Marketing and Types of Customer Information - Essay Example

MARKETING Marketing can be defined as an organizational function and a set of processes for communicating, creating, implementing and delivering value to customers and for managing customer-business relationships in a way that will benefit both the organization and the stakeholders involved. Such processes succeed in moving people closer to making a decision to purchase and facilitate a sale1. In the long run, these processes will anticipate, identify and try to satisfy customer requirements successfully and profitably. 2 Types of Customer Information Customer information can provide critical information on buying trends, habits, opinions and needs of prospective and current customers. Examples of costumer information for this hand-held computer company are; i. Businesses have a mix of bad, good and best customers in the market. Market information helps to distinguish between these groups of people and finally come with a strategy that is applicable to all. For a company, dealing with hand-held computer games, the information needed in the market will consider; ii. Customer preference-Since there are many varieties of computer games, the researcher will specifically look for what is being enjoyed most by the customers. If it is racing or action backed gaming, then the company should dwell more on that line iii. Customer age-just to be sure what ages of the customers are attracted to the products, it is important to know the exact ages of the group Computer gaming is common among the young people and it would be clear if the company knows the clear age bracket for technical and regulation purposes. iv. Customers’ location- the geographic location of the customer is important especially where the company is going global. Issues of culture, social behaviors and economic communication processes will be very important. Exporting products (electronic-computer related) to the Antarctic will need technical considerations on terms such as climatic and transportation costs. v. Consumer education- computer games are electronically developed and needs a lot of skills if not knowledge to master and enjoy the game. It would be very impractical for the company to market such products in remote parts of Kenya where even electric power is a nightmare let alone availability of computers. vi. Occupation of costumers-very busy customers will find little time for computer games. It is therefore important that the company seeks to find out targets that are keen to having computer games for leisure. vii. Purchasing power- a company cannot just sells the products where there is little demand for it. Therefore it is necessary that the economic ability of the customers is taken into consideration before marketing strategies are implemented. Customer Information Research Techniques Most businesses use one or more of the five basic methods-surveys, focus groups, personal interviews, field trials and observations. These techniques can be primary in nature (collecting information directly from customers) or secondary (information that has been collected by other research companies) 1. Surveys In survey methods, concise, brief and straightforward questionnaires are used to collect consumer information. Surveys are in many forms3 1. In-person surveys-this is conducting one on one surveys mostly in populated locations such as shopping malls and town centers. The researcher presents people with samples of products, packages and other informative materials that describe the company and immediately get their feedback. The problem with this method is that it is very expensive to conduct but provides 100% accurate information. 2. Telephone surveys-this method involves the use of telemarketing techniques on special but selected groups of customers. The problem with this is that it is difficult to convince people to participate and also there is consumer resistance to relentless. However, it is also costly to conduct but not costlier than in-person surveys 3. Mail surveys-it is good for small businesses that need to reach a broad audience. Although they generate lower responses, they are much cheaper than in-person and telephone surveys 4. Online surveys-it is the cheapest technique to collect customer information. It usually generates poor unpredictable responses because it is difficult to control the respondents’ honesty. The internet and emails are the common tools for online surveys. 2. Focus groups It involves asking questions or leading topics in a discussion that are related to their preferences to the product. Such discussions take place at neutral locations with the use of videos that can be used later to analyze the responses. Use of at least three groups provides balanced result. 3. Field trials It involves placing a new product in the stores in order to test the responses to the selling conditions. Field trials directly help the company make quick product modifications or just adjust prices to see responses. They are considered to be very effective in getting first hand information about the customers. 4. Observations Individual responses to questions and interviews are different from the actual behavior of the customer when buying or when using the product. Observations therefore involve the use of video tapes to monitor buying trends in stores, product usage and home and the frequency of product use. 5. Personal interviews Just like focus surveys, personal interviews use open-ended unstructured questions to collect information from desired customers. It provides more subjective data than any other method because the information is genuine and firsthand (Hoffman, 1996). However, the information does not represent the views a larger majority of the people hence not very reliable. Marketing Strategies A strategy is a pattern of activities that seek to achieve the objective of an organization and adopt its scope, resources and operations to environmental changes, it is normally a long term plan of action designed to achieve a particular goal. A strategy distinguishes a course of action by its hypothesis that a certain future position offers an advantage of acquiring a gain. Offensive and defensive marketing are marketing welfare strategies that use military-like metaphors to design, implement and craft business strategies that apply to marketing products. There are two key types of strategies that are linked to offensive and defensive styles of the military but in business terms, the two can provide a company with policies to achieve their goals and objectives Offensive Marketing Strategies This is a type of marketing strategies that are designed to obtain a huge market share as an objective in response to increased competition from a specific target competitor. It is also designed to obtain key customers who are able to obtain high margin market segments and high loyal market opportunities. Principles of Offensive Marketing Strategies There are four fundamental principles that offensive strategies rely on especially when it comes to global business marketing4. These are; i. Marketing surprises are important when they are implemented quickly. Launching an attack very fast will get people unawares because the element of surprise is important for customer acceptance. ii. The attack should be launched on a narrow front because it will provide the advantage of being able to concentrate all the forces at a target point. iii. The strength of the target competitor is assessed and all the allies that might offer support to it when it is attacked. One target is usually chosen at time and attacked. iv. It is possible to a weakness of the competitor and from that point of view, it can be easily attacked. Considerations of how long the target will respond to realign and come to the rescue of that particular part are very important. Types of Offensive Strategies Encirclement Strategy This strategy is also called the envelopment strategy and is a more subtle, gentle, broader and a bit non-offensive but harmful way of attacking the competitor. Borrowing from its name, it involves the circling of the competitor and attacking it. Normally, this kind of attack is undertaken in two ways. i. Introduction of a broader range of products that are similar to the competitor’s products and each of these products will get a share of the same market the competitor is. In the long run, the competitor will be demoralized, weakened and discouraged leading to a state of siege of the competitor. This first method will ensure that full scale confrontation is avoided between the attacker and the target. ii. The encirclement can also be based on market niches rather than the products themselves. In this case, the market share is liberated from the target competitor via the expansion of market niches that surround it. This strategy is suitable when the attacker has; a decentralized organizational strategy, strong product development resources, enough resources to operate in multiple segments at the same time, and when the market segments are relatively free of well endowed competitors and finally when the market is loosely segmented in its ability to concentrate on one product i.e. being dynamic Frontal Attack Strategy Frontal attack strategy is an assault that is taken head-on with the target competitor. This strategy involves the marshalling of all the resources within the reach in order to attack the target. Managerial, financial and technical resources are brought in to attack the target at once and ensure that the marketing objective is achieved. It will also involve the gearing of all sections of the company; from production, technical teams, human resources and the sales force to unite for the course. Frontal attack is suitable when; the market is relatively homogenous, the brand equity is a bit low, customers’ loyalty is also very low, little differentiation in product quality, the target competitor has comparatively limited marketing resources, attacker himself has relatively strong resources that can sustain the competition The tactic behind this strategy is conducting massive advertisements, promotion or developing a product that is capable of competing favorably well with what the competitor has. However, this strategy has a few limitations; first, it involves the use of massive resources and by any chance that the fight is not successful, huge losses will be encountered hence making it very expensive. Secondly, if the target realizes your intentions early enough, it will be able to counter the moves very strongly which will mean that the chances for success are very limited. Because of these reasoning, the use of frontal strategy is very rare and if used, in many cases, there are limited success stories. Research has shown that once a business conquers a market, it is very difficult to overthrow it especially because it will have accumulated enough resources to counter ant assault and more importantly, the experience and market information it has achieved. Leapfrog Strategy This is the most common strategy that allows the attacker to bypass the enemy’s defensive forces and styles in the marketing arena. It involves either the creation of business models or development of new technologies that are more advanced than what is available in the market. This strategy is revolutionary in nature in that the rules of the game are rewritten altogether. The introduction of play stations for example bypassed the defenders of inbuilt computer games. It means that the company which introduced play station won the game without a lot sweat which is 100% efficiency. Flank Attack Strategy Flank strategy is designed to pressure the flank of the enemy so that the competitor’s line is turned inwards through the flank. The attacker takes advantage of the enemy’s chaotic status and utilizes more on that. The main disadvantage of this strategy is that it can draw useful resources from the central store making the attacker more vulnerable to counter-attack. In a market for instance, the attacker must not consider the mission more critical for it and it uses more subtle advertising strategies such as personal selling and discrete promotional measures. This strategy is used when there are certain segments that are not well served by the existing competitor. The attacker must also have moderately strong resources to defend niches within the market. Defensive Marketing Strategies These strategies are necessary to protect the company’s market or mind share, profitability or positioning. Principles of Defensive Strategies There are five fundamental principles that defensive strategies5 depend on; The law Newton’s third law of motion-counter an attack with equal and greater force-applies i. Only important market positions and shares are protected ii. It is important to scan frequently for potential attackers and study its tactics well iii. The best method to defend is to attack iv. Building new markets and rectifying weak points in itself is a way of preparing well for an imminent attack. Flank Position Defensive Strategy Although flank strategy can be used by a market attacker, it can be used also as a defensive tool to counter attacker’s moves. It involves the deployment of resources to encounter a flanking attack which curves inwards, instead, it tries to bend it outwards. The main limitation for this strategy is that the company can be distracted from its primary objectives and goals hence limiting resources where they are needed urgently and mostly by the company. The company introduces new products, brands and technologically improved features that will reposition the existing products and others that can be produced later. Position Defence Strategy This strategy is not a strong defense in that it involves taking a fortified position in which a siege can arise6. A barrier can be set up to deny other companies entry or copyright of the products in order to promote customer satisfaction, proper purchase rate, or improve distribution patterns, patent protection, government monopoly protection status or brand equity etc. it is usually used where markets are homogenous. Mobile Defence Strategy This involves constantly shifting resources while developing new tactics and marketing strategies. This strategy escapes any form of attack by creating a moving target that is hard to attack and in the process implementing a flexible response mechanism if it is attacked. The company can change advertising tactics, explore new promotional focuses and changing market segments. However, this strategy requires strong marketing research skills and entrepreneur technologies that are difficult to attack. Management Controls Management controls are the organization’s procedures and policies that guide, plan, organize, direct and control program operations. Management controls ensure that; i. Programs achieve their intended results ii. Resources are used where they are needed most and consistently with the organization’s mission/vision iii. Resources are protected from misuse, mismanagement and fraud iv. Policies, laws and regulations are adhered to v. Timely, reliable and useful information is gathered, maintained and used in decision making process Management control is therefore the process through which standards for performance of people or processes are set, applied and finally communicated. It requires the use of mechanisms to monitor activities and take corrective actions if needed7. The control process occurs in four different but continuous steps; i. Establishment of performance standards- during the planning process when objectives are being set, standards are created which are an explicit statement of expected results ii. Measurement of actual performance- this will entail the collection of data, production tallies, and inspection reports and sales tickets. Management by walking around also provides an overview of what is actually happening iii. Comparison of achieved performance with established standards- the range of variation is determined (acceptance variance) and compared with what is actually expected. Huge margins will signal that there is a problem somewhere and some form of rectification is required. iv. Taking corrective actions- supervisors and managers examines the cause of the deviation and then formulate a way of minimizing it. Types of Management Controls i. Financial controls Financial controls are designed to enable the organization to achieve its profitability standards. This can be done by the use of a budget where resource allocation is planned in advance. Most budgets ensures that there is equal consumption among the various activities and if there is any deviation in consumption standards or trends, then, the managers can trace any misappropriation of funds and be able to rectify the anomaly ii. Time controls Time controls relate to time management, schedules and constraints in the company. Time is money and it should be carefully utilized. Efficient time control results in increased profits and better productivity. iii. Other controls There are other minor control sectors that are considered either not very insignificant or fall under the above controls. These are; material controls, equipment controls, human resource controls, sales controls etc Operation control methods8 i. Total quality management (TQM)-TQM is used where accurate outcomes are desired and it involves consistent monitoring of the process e.g. on a daily or weekly basis. ii. Statistical process control- it is the use of statistical procedures and methods to examine if operations are being carried out as expected. A control chart is an example of this whish displays results of collated data over a period of time. iii. Inventory control method- it is usually used where large institutional data is being sampled and analyzed. Computer and simulation models are used in this case. Conclusion Defensive and offensive strategies are crucial for this hand-held computer company in order for the company to build a stronger market for its products. With increased competition, it is important that customer information is obtained in advance before any strategy is chosen through market research. References Blythe, J. (2001): Essentials of Marketing: Market research methods, 2nd edition: New York, Prentice Hall Brassington, F. and Pettit, S. (2000): Principles of Marketing, 2nd edition: New York, Prentice Hall, and Harlow Dibb, Baker, M. (2000): Marketing Management and Strategy, 3rd edition: London. Macmillan Business Hoffman, D. and Novak, T. (1996): Marketing in Hypermedia Computer-mediated Environments: - Conceptual Foundations: Journal of Marketing, Vol. 60(July), pp 50 - 68 Hoyer, W.D. and McInnis, D.J. (2001): Consumer Behavior, 2nd edition: New York, Houghton Mifflin Company Kotler, P.; Armstrong, G.; Saunders, J. and Wong, V. (1999): Offensive and defensive Strategies of marketing, 2nd Edition: New Jersey, Prentice Hall Kotler, P. (1996): defensive marketing strategies; 4th European Edition Prentice Hall. Harlow (UK) Lancaster, G. and Massingham, L. (1999): consumer information; Oxford Press, UK. Lovelock, J. (2001): Services Marketing, People, Technology, And Strategy: New York, Prentice Hall Mark, D. (2001): Management control; 3rd Edition of Chartered Institute of Marketing, Washington, U.S Matthew, S. (2001): Marketing concepts and Strategies; 4th European Edition. Houghton Mifflin, Boston Read More