date of Submission: 26th November, 2017
The primary goal of every organization is to attract customers first to patronize their products/ services, before coming up with the various ways to keep these customers they have acquired. This is to say, irrespective of how big, medium or small a business is, customers are key to survival, thus, businesses cannot do without customers. The customer always comes first, and is the center of every activity performed by the organization/ business.
The term customer has been defined by various writers, each of which makes sense to the readers. However, the simplest definition for who a customer is, is ‘any individual or even a business that buys or consumes goods and services produced by another individual or business, and has the capability to choose between different products or services offered by this entity (individual or business). (Google.com)
Knowing customers have the power to make or collapse a business, and are the resources upon which the success of businesses depends on, organizations need to learn to develop customer loyalty, and customer satisfaction, and strategize to have customer retention before they end up with no customers at all. Customers can be characterized under Business-to-Customer (B2C), Business-to-Business (B2B), Customer-to-Business (C2B) and Customer-to-Customer (C2C). B2C is when a customer makes purchases from a business direct; B2B is when a business deals with or purchases goods and products from another business, C2B is when a customer sells to a business, and C2C is when customers buy/ sell from each other. To manage these customers, businesses need strategies in place. Strategies here can be thought of as, ‘any action/ plan/ direction business owners or managers take to achieve their organizational goals’, in this case, customer / customer service goals. (Management Study, 2017)
Therefore, there is a need for a marketing strategy for customer acquisition and customer retention, as well as customer satisfaction and customer loyalty. Every business/ organization that deals with customers/ clients/ consumers, do so via their marketing units, and this strategy is required by/ from them. To market is to identify customer needs and satisfy them. A marketing strategy is defined by Investopedia.com as, “a business’ total game plan for reaching people and converting them into customers of that business’ products and services”. This marketing blueprint will lay out how to go about achieving all the above named, to maximize growth and profits, by targeting activities, programs, campaigns etc. to drive retention, loyalty, satisfaction, growth… It also reinforces focus on the customer, their needs and wants, and how to make them happy per each transaction. This can be done if the entire people within the business make the satisfaction of customer needs and wants their total motive for working.
Customers when properly managed, can lead to a competitive lead for the business/ an upsurge in market share/ improved profit margin, etc., as it is believed that one form of gaining competitive urge is via providing better customer service.
This report speaks for the fact that the best strategies for customer marketing are not inside out, but rather, outside in, with customers as its major focus for survival of any business.
Customer Needs and Wants
Before a business can create an absolute solution to solve a market problem, they must realize the customer need, and outline them in clear ways which can serve a s a guideline, i.e., a business cannot attract, convert, retain, or meet customer needs when it does not understand what exactly the customers need- unless it really knows its customers and their needs. Understanding customer needs is a critical mission for every business owner, organization that sells, and all marketers. A good understanding of the need, means detecting and understanding the precise customers. Mitchell, J. (2016) Customer need in this context is that desire that needs to be fulfilled by a product or service, and this desire becomes an opportunity for the business to deliver a benefit that has value to the customer.
Needs and wants may differ, as every individual or business may seek different products/ service at any point in time. Some may also have no preference and it is still up to the business to gradually discover their true needs and identify the right items that will satisfy them, as this will help build a better relationship with the customer (s). Now, how do businesses identify these needs to help plan strategies to attract and meet what their customers want and need? Customer needs analysis or identification requires a research of the business industry itself. Thus, the business needs to not just try to understand the customers, but also have a better in-depth understanding of the industry in which it operates, then further ask customers specific question through regular communication. This is not an easy task, because if a business should go asking customers what they need, they might end up with so many absurd and preposterous responses they may not be able to work with. So, a better technique of customer observation can be adopted. The steps below can be a guide:
A marketer should be out there to interact with customers to observe customer behavior and experience with the various products/ service, how they are being used, the purpose for which customers even purchase the product/ service etc.
Figure out which needs are not being completely satisfied by the product/ service and come up with ways or better products to meet that need. Uber for example states on various sites how it identified the need of people wanting to get around town faster at a more affordable cost, which taxi services could not satisfy, and devised an efficient solution to meet this need. The Entourage (2017)
Track and analyze what customers are saying about your products on social media
These unmet or unsatisfied needs can be identified by focusing on the following areas:
Things that do not work well or effectively for customers
Discomforts that arise as a result of use of product/ service
Frustrations vented by customers upon use of service/ product
Identifying, noting and compiling these dissatisfactions, creates a foundation for solution creation. This solution will then be intended to fully recover the unmet needs of the products and services.
Customer Satisfaction and Loyalty
Marketing statistics proves that 91 percent of dissatisfied customers do not talk about their dissatisfaction to the business, but simply move on to another business and vent their grievances on social media. Knowing this alone should push a business to increase customer satisfaction, as when not properly executed, will not only make them lose their existing customers, but also tag them as a bad business by many potential customers.
For any business to know whether or not it is meeting customer expectation, customer satisfaction is the key to aid them improve products and services provided to customers, as any business ideally continually seeks feedback to improves customer satisfaction. All businesses start and close with customers, hence, a customer must be treated as the king of the market. Just as business enhancements, status, profit, image, etc. acquired, or earned, are as a result of their customers, it is therefore very essential for organizations/ businesses to meet their customer satisfaction. Customer satisfaction is hereby achieved when the supplier/ business has an overall healthy long-term relationship with its customers. Thus, the more satisfied the customer, the stronger the bond with the business. Organizations like Amazon dedicates its resources to satisfy customers, even if that means shortchanging sellers or content providers; Google allocated a large part of its resources to staff to freely work around and innovate products and services (thus, build the best technology in the world) for its customers. This did not just earn them customers, but has left these businesses with a great deal of loyal customer base.
To improve customer satisfaction, customer service must be of great importance to the business. Customer service is simply put, ‘providing assistant/ service to customers, before, during and even after the purchase of goods and services’. This is a form of communication with the customer which helps identify customer needs, so the right responses can be given accordingly. This also enhances feedback from customers, i.e., helps the business to know how the customer felt after using a product or receiving a service and whether the business could have done more to make them happy (transactional satisfaction). Customer service sets one business apart from the other, and builds customer loyalty. Customer loyalty is seen when a customer consistently purchases goods and services from a particular business, either as a result of being treated special, or for many other reasons. For example, a shop has a database of its regular customers, their trends of purchase, records of regular purchases etc. and anytime a customer in this circle purchases a new product, a customer service person contacts the customer to take feedback on this new product purchased (whether or not it met their needs and how product can be improved) and ensuring they improve on its quality each time there is a negative feedback. This will not only bring about customer satisfaction, but this customer will be loyal knowing their voice is heard and their feedback is well received and worked on.
A satisfied and loyal customer tends to reach out to other friends, family, colleagues etc. about the organization’s goodwill, their interest in customers etc. for them to also patronize, thereby expanding the profit and customer base of the business. In this case, instead of spreading grievances on social media, it will rather be preaching the goodwill of the business and their product or service.
Strategic Marketing Planning
Planning a marketing strategy involves the idea of introducing many promotional products, services, campaigns etc. to attract more businesses from the outside. By properly doing this, the organization can identify so many promotional opportunities and ideas, analyze and identify the market niche/ target and prepare their plan to position the organization in a way it can achieve its desired result in the long run.
A marketing plan is a blueprint that outlines the marketing program for a specific time frame. This includes the target market, the market mix and other strategies it will use to achieve the goals set. This plan emanates from a process, which is the strategic planning process.
Strategic Marketing planning is a process through which a business creates or come up with various marketing strategies and a plan to implement or execute them in target markets, not forgetting the current position of the organization, where it wants to be, how to get there, and the plan to make all strategies work for the good of the organization. This process is a big deal and if done hastily, will not yield any better result, thus, it takes time to develop- it is a continual process which evaluates short term and long-term goals. It takes into consideration combination of all customer experiences, with the complete course of action the company is required to take in order to succeed. Wikipedia (2017)
Amy Handlin outlines a 5-step strategic marketing process on smallbusiness.chron.com. According to this publication, the steps are:
The business needs to identify its mission, i.e., reason for existing and how it can serve target market over the long term
Analyze the situation by use of SWOT analysis to prioritize and evaluate strength and weakness (internal factors which the business has control over), opportunities and threats (external factors, the business has no control over). This analysis will help the business owners know which resources they have at hand, how they can develop it more, and how they can meet the challenges that is likely to come up with time.
Set SMART (Specific, measurable, achievable, relevant and time-bound) marketing goals
Develop a marketing strategy from all the above findings. This also involves using the right mix to reach potential customers
Evaluate and access progress over time
The basic advantage of strategic marketing planning is that, once it is developed, it serves as a guideline for the business to follow in the attempt or struggle to achieve its goals. Some other importance of strategic marketing planning are:
It makes it easy for the business to translate its mission, vision, aims and objectives into better and simple marketing initiatives.
It helps the organizations to focus by selecting the best fit to pursue and what to ignore
It helps the organization/ business to identify factors towards gaining competitive advantage over others
Boasts sales for the business, thereby, increasing its profit margin
Aids the business improve its marketing communication with its customers (Google.com)
Businesses segment by identifying needs of specific customers within their customer base, and doing all they can possible, to satisfy them by allocating resources to meet the needs identified. Survival of any business will be close to impossible if its strategy for the market is to target an entire mass market, thus, the need for segmentation. Segmentation involves identifying which market needs to be segmented, basis to be used in that process, and the profiles to be developed. It helps the business implement all the strategies it has devised to promote products and services in the target market. Some segmentation variable for effective utilization of segmenting the market include behavioral, demographic, geographic, psychographic etc. Customer demographics include age, gender etc.; Psychographics refer to their interest and rate of use of a product/ service; Geographic is the physical location of the customer. Before segmentation, there is a need for research. It is via research that all these variables can be identified.
Marketing segmentation is very essential, as it is obviously not realistic for a marketer or business to go after every customer to make the business successful. The process of segmentation regards three elements, segmentation, targeting and positioning, i.e., when a market is segmented, a few of these segments are now targeted and products are well positioned in a way that sits well or fits with the targeted market (s). Wikipedia (2017) After considering all available variables for segmenting the market and profiling them, you then identify which of the segments/ how many should be targeted, and how the well the products can be positioned in the minds of the segmented customers. This means the segmentation process must yield segments that are meaningful to the business. This requires a great deal of thought and in- depth understanding of the markets to be segmented, as stated earlier. For example, if the business is into mobile phone production, it should be able to tell how different women prefer their handsets to look like, as well as the men. If the women prefer a sleeker colorful and flashy types, whiles men prefer heavy ones, the business can now come up with all the various kinds of phones to suit both gender.
After identifying the segmented markets, marketers/ organizations or businesses then decide which of these segments to target- concentrating market efforts on key segments comprising customers whose needs, wants or desires closely fit the products and services offered by the business. Targeting specific segments will not mean completely ignoring the other segments, it only allows the business to put focus on those markets more likely to spend on the businesses product and services than the others. Some tips for selecting target markets out of the many segment include:
A close look at the businesses market base to identify which market brings in most profit
Checking out competition to know which market it is overlooking, so the business can take advantage
Analyzing products and services and correcting its shortcomings
Choosing a specific demographic to target
And evaluating the final decision (Mandy Porta, 2017)
Product positioning is a way of branding the product in such a way that will occupy the minds of customers, get them talk and think about it so much that the focus of every customer will be getting that product. Philip Kotler (2003), defines brand positioning as, ‘an act of designing a business’s product and brand to occupy a distinctive place in the minds of its target market.’ In other words, product positioning if done well, makes customers perceive the product in a particular way and makes them willing to purchase.
The importance of this marketing approach, segmentation, targeting and positioning include:
It helps divide customers with similar needs/ wants into groups the business can best serve
It helps attract the right customers
It helps reduce risk, as the business only targets the segment most likely to increase its profit base
Helps delight and retain customers and reduces cost
Amazon and Its Customer Relations
Amazon is an online marketing business/ e-commerce retailer that emphasizes stands that serves its customers in the best and fastest possible way. Amazon CEO mentions, his team is motivated by the fact that customers are loyal to a business till the point when another business offers them a better service. This according to him, drives the team to always ensure their product and services stand out. Low prices. They believe their job is to provide a great customer experience, at low prices and at a fast-paced delivery. Amazon’s mission is “To be Earth’s most customer-centric company where people can find and discover anything they want to buy online”. Ever since its inception, Amazon’s strategies have revolved round customers, customer service, supply proficiency, and customer convenience. The focus point of all its activities is wrap around customers.
Amazon is directed by four basic operating principles: “customer obsession rather than competitor focus, passion for innovation, commitment to operational excellence, and long-term thinking.” Amazon is obviously obsessed about their customers, and encourage staff innovations to constantly attract and win the hearts of its customers by really taking great care of its employees in all aspects it can. This is clearly developed from their basic principles- ensuring they take advantage of every customer as much as they can, by constantly thinking of new ideas, and putting them into play, irrespective of what other businesses are doing or thinking of doing. According to Bezos (CEO of Amazon), the key to the business’s success has been listening to and innovating for customers.
Some key pointers that can be taken from the brief above on amazon is that:
They have identified what their online customers need, i.e., fast delivery of products and services at cheaper cost and from a reliable source.
They have clearly written out or shared the identified needs into basic codes for all staff to understand and partake in. i.e., all staff are privy to these customer needs and are equally aligned to meet the needs.
They have in-depth knowledge of the online marketing industry and thus, knows how to ignore competitors and focus on its customers.
Customer satisfaction is not compromised at Amazon. Just as customers are satisfied and tend to be loyal when they know they are the business’ top priority, Amazon does not give customers any room for doubts. It innovates according to customer wants and needs, and builds its brand around the customer. “Amazon is a brand which has had many years to create, test, and perfect its customer service model.” This customer-centric model serves as inspiration for the business and this should be emulated by other businesses. The organization has mastered the art of consistently finding and coming up with new and better ways to improve their customer experience. Some of these ways include: providing fast, hassle-free order and delivery services, helping online shoppers in real time with product selections based on surfing and purchasing history and going all out to help customers get the best deals or make purchasing decisions.
From the above, we can say Amazon;
yearns for, and works towards achieving continuous customer satisfaction.
goes the extra mile to ensure their reputation is boasted by customer referrals
has a strong customer service team that attends to customer needs and revert with better services
Due to the hard work Amazon puts in winning customers, customer loyalty is key. It focuses on a very simple measure to improve the quality of its customer service quality, and this is its vow to remain helpful every time there is a customer need, request, enquiry… as it believes hearing from customers is an opportunity to improve the relationship to its customers.
Amazon enhances their customer retention by:
developing processes for dealing with feedback received from customers (whether positive or negative). Their service team give all ear to customers, and address all issues with a professional level of respect and in a timely manner.
seizing every opportunity they get to interact with customers to make them happy through introduction of cheaper products, and any strategy at hand
offering promotions and gift cards on products and services as incentives to loyal customers
creating the best channel for customers to relay feedback
providing prompt feedback
Amazon clearly understands what customers mean to their business, and thus, have built a world around customers to always deliver the best to them. Understanding the needs of customers is the basis for strategizing, and they got it right. They identified their target markets from all over the world vis their online marketing approach, and through the years, have positioned a fine brand in the minds of all customers. Customers with the mindset of a better service experience, spread the gospel to family and friend, getting them to also patronize in the service of the organization- enlarging Amazon’s customer base, increasing its profit margin and always keeping them on top of the market chart. How else could they have done this if the focus was anything rather than their customers?
Top-Down and Bottom-Up against Inside-Out and Outside-In Approaches in Marketing
Top-Down marketing approach is when top management come up with a plan to sell to customers, without necessarily knowing their specific needs, identifying the appropriate segment that may need or fully patronize the organization’s product or service, but going all out to provide a service or product for consumption of a group of people.
Bottom-Up marketing approach, however, leaves most of these customer need analyses to its employees who directly deal with customers to come up with a list of their needs, taking into consideration all other factors, so they can provide goods and services to meet these identified needs.
Inside-out marketing approach is led by the certainty that the internal strengths and competences of a business will make the organization succeed.
Outside-In approach believes creating value for customers, customer experience etc. are keys to organizational succeed. In Outside-In, providing continuous customer experience through listening to customers, providing better services and products than that of competitors and developing a culture of customer-oriented market to its targeted segment etc. is what drives the business to succeed.
ConclusionCustomers clearly are the main subject of every business, and thus every business decision must take into consideration who its customers are, their needs, their expectation etc., and how best the business can meet them to its advantage. Thus, using the voice of the customer to base analysis on what needs to be done, improved or introduced into the market to keep customers satisfied and the business going.
Outside-in strategy is used by so many businesses including Amazon, because they believe without customers, they do not exist. Thus, it goes all out to strategize, know and select the target market, knows their needs and how best they can deliver to meet these needs. Using Outside-in approach means developing a model and an internal structure to focus on customer value creation.
In summary, every business that deals with selling or marketing, should believe in the voice of its customers. Know their needs/ wants, devise methods to provide them with offers to satisfy them on consistent basis, keeping them loyal and spreading the good will of the business. Also, it needs to know which target market it wants to sell to, and know how best to reach this niche. Continuous improvement through customer service and product positioning will also go a long way to help the organization succeed.
Lastly, just knowing customers is not the key to survival. You should know them and make them feel they matter to the business.
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