Chapter 2

Being Customer Oriented

Market Orientation Customer Orientation

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Customer Commitment:
How Market Leaders Do It
Through masterfully creating and delivering value to their highly satisfied and loyal customers

Greatness in marketing and customer services becomes a function of attitude, not resources.

The Traditional Marketing Concept

Customer satisfaction at a profit Stresses conquest marketing (getting new business)

Relationship Marketing Concept (RMC)

Evolved due to highly competitive global service markets

2 objectives: Maintaining and upgrading customer relationships (retention strategies) Growing business by finding new customers and creating long-term value

Becoming Marketing Oriented

Marketing Variables Starting Point Marketing Focus Sales Oriented Organization Product/service Market Oriented Target markets Customer needs

Customer Focus
Competitive Edge Product Strategy Promotional Strategy Pricing Strategy Marketing Objective Planning Approach Time Perspective

New business (attraction)

Lowest delivered cost Generic product Selling/advertising Maximizing profit margins Sales volume Reactive Short term (tactical)

Existing customer base (growth and retention)

Superior quality or service Augmented product Integrated marketing communications (IMC) Profitable use of resources Customer satisfaction Proactive Medium and long term (strategic)

The

Marketing Continuum
Market Driving
Market Driven

Sales
Product Production

Market Orientation
A market orientation provides impetus for building an organizational culture which:
Puts customers first

Creates superior value for customers

Leads to increased overall business performance Employees of marketing oriented companies become value-adders Employees of marketing oriented companies know how to listen to and respond to customers

Market Orientation Constructs and Models

Narver & Slater: Customer Orientation Competitor Orientation Interfunctional Coordination Kohli & Jaworski: Intelligence Generation Intelligence Dissemination Responsiveness

The Market Orientation Process

Market orientation involves learning about

customers and competitors
Firms operating in a competitive industry are most likely to benefit from a market

orientation

Market orientation inputs are valuable for formulating an initial definition of your market and for staying in touch with your customer base

Market Driving Vs. Market

Driven Companies

Market driving companies go beyond accepting given market structures and behaviors Market driving firms shape or change markets/ sectors by eliminating, adding, or modifying the players in markets and their functions Market driving companies rewrite industry rules and compete in new market arenas

Market Driving Vs.

Market Driven Companies contd

Market driving companies have unique business systems and ideas Market driving companies deliver large leap in customer value

Developing a

Customer-Oriented Organization
Customer-centric marketing emphasizes understanding and satisfying needs, wants, and resources of individuals and customers rather than those of mass markets/segments (Sheth, et al., )
Table 2-2 Contrast of New Customerization Framework and Old Marketing Model

Becoming Customer Oriented

A customer oriented business culture:
Top managements values Employee input

Interdepartmental dynamics
Organizational systems Responses to environment Dual customer and competitive emphases Long term view of business/value

Regis McKennas Marketing Philosophy

Marketing is the responsibility of everyone in the organization Customer orientation equals organizational function rather than departmental as in marketing department A customer orientation is a service organization practicing Japanese style marketing Okyaku-sama honored customer or the customer is God

What Customers Require From Companies

Todays customers are quite smart and sophisticated and looking for companies that::
Create maximum value for them based on their needs and wants Demonstrate that they value their customers business

Characteristics of New Value-Seeking Customers

Choice-seeking Demanding Knowledgeable Believe that loyalty must be earned Price conscious Environmentally aware Convenience-oriented

Market Myopia
Organizations must avoid market myopia (forgetting customer needs) by: Overcoming complacency Staying relevant in the marketplace/space Be creative in programs and processes

Market Myopia - cont.

Organizations must avoid market myopia

(forgetting customer needs) by: Adapt and be flexible

responsive/proactive to market conditions and tastes Use a Kaizen philosophy continuous Improvement

The

Bias for Action Continuum

Non-responsive Reactive Responsive Proactive

Anticipatory

(Adapted from Barrett H. (1996)

Marketing Approaches to Achieve Customer Focus

Customer oriented organizations build on the marketing concept (market orientation is the firms implementation of the marketing concept);
Designing customer-driven processes and programs Establish a strong marketing information system Segment and target markets Hire the best talents Stress operational efficiency Continually measure and fine-tune their customer focus

Trigger Points of Customer

Value

Company/customers
(marketing mix)

Employees/customers (service providers)

Technology/customers (e-marketing mix)

Customer-Oriented Marketing
Approaches
Customer Customer

Marketing Mix

Service Providers

E- Marketing Mix

The E-Marketing Mix Taxonomy

Product Price

Place
Promotion Sales Promotion Personalization PRIVACY

Community
Site
Adapted from Kalyanam, K. and McIntyre, S. (2002) The e-marketing mix: a contribution of the e-tailing wars, Journal of the Academy of Marketing Science, 30 (4), pp. 487-499.

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