How the company seeks to deliver customer value - Essay Example

?Using an organization of your choice write a report that explains how the company seeks to deliver value Introduction Including Background to the Organization: In the present highly competitive times, there is a growing awareness within the business world to consistently deliver quality customer value to gain a competitive edge over rival companies. There is uncertainty and increasing pressures on organizations operating around the globe which makes the objective of delivering real customer value quite hard to achieve while maintaining company profit margins also. It is the tendency of leading organizations to shrewdly measure customer satisfaction and then use myriad smartly engineered strategies to that effect in order to efficiently address the challenge of maintaining customer loyalty in the face of fierce competitiveness. Basically, the purpose of this report is to explicate different media through which a company attempts to deliver real customer value by using example of Walmart which is an American multinational retail corporation and famously runs a large chain of department stores around the world. The success of this renowned business corporation is such that it is consistently ranked by Forbes as one of the top businesses operating worldwide. As it is one of the world’s most prestigious companies, currently over two million employees are privately employed at Walmart. It is also the largest grocery retailer in the US. There are already 8500 stores operating in as many as 15 countries under different names and the head of Walmart has thrown light on more plans for growth on an international level. This company stands distinguished among a growing crowd of aspiring organizations because the managers vigorously and regularly collaborate with employees to meet dynamic public needs and gain more customers. Not only customer intimacy is considered an important standard at Walmart, but the ramifications of promotion, distribution, and pricing policies are also carefully scrutinized which substantially helps in improving the satisfaction rate and delivering quality service. Organizational Objectives: One of the principal objectives of Walmart as identified by Mike Duke who is the current CEO of the organization is related to speeding up its expansion process to reach out to all people scattered around the world. He claimed in one address that in order to prioritize customer value, a more customer-focused approach is the need of the time and to stay ahead of other reputable organizations in current business environment to further this objective, Walmart will have to speed up its growth process (Daniel 2012). This objective identifies a fierce desire to gain recognition by delivery customer value. Astute assessment of customer satisfaction is considered critically important because that enigmatically assists in acknowledging what is valued by customers and that information can then be processed to gain a competitive edge over less knowledgeable rival organizations. Same has always been the tendency of Walmart marketers and managers and has consequently brought the company considerable success. Marketers can draw conclusions on what customers value only with the help of comprehensive knowledge in that context which can be gained by serving dynamic needs of a diverse line of customers as explicated by Duke (Daniel 2012). General consensus is that innovation is one of the key determinants of competitive advantage and this idea is fully respected at Walmart which invests extra efforts into integrating innovation in its organizational design or structure. Now, the idea of value can only be defined by the customers which is why integrating innovation in its products is infinitely stressed at Walmart to satisfy the target groups. It is repeatedly claimed that not only innovation is an important source of business growth but it also executes a phenomenal influence on customer value which is the essence of all marketing operations carried out by Walmart corporation. Many marketing models have been employed by Walmart to identify what is valued by customers and compel them to stay loyal by convincing them that only Walmart products can deliver that value which is idealized by them. It is suggested that any value proposition model can be chosen by an organization to determine customer value, but it is critically important for it to be “sharply defined, clearly communicated and well understood by employees, customers, owners and investors (Hardy cited in Hassan 2012: 71). It is assumed that a solid value proposition offers a huge repertoire of amazing advantages on multiple levels. Not only managers begin to think through the lens of customers’ perceptions but they also pay attention to them. This leads to a staggering rise in customer synergies which is always expected to happen when retail companies like Walmart make it their business to consistently deliver same value proposition across all retail outlets around the globe. Walmart is the largest retail company which despite the economic contraction that haunted the US for years generated the highest sales figures in 2008. Such accomplishments are made on grounds of making customers believe that not any other company can deliver them the same value which Walmart can. The roots of this value can be entrenched in “price, convenience (easy to find or free delivery), range of products or promotions” (Hassan 2012: 70). Walmart marketers fully acknowledge how important it is to consistently deliver a superior and real value to its customers because of its potential to ensure customer loyalty and reduced costs. This belief forms the bedrock of Walmart’s most successful value proposition strategy. Product and Brand Portfolio: The prodigious power of Walmart’s product line and brand name works quite effectively to popularize its marketing skills. It has always remained one of the most prized strategies of Walmart to build a long line of superior products so that there would be always a lot many choices available to the valued customers at reduced rates. Execution of this strategy by Walmart marketers enables the customers to make fewer sacrifices and benefit more when purchasing different products, which constructs just the right kind of scenario that increases customer perceived value. Walmart acts very strategically by increasing the rate of perceived benefits on all its products which attracts the customers towards them like flies and they are sold like hot cakes. Perceived benefits are related to myriad enticing physical and technical features of a product and perceived sacrifices are related to purchasing and pricing. When quality products are made available to customers from all backgrounds at lower prices than rival retailers and the power of brand name is also actively used to further that objective, not only customer perceived value picks momentum but profit margins and market shares also increase. It is firmly believed at Walmart that not all investments should be made in promoting products by attractive advertisements because the real essence of good marketing is embedded in delivering value to customers. This is also the principal motive of Walmart’s value proposition model to work in the best interests of a client. It is claimed that Walmart has amassed stupendous power over the years by conscientiously delivering its promise of “Always low prices—always” (Kotler 2008: 4) on all products. Pricing Strategies: Walmart has always exhibited keen interest in capturing customer value by smart pricing policies. The ability of this largest retailer to deliver a large product variety at the lowest prices is definitely impressive and has played a momentous role in retaining a large number of diverse customers. Popular assumption is that those businesses get nowhere which instead of making wise investments in more important areas like customer satisfaction spend all their energies in making money. Such shallow organizational objectives have never been associated with Walmart where infinite importance is associated with reducing prices to retain customers in the present highly competitive times. Pricing is one area which is valued by customers the most and underperforming in this area is an activity laden with potential risks. This is why Walmart relentlessly focuses on outperforming other rival brands in the area of pricing by assuring its customers the lowest possible prices on all products. But, affording to deliver customer value is not an easy task because the company has to make certain sacrifices and strict adjustments in other areas. Walmart knows that the customers can stay loyal as long as they are provided goods at most reasonable prices. So, attempts to afford such fierce demands of customers in the presence of limited resources are made by underinvesting in other areas which are less valued by customers. For example, while there will be many quality products available at most reasonable costs at an average Walmart store, there might not be many helpful employees present to assist the customers. Distribution Strategies: When customers do not get products without going through unnecessary hassle and inconvenience first, the delivery of real customer value is drastically mutilated. This is why Walmart has always made painstaking efforts to ensure that its consumers all over the world get the products they value with minimal inconvenience. There is a very strong and solid distribution network enjoyed by the management of nearly all Walmart stores. Save the factor of low prices, Walmart distributors make it sure that the customers are provided the desired products and services with minimal convenience. Proof of highly effective distribution is that following the hurricane Katrina, Walmart “was able to supply its stores with products quickly when other stores were out of stock for many items” (Michael 2013). In contrast to other retail stores, Walmart employs innovative management techniques like cross-docking of products in its distribution centers which helps in reducing the inventory costs (Michael 2013) and also assists in rapid product of delivery no matter where the customers are. That is why there is never anything found to be out of stock at the Walmart department stores because Walmart trailers remain active 24/7 to keep the shelves full and boost sales and profitability. Cutting costs and extreme cooperation and flexibility of Walmart managers also makes up an important factor which distinguished this cooperation from other retail stores. This is because when there is low drive of sales, the managers even cut their own hours to save expenses. Promotional Strategies: Save other mediums like good communication, empowerment, business ethics, and innovative marketing practices through which Walmart manages to deliver customer value and retain such a vibrant pool of diverse customers, research proves that this American corporation is also enormously skilled in context of its promotion policies. This is because Walmart has massive buying power and everyday new advertisements are watched by millions of people around the world which efficiently popularize low-priced products in a very attractive manner. In this way, people are told that they have good saving options even in the modern expensive times. Massive buying power is a factor of gigantic value because this has given Walmart marketers staggering amount of autonomy in effectively negotiating prices with suppliers. The price advantage created here in this area is then readily delivered to the customers which strengthens the company’s relations with them. Research also suggests that not only Walmart is able to provide quality products at lower prices than other competing brands to its loyal customers, but also its marketers conduct long and hard negotiations with buyers to help drive the product costs further down. This has proven to be a highly effective promotional strategy that has managed to win Walmart millions of customers to date. Conclusion and Future Developments: Walmart has managed to stay in power and dominate the retail business by attaching undue importance to the matter of delivering real value to its consumers. It perceives customers as an invaluable asset which should not be disappointed on any level regardless of limited resources. This is why Walmart managers and marketers through their amazing policies strive to inculcate a sense of belonging in the customers to improve their shopping experience and to make them feel relaxed. Focus on customer experience and making wise investments in the areas which are valued by customers explains why Walmart is at the top today. In the future, this company aims at facing the tough challenge of continuous growth and change by planning operational excellence and gaining intimacy with customers. This can be achieved by revealing important policies to them and delivering value. It is also intended at Walmart to continue consistent delivery of value in the future by careful monitoring of all operations to save every penny possible which generates dollars leading to provision of quality products at the lowest prices. References Daniel, F 2012, Head of Wal-Mart tells WFU audience of plans for growth over next 20 years, WINSTON-SALEM JOURNAL, [Online] Available at http://www.journalnow.com/business/article_5ad539d5-d616-55ba-ab27-aeaf45b06074.html [accessed: 28 November 2013]. Hassan, A 2012, The Value Proposition Concept in Marketing: How Customers Perceive the Value Delivered by Firms – A Study of Customer Perspectives on Supermarkets in Southampton in the United Kingdom, International Journal of Marketing Studies, Vol. 4, No. 3, pp. 68-87. Kotler, P 2008, Principles of Marketing, 12th ed, Pearson Education India, India. Michael 2013, What makes Wal-Mart successful?, [Online] Available at http://cheek0o.hubpages.com/hub/What-makes-Wal-Mart-successful [accessed: 28 November 2013]. Read More