Customer Orientation Perspective - Research Paper Example

STRATEGIC MARKETING: ORIENTATION PERSPECTIVE INTRODUCTION Effective strategic marketing begins with the development of a plan that outlines goals, targets clients, identifies strategies, and sets timelines for achieving these goals. The planning process associated with strategic marketing helps businesses to focus on profit making, ensuring the survival, growth, and ultimate success of the corporation or organization (Webster, 1994). Driven by management, strategic marketing is the process of evaluating an organization’s needs, examining and choosing among candidate business strategies, and setting into motion an effective implementation plan for achieving desired goals. The majority of marketing scholars addresses strategic marketing as a continuous, long-term process, one that is concerned with clarifying the present state of the institution, a series of coordinated steps along a clearly defined route, while others speak to strategic planning as the organization’s defining of a mission and strategies to achieve goals and objectives in the most effective manner. This paper aims to examine and analyze customer orientation perspective of strategic marketing, with a specific focus on customer orientation, consumer behavior and relationship marketing. CUSTOMER ORIENTATION In a customer-oriented organization, the process of identifying and responding to the interests and needs of the customer is crucial, and must be viewed as the key element of the company’s strategic business plan. In a customer-oriented organization, quality is defined by the one who uses and ultimately benefits from the specific product or service, that being the customer or client. Those at the helm of successful businesses realize that the focus of the organization must be aligned with creating customer satisfaction above all else (Hinton & Schaeffer, 1994). Everyone’s job is defined by the customer. It is the customer, after all, who ultimately, defines how well the product or service is to be created, or delivered (Webster, 1994). As Jack Welch, the highly acclaimed CEO of General Electric, often reminded his employees, “Companies can’t give job security. Only customers can!” (Kotler, 1999, p. 20). The managers of responsive organizations focus on customer satisfaction, and make every effort to satisfy the needs and wants of the customers (Kotler & Armstrong, 1999). Forler Massnick, author of The Customer is CEO (1997), stakes a claim for TQM (Total Quality Management) by emphasizing that value is defined and determined by the customer. This practice of continuous product improvement, viewed through the eyes of the customer, needs to be the top priority of the company. Tom Peters, a strong proponent of the practice of keeping the customer informed and educated, believes that organizations need to achieve the perception of control through information and explanation. “Pay attention to the market. Listen to your customers. Spend megabucks collecting customer information, to the point that you can treat even mass-market customers as individual marketing segments” (1994, p. 108). Managerial decisions are often dictated by the needs and desires of the customers. “Customers care nothing for our management structure, our strategic plan, or our financial structure. They are interested in only one thing: results, the value we deliver” (Hammer, 1997, p.27 - 28). Treacy and Wiersema (1995) address the concept of customer intimacy, the practice of studying and focusing on customer’s unique needs and behaviors. They stress the importance of developing client driven operations to satisfy them and espouse the position that deep and lasting customer relations are created by developing systems of providing regular feedback, flexible partnerships, easy communication, and, ultimately, a value-laden product or service designed specifically for the customer. Another definition of marketing, built around the concept of value-laden benefits, is that “marketing is the process of defining, developing, and delivering value” (Webster, 1994). Under Webster’s definition, the customers needs, perceptions, and use define value, while the company’s capabilities, resources, and skills are integrated into the strategic plan. See Figure 1 for illustration of this concept. Figure 1 However, the concept of delivering value includes activities beyond that of producing tangible quality products and services. The term value, as it relates to customers and consumers, includes the quality of goods and the provision of exceptional services, along with an enduring process of communication, personal selling, special warranties, installation and follow-up attention. The prestigious Malcolm Baldrige National Quality Award provides criteria for understanding and evaluating performance excellence in organizations, and recognizes the category of Customer Focus and Satisfaction as the culmination of all of the efforts of an organization. The highest number of points are delegated to this category, as participating agencies are assessed by the quality of their relationships with customers, and their knowledge of customer requirements. Supporting the concept of “The customer is the arbiter of quality” (Seymour, 1994, p. 17), this customer-oriented category is measured by how effectively the company establishes, monitors, and manages its relationship with customers. Companies that do well in this category are relentless in collecting data on customers. They are knowledgeable about competitor’s products and customers and they compare their customer-satisfaction ratings with those of the competition. These companies are recognized for the long-term relationships they have developed with customers, and their ability to address their product or service from the customer’s perspective. CONSUMER BEHAVIOR Prior to the sale of a new product, strategic marketers need to know how their consumers, or customers, the users and benefactor of products and services, will respond to their product and the various marketing stimuli. Marketers therefore need to study the psychological factors that influence individuals and groups of people to make decisions regarding specific purchasing situations. These factors include motivation, perception, culture, learning, attitudes, personality and lifestyles. “The challenge for the winning organization of the future is to accurately predict and respond to the rate and breadth of the market changes that will inevitably cut across customer groups.... The new model of successful business will be based on understanding specific customers, their requirements, and their expectations” (Hanaka & Hawkins, 1997, p. 171). Quality, then, is defined by the customer, and the improvement of products and services must be aimed to satisfy customer requirements (Peters, 1994). Understanding the customer’s desires and motives are key indicators for collecting data regarding customers buying orientations. Supporting this theory, Reich (1998) asserts: Customer behavior holds the key to understanding what it is that moves specific groups of prospects closer to a decision to commit and buy. Or what it is that fortifies an already favorable buying climate. Psychology plays a vital role in the process of building customer profiles, modeling and segmenting using finite criteria (p.27). Marketing research departments are established to examine the impact of changing social influences. Grouped by their common values and experiences, customers are then assessed according to their buying behaviors. Strategic marketing plans, especially those that identify unique and creative marketing mix configurations, are established for each of these sub-cultures. The resulting data of the customers’ response are carefully collected and analyzed (Boone & Kurtz, 2000). In addition, other forces of stimuli need to be considered, such as political overtones, changing cultural environments, current economic trends, and technological advances and opportunities (Kotler, 1999; Kotler & Armstrong, 1999). As all of these numerous factors influence patterns of customer behavior, marketers must stay abreast of, and be responsive to changing forces at all times. Attention and responsiveness to consumer behaviors go beyond that of purchasing of a product or service. It is imperative that follow up procedures are implemented in order to determine the buyers level of satisfaction. Kotler (1999) asserts that the relationship that is developed between the consumer’s expectations and the perceived performance of the product, or service, will be the determinant of satisfaction. This is an important aspect to track, as it will establish new customers and encourage the retention of present customers. RELATIONSHIP MARKETING Within recent years, the focus of the buying process has shifted from a one-time business transaction to the development, nurturing, and enhancement of long-term, ongoing business relationships. The purpose of such a strategy is to retain the customer beyond the sale, and to encourage repeat purchases and loyal customers to the point where buyer and the seller become interdependent (Kotler & Armstrong, 1999; Webster, 1994). Viewed by Tom Peters as “the relentless pursuit of an almost familial bond between customer and product” (1994, p. 189), Peters cites the highly acclaimed relationship marketing practices of Saturn, the prospering automotive corporation, whose policy is to embrace the customer as a friend - an intelligent friend - from the moment the customer steps into the showroom. Implementing a relationship-marketing practice requires a shift in the typical buyer-seller roles. Under relationship marketing, the buyer and seller often engage in joint planning and forecasting. Both parties may develop and execute the final contract; engineers from both the buyers and customer’s companies may co-design the product, while costs and fees may also be determined by representatives from both teams. By customizing the offerings of distinguished products and services with customers, businesses can build and sustain quality, long-term relationships that may lead to a formof strategic partnership (Webster, 1994). In a relationship, it is only natural for both parties to be consistent in their communications with each other. To build relationships with customers rather than merely to be involved in transactions, the marketer must integrate communication forms to build a consistent approach that in turn will build the relationship (Schultz, Tannenbaum, & Lauterborn, 1997, p. 40). In some cases, organizations will extend the traditional definition of customer, using terms such as stakeholder and partner when referring to customers, suppliers, employees, community members and investors. The strategy here is that all parties involved in the business transaction are working together in a mutually satisfying, and sustained relationship, with both buyer and seller deriving meaningful benefits from the transaction. By fostering ongoing customer involvement and participation, the customer gains the benefit of a more personalized service or product, while the seller has provided multiple opportunities for direct, immediate feedback. The development of a deep and trusting relationship with clients is vital in gaining their long-term satisfaction, retention, and recommendation. This process of creating, maintaining and enhancing strong, value-laden relations with stakeholders, those having or holding a special interest in the organization, is crucial to the viability of the buyer-seller relationship (Kotler & Armstrong, 1999). “Listening to current clients represents perhaps die best source for developing and testing new products and services. Clients buy more, and more quickly, from suppliers who know them well and whom they trust” (Duques & Gaske, 1997, p.36). Peters (1994) continues the idea, explaining that “if you’re out there listening (and asking) each and every day, you’ll develop an ongoing dialogue that will allow you to nip problems in the bud and nurture improvements to their fullest bloom” (p. 130). Massnick (1997) too, emphasizes the importance of developing and nurturing an ongoing relationship with customers, maintaining that the costs to an organization are five times higher to attract new customers than it is to retain current customers. REFERENCES Boone. L. E. & Kurtz. D. L. (2000). Contemporary marketing (10th ed.). Fort Worth. TX: Harcourt Brace. Duques, R. & Gaske, P. (1997). The “big” organization of the future. In F. Hesselbein, M. Goldsmith, & R. Beckhard (Eds.), The Organization of the future, Drucker Foundation Future Series (pp. 33 - 42). San Fransisco: Jossey-Bass. Hammer, M. (1997). Beyond Reengineering: How the process-centered organization is changing our work and onr lives. New York: Harper-Collins Publisher. Hanaka, M. E. & Hawkins, B. (1997). Organizing for endless winning. In F. Hesselbein, M. Goldsmith, & R. Beckhard (Eds.), The organization of the future. Drucker Foundation future series (pp. 169 - 176). San Francisco: Jossey-Bass. Hinton, T. & Schaeffer, W. (1994). Customer-focused quality. Englewood Cliffs, NJ: Prentice Hall. Kotler, P. (1999). Kotler on marketing: How to create, win, and dominate markets. NY: Simon & Schuster, Inc. Koder, P. & Armstrong, G. (1999). Principles of marketing (8th ed.). Upper Saddle River, NJ: Prentice Hall. Massnick, F. (1997). The CEO is customer. How to measure what your customers want – and make sure they get it. New York: Amacon Press. Peters, T. J. (1994). The pursuit of WOW! Every persons guide to topsy turvy times. New York: Random House, Inc Reich, Ken (1998). IMC: Through the looking glass: Straight talk on the anatomy of a vital integrated marketing communication concept. Communication World. 15. 26-28. Schultz, D. E., Tannenbaum, S. I., & Lauterborn, R. F. (1997). The new marketing paradigm: Integrated marketing communications. Lincolnwood, IL: NTC Publishing Group. Seymour, D. (1994). The Baldrige cometh. Change. 26. 16-27. Treacy M. & Wiersema, F. (1995). The discipline of market leaders: Choose vour customers, narrow your focus, dominate vour market. Reading, MA: Addison-Wesely Publishing Co Webster, F. E. (1994). Market-driven management: Using the new marketing concept to create a customer-oriented company. New York: John Wiley & Sons, Inc. Read More