Case Studies In Customer Relationships - Assignment Example

CASE STUDIES IN MARKETING al Affiliation Contents Contents 2 Porsche: Guarding the Old While Bringing in the New 3 John Lewis, Middle Englands Retailer of Choice 5 Tesco: Every Little (Pricing Strategy) Helps? 8 Pegasus Airlines: Delighting a New Type of Travelling Customer 11 CASE STUDIES IN MARKETING Porsche: Guarding the Old While Bringing in the New 1. Analyse the buyer decision process of a traditional Porsche customer? The traditional Porsche buyer was more inclined to the state of product uniqueness and the rarity of the Porsche models. Notably, Porsche models were engineered for the upper class who could afford high-priced brands and those who need to create an image by the virtual of their car model. In short, Porsche was like a cloth which the buyer could “be seen in it” and hence part of their external image (Kotler & Armstrong, 2014). The buyers preferred a model that was uncommon and Porsche’s appeal to the narrow high-class consumers was suited for such customers. Secondly, the model was challenging to drive and looked dangerous, a feature that turned majority of the middle and low class consumers. Therefore, the financially successful people were drawn to a model that was a rare brand within the public domain. 2. Contrast the Traditional Porsche Decision Process to the Decision Process for Cayene or a Panamera customer. The traditional Porsche customer’s decision process is different from the buyers of the later models, Cayenne and Panamera. Cayenne and Panamera were two models that Porsche designed while they felt that the narrow high-class customer population was not enough to sustain innovation within the organization. While the traditional customers of Porsche purchased for self-image, the Cayenne and Panamera customers purchased for style and speed. Notably, the vehicle making was engineered for speed and was more stylish than the older models. For instance, the two brands could pick up speed of 65miles per hour within four seconds and attain as speed of 185 miles per hour, which are much higher than what older models hired (Kotler & Armstrong, 2014). However, the later models retained the Porsche image since they were expensive and were uniquely designed compared to competitive models. On this ground, the cayenne and Panamera models were part of the organization’s diversification strategies in an effort to broad their target customer range. 3. Which concepts from the chapter explains why Porsche Sold so many lower-priced models in the 1970s and 1980s? Porsche, between 1970 and 1980 launched its low priced models such as the 914 and 944 models that attracted a large number of customers. Notably, the organization made a lot of sales amounting to 60, 000 vehicles per year. The increase in sales can be attributed to the change of target class within the market. The company embarked on price-competition strategies as one way of penetrating the market and to increase its sales (Hayes, 2008). Resultantly, the company changed its marketing strategies from class towards mass marketing. While this was crucial in increasing its target market, the company lost its original image as “class-defined” company within the market (Kotler & Armstrong, 2014). The consequences is that the company engaged in a field where it was not specialized and was easily overtaken by competitors such as Nissan and Toyota who have specialized and have the potential to design better and faster models than Porsche at the same cost. Therefore, Porsche was bound to lose in the new venture and hence its bankruptcy in 1990. 4. Explain how both positive and Negative Attitudes toward a brand like Porsche Develop. How might Porsche changes consumer attitudes toward the brand? For optimal performance of a company, customer attitude is a priority that they must attach their attention all the time. Customer attitude is the drive that influences customers to or not to purchase certain products from a specific company. However, it is possible that organizations can change their customer attitudes when they shift their market strategies. For instance, changing a target class is one of the factors that may alter customer attitudes towards a brand. For instance, Mercedes Benz is vehicle that is linked to top class within the society and being expensive keeps it at that position. If Mercedes decides to change its target class and start producing brands for the low class, the customer attitude is likely to change (Hayes, 2008). For Porsche, changing its image as a ‘top-brand’ would result to change of customer attitudes. Evidently, this happened when the company targeted the low markets as a way of increasing its revenue. The impact was that its loyal customers were complete turned off as they perceived the company as a low class organization. 5. What Role does Porsche Brand Play in the Self-concept of its buyers? The idea of self-concept of customers refers to the way that customers create their identity by associating themselves with certain brands in the market. Self-identity is crucial as it is a reflection of a person’s class and top position within the public (Hayes, 2008). From its history, Porsche has been a brand that customers associate with for their class-identity. For instance, when they pick their children from school, every child wants to ride in the vehicle (Kotler & Armstrong, 2014). Therefore, their image largely depends on the way that the company uniquely creates its image. The implication is that companies have to make brands that protect the identities of their customers if they have to appeal to their loyalty. John Lewis, Middle Englands Retailer of Choice 1. What do you think that the John Lewis Brand Means to Customers? John Lewis brand is the ideal shopping place for middle-income customers in England. The company provides “one-stop” shopping store where the customers can acquire all their needs. As one customer points out, it is “the only true departmental store” where everything is available to satisfy the needs of the customers. In the recent past, customers have shown loyalty for stores that provide them with their needs and ones that strive to maintain customer-satisfaction at the fore front. The company gives the workers an opportunity to purchase both food and non-food stuffs within the same stores, which ensures that they do not lose loyalty to their customers. In addition, the company has used pricing strategies to compete with its customers by ensuring that they stock affordable products and work along with their employees in reducing the cost of their products. The company’s strengths will propel it during the harsh economic times within tithe market (Kotler & Armstrong, 2014). To begin with, the companies strong marketing strategies are bound to attract more customers which is crucial during harsh market times and its unique pricing model will ensure that the customers can afford their products even when their earning fall slightly. 2. What is John Lewis Actually Selling? John Lewis Company is selling value, convenience and quality products to their customers. The core benefits of the company include the convenience of meeting all food and non-food needs at one shopping place. They can satisfy all their needs by a quick visit to John Lewis stores rather than visit different stores where the can purchase each item differently. John Lewis guarantees them of quality and price-sensitive products that precisely match the size of their pockets. Besides the actual products, the augmented products that the organization provides include customer care. The organization has put customer care at the fore front of their marketing plan as a way of ensuring that their customers receive the best services during each and every visit. Product delivery as well is part of augmented value that customers enjoy when they purchase the products within the companies online portal (Kotler & Armstrong, 2014). On this ground, the company’s success is directly related to the desirable, actual, core and augmented products that obtain from purchasing from John Lewis. 3. What Reccomendations Would You Take to the Managing Director for the Future of the John Lewis? In future, John Lewis Company is bound to experience intensive competition and the middle and the rise in income tax is likely to impact the purchasing power of its customers. The ability of the company to survive in the long-term will depend on the ability of the management to foresee future threats and to adjust it investment strategies. As the England government seeks to raise income tax, it is crucial that the company finds a way of adjusting their prices to ensure that their products remain affordable to their customers. One crucial strategy would focus on cost-reduction strategies to ensure that they can offer competitive and affordable prices to their customers. Besides, competition intensity as new market entrants invade the market implies that the consumer bargaining power is bound to rise (Kotler & Armstrong, 2014). Therefore, the company should appeal to a broader range of customers, within the domestic and international markets. This way, the company can maintain optimal profits even after they have reduced the product prices to match their customer’s purchasing power. 4. Can the Elements of a Successful Service Model like John Lewis really be transferred to Public Services? Evidently, the public service companies have a lot to learn from John Lewis’ success customer service model. The success of every organization, whether public or private, depends on the ability of the organization to put their customers at the central position. Efficiency in service delivery is core to the performance of an organization within the contemporary public sector. One of the weaknesses of the public sector has always been the ability to focus on customer-service as a driver of efficiency. The public organizations can learn how to treat their customers in a more professional approach while maintaining the quality of the services. For instance, a public hospital can use this model in ensuring high performance within the organization. For instance, a pay-for-performance approach within public hospitals would be crucial in ensuring that hospital employees provide high quality and quantity services. This would be similar to John Lewis’ approach of paying employees depending on the company’s turnover value. However, public hospitals should anticipate a challenge while trying to implement changes within their organizational models (Kotler & Armstrong, 2014). They need to acquire new leadership styles and influence their employees to cooperate during the time of transition. Tesco: Every Little (Pricing Strategy) Helps? 1. Does Tesco’s Promotion Pricing Campaign, the big price drop, deviate from Cohen’s Original motto of pile them high and sell them cheap? If so, how? Tesco is one of the companies that have used different pricing strategies as a way of increasing their market share. Tesco’s “the Big Price Drop” and Cohen’s “Pile them high and Sell them Cheap” are two different price models that the company has used in promoting its products. One difference among the two models is that the latter focussed on priced reduction based on sales while the former focussed on reducing prices to attract customers. In the “Pile the High and Sell them Cheap”, Cohen intended to increase its sales by buying more goods, which in turn would lead to further product price drop. However, the “Big Price Drop” was a strategy that aimed at lowering prices to increase the volume of sales (Kotler & Armstrong, 2014). While the earlier approach was successful, the later approach failed since price reduction during a competitive time does not automatically result to an increase in the volume of sales. A drop in price is followed by a similar response by other market competitors. 2. How has Tesco used pricing to segment the food market and position its offering? Why are customers willing to pay different prices for the same category of food (e.g. a tin of baked beans, a chicken of adopting)? Tesco has successfully managed to adopt different price architectures within the market by appealing to customer needs and economic abilities. The company introduced the portfolio of own-brands by observing different market requirements and implementing different positioning strategies. From a close observation different market segments have customers with different purchasing power. Therefore, the idea of “cheap” varies from one market to the other and hence relative prices apply within each segment (Kotler & Armstrong, 2014). Naturally, customers compare prices within one market segment. Therefore, Tesco saw the opportunity to sell the same products at different prices within different market segments. The force that attracts customers to Tesco’s stores is the fact that Tesco offers relatively cheaper prices within the same market segment as compared to other companies. Therefore, the company is successful in implementing different pricing strategies within different target markets. 3. How can Tesco’s Clubcard assist managers in developing pricing strategies? Tesco’s Clubcard can be used in as pivot in supporting the managers pricing strategies. The Clubcard is a strategy through which Tesco rewards customer loyalty and sustains this loyalty in the long-term. All buyers can acquire points that in turn will help them get price discounts in the long run (Ryan & Jones, 2012). Therefore, the company rewards loyal customers through price reduction. Discounting is one of the price reduction strategies that attract customer loyalty within organization as they feel that such companies reward their consistent trust. Secondly, the Clubcard strategy can help managers win new customers in the market as customer are always looking for companies that they can form long-term relationships with. Increasing the number of customers visiting their shops will be a milestone in increasing their profits in the long-run. Resultantly, the company can lower their prices as they enjoy loyalty from a bigger crowd of customers (Kotler & Armstrong, 2014). Therefore, managers can leverage of the Clubcard advantage to provide winning prices in a competitive market. 4. Since 1919, which major pricing strategies have tesco demonstrated evidence of adopting? An analysis of Tesco marketing plans shows that the company has used different price-based marketing models to win the market. Initially, the company employed a penetration strategy by using the “Pile them High to Sell the Cheap Strategy”. In this strategy, the company intended to build loyalty by offering the best prices to their customers and to launch a price competition at its time of market entry (Berndt, Bui, Lucking-Reiley & Urban, 2014). This was crucial to win the customers during a time when customers. Secondly, the company has used a promotional pricing strategy by providing the customers with Clubcard in which they customers get bonus for their loyalty. While this strategy does not contribute to profit initially, it seeks to maintain the customers and targets new customers who recognize discounts as important rewards for loyal customers. Secondly, the company has engaged high end price-based strategies in which it has employed different price-architecture to win different target markets (Kotler & Armstrong, 2014). In this strategy, Tesco serves the high class customers with high price products, while selling the same products at cheaper prices within low-class markets. The ability of the organization to deploy different pricing strategies within the market has contributed to its high performance within the market. 5. Cliona Lynch predicts that Tesco will move away from price deals and focus on the quality and range of its products in the future. Why do you think this is so? Do you believe that price deals should play a role in Tesco’s future promotional strategies? Cliona Lynch’s claim that “Tesco will move away from price deals and focus on the quality and range of its products in the future” is reasonable. Evidently, too much focus on pricing strategies has proved ineffective in its marketing plan. To begin with, there “big price drop” did not result to an increase in volume of sales for the company. The reason why pricing strategies have become ineffective is because price competition has become the prime focus for many organizations; a drop in one company price results to similar drop by other companies. Therefore, the customers are acquiring higher sovereignty while companies are losing their profit margins (Ryan & Jones, 2012). Therefore, it is crucial that Tesco shifts its strategy and quality would be another way to launch competition in the market. For instance, the company would focus on keeping their prices stable while improving the quality of products and customer service. However, price remains a point of focus since the customers are price-driven and are always looking for cheaper products (Kotler & Armstrong, 2014). The company needs to focus on strategies that will reduce their expenses and streamline their supply management strategies. This way, they can genuinely offer lower costs and while maintain their profit margins at a high level. Pegasus Airlines: Delighting a New Type of Travelling Customer 1. Give Examples of the needs, wants and demands that Pegasus customers demonstrate, differentiating these three concepts. What are the implications of each Pegasus practices? Pegasus needs are the primary necessities that an airline company must fulfil if it has to be considered as an option for service delivery. Basically, what the customers need is a means of transport that will be reliable in taking them to the desired destinations. Customer wants refers to desire for products that are not necessarily essential but the customers wish to have them. Pegasus customer’s wants include efficient services and high quality services. While these may not be primarily essential, Pegasus has appealed to them as part of the marketing strategy (Ryan & Jones, 2012). Customer demands includes those things that they wish to have depending on their abilities. For instance, Pegasus customer demands economical flights due to the price-sensitivity of the economy (Kotler & Armstrong, 2014). This is why Pegasus has paid attention used pricing strategies to provide affordable services to their customers. 2. Describe in Detail all the facets of Pegaus Product. What is being exchanged in Pegasus transaction? Pegasus product includes the exchange of efficient service and trust. The company provides its customers with reliable, economical and quality flights. The company values convenience by ensuring that they can control delays or provide their customers with alternatives when delays arise. On the other hand, the company obtain trust and loyalty from its customers which are essential for its survival (Kotler & Armstrong, 2014). Therefore, the customers can trust the company and consistently books flights with them, which is the main reason for the survival of the company. On the other hand, customer gets real value for the money they pay. 3. Which of the five Marketing Managemnt concepts best applies for Pegasus? Customer service is one of the marketing management strategies that Pegasus has used to win the market. The company has put value for its customers by providing them with reliable services at any time that they need them. The company puts the customer needs first, while delivering its services. For instance, the company ensures that their customers do not suffer from delays by refunding their cash in case of a 3 hours delay, or cash and a ticket for 5 hours delay. Therefore, the customer’s plight is central in its marketing strategy. Besides, the company has engaged pricing strategies by providing economical flights that are pocket-friendly (Kotler & Armstrong, 2014). Satisfying the customers’ demands through price based competition has ensured survival for Pegasus. 4. What Value Does Pegasus create for its customers? Pegasus creates value for its customers in different way. The organization recognizes the mutual relationship that organizations must establish with their customers to ensure survival within the market. The main focus of the company is to satisfy the needs of the customer and to offer services the way customer want them. To begin, the company considers the changing customer patterns and improves their airline services to suit these needs. The company loves its customers and recognizes the value of ensuring the customers’ demands are provided by the airline. The companies provide stable prices to ensure that customers can expect the same prices or lower at all times. This is crucial to ensure that services get better every time. Secondly, the company emphasizes value for its customer’s cultural appeals as they seek to provide reliable transport to ensure they catch with their families wherever they need to (Kotler & Armstrong, 2014). Therefore, the company wins customer trust by attaching value to their services. 5. Is Pegasus Likely to Continue Being Successful in Building customer relationships? Why or why not? From a close analysis, the Pegasus is likely to continue building customer relationships in the long-term due to their ability to focus on market changes. Flexible management within the company allows them to observe changes in customer tastes and hence adjusts to these changes (Smith, 2013). Consistently, the company has embedded its marketing tactics to customer preferences, which ensures that even new customers fit within the airlines (Kotler & Armstrong, 2014). While the company anticipates more changes in the market, including changes in customer tastes, it is clear that remaining market focussed would give the company an upper hand in sustaining customer relationships. Bibliography Berndt, E. R., Bui, L. T., Lucking-Reiley, D. H., & Urban, G. L. (2014). The roles of marketing, product quality, and price competition in the growth and composition of the US antiulcer drug industry. Hayes, B. E. (2008). 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