Evolutionary Trends to Transform Your Loyalty Strategy - Essay Example

?Article Review The article You Say You Want a Revolution: Three Evolutionary Trends that will Transform Your Loyalty Strategy was a very interestingarticle. One of the factors mentioned in the article that drive customer loyalty is innovation. I believe that innovation is one of the most important factors for marketers in today’s marketplace. A company that has been exceeding the expectations of its customers with the innovative technology products is Apple Computers. Apple took over the music player and smartphone marketplaces with the introduction of the IPod and IPhone. The three revolutionary trends that were discussed in the article that can be used to build customer loyalty were the power of networks, the power of data, and the power of convergence. The use of networks can benefit the marketing strategy of a company. Metcalf’s law states that the usefulness or value of a network system equals the square of the numbers of users in the system. The telephone is an example of a product that follows Metcalf’s law. A single telephone is not of much value, but as more people buy telephones the value and utility of the telephone increases. Another example of the power of networks is EBay. Buyers and sellers at EBay depend on each other for the marketplace to be liquid. As more people join the EBay network the business model continues to thrive. The article mentioned the case of Hewlett-Packard. The company created a loyalty program for its technical users. The program was very effective at bringing IT users together. Four tips for leveraging your network are know your customer base, create virtual sharing environments, build community through tangible assets, and networks are a means to an end. The second important factor mentioned in the article was the power of data. Companies need data in order to learn about the needs and desires of companies. Tesco uses a loyalty program called Club Card to track the buying behavior of its customers. The third trend mentioned in the article is the power of convergence. Convergence occurs when different technologies evolve independently to perform similar tasks. An example of technology convergence that can be used to drive a customer loyalty program is the use of a CRM. Chapter Ten Summary A product is anything that can be offered to a market to satisfy the wants or needs of the customer. There are three dimensions that customers use to evaluate a product or service. The three dimensions are service mix and quality, product features and quality, and price. There are different levels of product’s features, benefits, and quality. The five product levels are core benefit, basic product, expected product, augmented product, and potential product. The core benefit is the fundamental service or benefit that the customer is buying. Marketers also classify products on the basis of three characteristics. The three product classifications are durability and tangibility, consumer goods, and industrial goods. Non durable goods are goods that are consumed after a few uses. Most food items are non durable goods. A durable good will last a long time due to the fact that the utility of the product will extend over a number of years. An example of a durable good is a refrigerator. Consumer goods are items that can be bought retail stores such as K-mart and Wal-Mart. Industrial goods are materials and parts that are utilized by firms in the manufacturing process. A product system is a group of diverse but related items that function in a compatible manner. The product mix is the set of products and services that a company offers. The product mix of GM motors includes all the car models the company offers, its retail parts operation, and the repair shop servicing operation. Companies that offer a variety of products are able to generate more revenues the firm that offer a limited amount of products. An example of a company that offers hundreds of different consumer products is Proctor and Gamble. Some of the attributes of product mix are width, length, depth and consistency. An important element of the product offering is the package that is used by the company. The label and package that a company uses can differentiate a product. For example Coca-Cola uses different packaging options to sale its soft drinks. The firm has a particular label that helps customers identify the product in the shelves of stores. Packaging includes all the activities of designing and producing a product’s container. Companies often change their labels in order to make the packaging more visual appealing to the customer. Another important aspect of a product is its warranty. Some companies utilize the warranty function to add value to the product. For example Western Auto sells a lot of auto parts that have lifetime warranty. Companies can manage new products in two ways. The products can be obtained through acquisitions or by product development. Buying product lines that somebody else developed is an effective way to penetrate a marketplace very fast. Product development is a technique that can increase the profitability of a company in the long run. In the pharmaceutical industry companies spend over $800 million in R&D for every successful product that is released into the marketplace. The product development process starts with idea generation. It is important to have workers that have creativity in order to generate good ideas for new products. Once a product has been developed it is the duty of the marketing department to perform a market test of the product. Market test can be performed by introducing a small quantity of goods into the marketplace. A feedback mechanism must be placed on the goods in order to retrieve data from the customer in regards to their opinion about the product. Adaption occurs when a customer decides to become a regular user of the product. Companies that are able to generate a high level of customer retention achieve better operating results. It is said that 80% of your sales are generated by 20% of your customers. Products go through a life cycle process. The four stages of the product life cycle are introduction, growth, maturity, and decline. During the introduction stage sales are slow. The growth stage is a period of rising sales as the product becomes more popular in the marketplace. Sales starts to go down during the maturity stage due to the competition. A product is phase out of the marketplace during the declining stage. References Hlavinka, K., Fergenson, R. (2006). You Say You Want a Revolution: Three Revolutionary Trends that Will Transform Your Loyalty Strategy. Colloquy Talk. Read More