Key Elements of a Customer-Driven Marketing Strategy - Assignment Example

Identify the key elements of a driven marketing strategy and discuss marketing management orientations that guide marketing strategy. It isvery clear in today’s competitive scenario that customers are the most important part of the business. As widely known, customer is the king because he is the single chief source of profit as well as development of the company. Hence the focus has shifted from transaction driven strategies to customer driven strategies. In a transaction driven strategy, each and every sale is considered one off and focus is only on that particular transaction. However a customer driven strategy focuses on the customer’s requirements and continued relationship of the customer with the company (Evans, O’Maley and Patterson, 2004, p137). Segmentation and Targeting: The key elements of a customer driven marketing strategy include market segmentation and targeting, differentiation and positioning. In order to develop a customer driven marketing strategy, the market is divided into smaller segments and the segments which will be targeted are chosen. This is carried out by collecting data related to the demographics, consumer behaviour, customer requirements and substitutes for the offerings in the market. These data are then carefully analysed to segment the customers based on the various factors. These factors are decided based on the products or services under consideration (Kotler et al, 2002, p185). The segments which require the product or service the most are chosen as the target segments. Differentiation and Positioning: The product offerings are differentiated from the competitors so that they create superior value to the targeted customers. These product offerings are positioned in the minds of the customers as desirable and reliable, relative to other offerings in the same segment. This provides the competitive edge to the business and creates value to the customer as well (Kotler et al, 2002, p203). A Customer driven marketing strategy should give importance to the three pillars of customer satisfaction. These are mentioned as below. 1. Customer Insight “Who are my [the] most valuable customers and how do I [company] build relationships with them?” 2. Customer Experience “How do I [company] create interactions that maximise the profitability of each relationship?” 3. Customer Alignment “How do I [company] structure the organization to deliver on the promise of customer-centricity?” (Peppers & Rogers, 2005). There are different marketing orientations that guide the marketing strategy. The four marketing orientations are discussed in the sections below. Production Concept: This marketing orientation is based on the fact that customers will prefer highly affordable and available products. This concept focuses on mass production of the common products or services and is marketed to the customers. The product is differentiated in terms of the features or additional services provided. The price is also set strategically as the products are abundant. Companies try and differentiate by offering products at low prices. This is achieved by effective production and thereby cutting costs in terms of economies of scale (Jobber, 2004, p5). Product Concept: The product concept is the idea that quality products with excellent features will be preferred by the consumers. In order to maintain and grow the customer base in a company with a product orientation, it is essential for the management to continuously improve the quality and performance of the product, so that they are not outdated in the ever evolving product market (Jobber, 2004, p5). Selling Concept: In this marketing orientation, the company promotes the product or service to the customers in a large scale. The major part of the budget is set aside for promoting and selling the product to the customers. This is a push type marketing wherein the product is pushed to the customer in terms of marketing, advertisements and selling strategies. Marketing Concept: The marketing concept is based on the customer requirements and the continuous efforts to exceed the customer expectations. Customer satisfaction is given high value and the management contributes a lot of effort and time to provide high quality service to the customers at an affordable price. Thus the businesses achieve their organizational goals. Market and competitor research play an important role and the companies thrive to outperform the competitors (Jobber, 2004, p7). Societal Marketing Concept: The societal marketing concepts emphasize the management to orient the marketing strategy for the overall good of the customers, organization as a whole and also the society. The customers’ long term interests and also the well being of the society in the long term are given importance. Corporate social responsibility (CSR) is being adapted by many companies to indicate that they value the social values and that business has to contribute to the well being of the society as well. This inspires an interest in the customers to utilize the services of the organization which gives them a feeling that they have contributed to the society as well (Jobber, 2004, p11). Explain companywide strategic planning and its four steps. Strategic planning forms an essential and important process for companies which are aspiring for continuous growth. It is the process wherein the companies analyze their environment and their capabilities and based on these facts; decide upon a goal or objective to be pursued. In order to achieve this goal, the necessary actions are decided strategically and implemented. An effective strategic planning focuses on the whole company bringing about a healthy change and in pursuit of the objective (McCabe and Wolfe, 2000, p42). There are four steps involved in the strategic planning process. They include strategic analysis, core strategy and planning, implementation and control. These steps are discussed in the sections below. Strategic Analysis: The first and foremost step in strategy planning is to analyze the current position of the company. This can be accomplished using various techniques such as SWOT (Strengths, Weaknesses, Opportunities and Threats), PESTEL (Political, Economical, Social, Technological, Environmental and Legal) or Porter’s five forces analysis. In SWOT analysis, the factors internal (strengths and weaknesses) and external (opportunities and threats) are listed. The Porter’s five forces analysis focuses on the analysis of the supplier power, buyer power, competitors, substitutes and barriers to entry. These techniques provide a fundamental understanding of the company on a holistic basis and also the potential opportunities for development (Johnson, Scholes and Whittington, 2006). Core Strategy and Planning: Based on the analysis carried out in the first step, the objectives for the specific planning period are enlisted. The core marketing strategy is laid out at the high level, followed by the detailed marketing plan at the tactical and operational levels. This forms the main part of the process, as this involves the formulation of strategy and how the company is going to achieve the selected objectives within the specific period (Kotler et al, 2002). Implementation: At this stage, the strategic plan is put into action at the operational level. The roles and responsibilities are clearly defined and communicated to all the specific resources in the organization. The employees involved should also be motivated to follow the plan and to achieve the targets. They should also be explained the benefits to the company as well as to themselves in achieving the targets (Kotler et al, 2002). Control: At this stage, the performance of the new plan is continuously monitored and necessary corrective actions are to be taken, in case of a discrepancy or deviation from the plan. The strategy and tactics are adjusted based on this measure of performance. Every time a change is included, the performance has to be reevaluated to figure out whether the new strategy is efficient (Kotler et al, 2002). These four steps in the strategic planning process have to be tailored to suit the industrial segment, the objectives, personnel and the scale of the company. When followed effectively, the strategic plan can be implemented across the whole company and the expected results can be obtained. Bibliography Evans, M., O’Maley, L. and Patterson, M., 2004, Exploring Direct and Customer Relationship Marketing, 2nd Edition, Thomson Learning, London Jobber, D., 2004, Principles and Practice of Marketing, 4th Edition, McGraw – Hill, Berkshire Johnson, G., Scholes, K. and Whittington, R., 2006, Exploring Corporate Strategy, 7th edn, Prentice Hall, Essex Kotler, P., Armstrong, G., Wong, V. and Saunders, J., 2002, Principles of Marketing, 2nd Edition, Prentice Hall, Milan McCabe, B. and Wolfe, M., 2000, ‘Making the (right) Customer King’, Global Telecoms Business, London, Mar 2000, Issue 46, p42 Peppers, D. and Rogers, M., 2005, ‘Loyalty Programs Must Create Real Value’, 1to1 Magazine, 29th August 2005 Read More