Customer Oritation

Chapter 2

Being Customer Oriented

Market Orientation Customer Orientation JW:sel:H/AW#5

Customer Commitment: How Market Leaders Do It  Through masterfully creating and delivering value to their highly satisfied and loyal customers

 Greatness in marketing and customer services becomes a function of attitude, not resources.

The Traditional Marketing Concept  Customer satisfaction at a profit  Stresses conquest marketing (getting new business)

Relationship Marketing Concept (RMC) Evolved due to highly competitive global service markets

2 objectives:  Maintaining and upgrading customer relationships (retention strategies)  Growing business by finding new customers and creating long-term value 

Becoming Marketing Oriented Marketing Variables

Sales Oriented

Market Oriented

Starting Point

Organization

Target markets

Marketing Focus

Product/service

Customer needs

Customer Focus

New business (attraction)

Existing customer base (growth and retention)

Competitive Edge

Lowest delivered cost

Superior quality or service

Product Strategy

Generic product

Augmented product

Promotional Strategy

Selling/advertising

Integrated marketing communications (IMC)

Pricing Strategy

Maximizing profit margins

Profitable use of resources

Marketing Objective

Sales volume

Customer satisfaction

Planning Approach

Reactive

Proactive

Time Perspective

Short term (tactical)

Medium and long term (strategic)

The

Marketing Continuum Market Driving Market Driven

Sales Product Production

Market Orientation A market orientation provides impetus for building an organizational culture which:  Puts customers first

 Creates superior value for customers  Leads to increased overall business performance  Employees of marketing oriented companies become value-adders  Employees of marketing oriented companies know how to listen to and respond to customers

Market Orientation Constructs and Models Narver & Slater:  Customer Orientation  Competitor Orientation  Interfunctional Coordination Kohli & Jaworski:  Intelligence Generation  Intelligence Dissemination  Responsiveness

The Market Orientation Process

 Market orientation involves learning about customers and competitors  Firms operating in a competitive industry are most likely to benefit from a market

orientation

 Market orientation inputs are valuable for formulating an initial definition of your market and for staying “in touch” with your customer base

Market Driving Vs. Market

Driven Companies

 Market driving companies go beyond accepting given market structures and behaviors  Market driving firms shape or change markets/ sectors by eliminating, adding, or modifying the players in markets and their functions  Market driving companies rewrite industry rules and compete in new market arenas

Market Driving Vs.

Market Driven Companies – cont’d  Market driving companies have unique business systems and ideas  Market driving companies deliver large leap in customer value

Developing a

Customer-Oriented Organization Customer-centric marketing emphasizes understanding and satisfying needs, wants, and resources of individuals and customers rather than those of mass markets/segments (Sheth, et al., ) Table 2-2 Contrast of New Customerization Framework and Old Marketing Model

Becoming Customer Oriented A customer oriented business culture:  Top management’s values  Employee input

 Interdepartmental dynamics  Organizational systems  Responses to environment  Dual customer and competitive emphases  Long term view of business/value

Regis McKenna’s Marketing Philosophy  Marketing is the responsibility of everyone in the organization  Customer orientation equals organizational function rather than departmental as in marketing department A customer orientation is a service organization practicing Japanese style marketing  Okyaku-sama – “honored customer” or the “customer is God

What Customers Require From Companies Today’s customers are quite smart and sophisticated and looking for companies that::  Create maximum value for them based on their needs and wants  Demonstrate that they value their customers’ business

Characteristics of New Value-Seeking Customers       

Choice-seeking Demanding Knowledgeable Believe that loyalty must be earned Price conscious Environmentally aware Convenience-oriented

Market Myopia Organizations must avoid market myopia (forgetting customer needs) by: ■ Overcoming complacency ■ Staying relevant in the marketplace/space ■ Be creative in programs and processes

Market Myopia - cont.

Organizations must avoid market myopia (forgetting customer needs) by: ■ Adapt and be flexible –

responsive/proactive to market conditions and tastes ■ Use a Kaizen philosophy – continuous Improvement

The

Bias for Action Continuum

Non-responsive Reactive Responsive Proactive

Anticipatory

(Adapted from Barrett H. (1996)

Marketing Approaches to Achieve Customer Focus Customer oriented organizations build on the marketing concept (market orientation is the firm’s implementation of the marketing concept); ■ Designing customer-driven processes and programs ■ Establish a strong marketing information system ■ Segment and target markets ■ Hire the best talents ■ Stress operational efficiency ■ Continually measure and fine-tune their customer focus

Trigger Points of Customer

Value

Company/customers (marketing mix)

Employees/customers (service providers)

Technology/customers (e-marketing mix)

Customer-Oriented Marketing Approaches Customer Customer

Marketing Mix

Service Providers

E- Marketing Mix

The E-Marketing Mix Taxonomy

Product Price

Place Promotion Sales Promotion Personalization PRIVACY

Community Site

Security

Adapted from Kalyanam, K. and McIntyre, S. (2002) The e-marketing mix: a contribution of the e-tailing wars, Journal of the Academy of Marketing Science, 30 (4), pp. 487-499.