Modernizing Marketing Strategies Embracing Customer Sophistication

Piercy (2016)is concerned that the market is changing and customer preferences are not what they were 20 years ago, hence there is a need for change in the manner in which marketing is done. In the context of traditional marketing, there is a revolution of the types of demands that customers are making that require new and innovative approaches to marketing. Under traditional marketing, the two major approaches used are brand marketing and transnational marketing that designed to deal with low customer sophistication as opposed to the modern era of high customer sophistication (Piercy, 2016). Relatedly, brand marketing is concerned with immense emphasis on the brand and image of a business at the expense of price and real value to customers. Brand marketing can improve transactional marketing by identifying the source of the product, provide a symbol of quality convey symbolic values, reduce risks, reduce search costs and make promises. Therefore the management should place emphasis on the four pillars of brand marketing which are: brand awareness, brand loyalty, perceived quality and brand associations. For those facing challenges with these concepts, seeking marketing dissertation help can be a valuable resource in understanding the modern marketing landscape.

However, Piercy believes that despite the merits, market branding is not everything in marketing. Branding has been for a long time been perceived as the ultimate marketing strategy that enhances customer loyalty but it comes with exorbitant fees for advertising agencies that are not commensurate with the result. A common myth is that brands make business unbeatable in the market while in reality a number of big brands have been beaten out of the market. For instance, big companies like Marlboro, Coca-Cola and Levis at one point faced a decline that could not be salvaged solely by the brand name (Piercy, 2016). It follows that there is an illusion that branding is the most powerful tool that a business can have. It is not, and blind branding is hurting businesses just as much as private brands are now encroaching on the market share of the so called big brands. Under the guise of brands lies venomous snakes known as brand liabilities that can bring down or cause huge losses for companies. For car manufacturers like BMW and Toyota, recalls can be damaging to their brand image and in that scenario be treated as a brand liability (Gaustad, Utgård, and Fitzsimons, 2018). For instance, brand liability can better be demonstrated by the latest trade war between China and USA that led to the restriction of US business’ trade with Huawei because of its national origin.

What are the implications for brand owners?

Further, just because a business has established itself as a big and successful brand does not mean that it is fool proof from other challenges to its market share. Counterfeiting and illegal pirating is a major challenge to big brands in the UK and globally; it results in massive losses of revenue when customers are lured to buy generic copies of the brand. In as much as brand strength can be useful against competitors in a globalised market, branding can go wrong and emasculate the business altogether. Dolce & Gabbana had one of the worst branding nightmares in 2018 that caused them massive losses owing to a social media video that appeared to be stereotypical and racist (Chung, Holland and Wang, 2018). This goes to show how branding is overrated and should not be treated as the sole creator of superiority in customer value. The spurious narrative that branding is everything has been challenged by the success of companies that have no consumer brands. An example is Barry Callebaut that has no consumer brand but relies on a business-to-business value chain that enables it to sell to big brands like Unilever, Nestle and Cadbury. Further, there is no such thing as customer loyalty beyond reason. Bob Hoffman believes that there is no such thing as brand loyalty because customers are too busy with far more important issues in their lives to lose sleep over a brand (Heilpern, 2016). It follows that branding should be reconceptualised to provide customer value, not according to the perception of the marketing team but the customers’ terms.

In response to the branding illusion, Piercy proposes a number of measures that marketers should implement to ensure that a business remains sustainably competitive. Because new challenges require new measures, strategic brand management is the best way of dealing with branding problems. In line with Procter & Gamble USA approach, there are five strategic branding techniques including innovation, moving fast against competitors, minimising exposure to Wal-Mart, a new media message and thinking broadly. The above strategies can be used by big brands to remain competitive in the market by continuously innovating and coming with new products that will capture new customers or enhance customer retention. While the traditional media has been labelled by the prophets of doom as being dead, it can still be used to achieve an advantage against competitors. In this context, Proctor and Gamble has implemented promotion and advertising strategies that involves submerging customers an array of brand messages that reminds them of just how good and valuable the brand is. Further, companies should consider using innovation to diversify the brand into other things related to its existing products so as to offer customers a number of options.

On strategic brand management, the brand positioning of Uber and Lyft offer a valuable insight in this area. Uber entered the market as rideshare application with a luxurious touch that later was diversified into Uberx and Uberpool. Lyft joined the rideshare market much later and instead of take the same approach, the company decided that theirs would be a ride where the passenger sat in front with the driver and chatted throughout the journey. Although Lyft joined the same business with same customers, they decided to be different to attract customers who appreciate their brand and culture. Another great example is Toyota and Tesla with the electric car market where one company produced a model that is cost friendly and reliable while the other targeted high end customers. In this scenario, Texas decide to target high end customers who would pay premium rates for their electric cars and they still maintained a reasonable market share. On the other hand, Toyota’s Prius model targets customers who prefer cost effective electric or hybrid cars and their sales have been impressive to say the least. All the above examples show how important and effective strategic brand management is to a business in the highly competitive market.

Clearly, brands exist to serve customers and not customers to serve brands. Therefore, businesses should focus more on customer equity and not the equity of the brand. In the current market, businesses must recognise that they need more than just a brand to survive, they must create value in the brand by becoming closer to their customers. Accordingly, John Deighton suggests that building a strong customer relationship is as important as building a strong brand because the formers facilitates the latter. Therefore, relationship marketing becomes an important remedy to customer problem. However, it is true that there are companies that simply create value through brand associations. Companies like Rolex, Gucci and Louis Vuitton offer luxury products that cannot survive without the strong and protected brands. Other companies cannot solely rely on their brand and must go a notch higher to create customer value amidst new competitors and market changes. As a result relationship management becomes useful in changing the relationship that the company has with its partners and customers from that of conflict and competition to mutual cooperation and interdependence. Although relationship marketing can change the brand of the company for the better by placing the customer at the core of the company, Piercy believes that it is not the ultimate solution to all the problems in marketing.

Critical analysis and evaluation of alternative approaches to creating customer value.

Businesses may adopt relationship marketing as way of meeting its own needs and not that of the customers, an approach that does not create any value or improve the brand of the company. It is therefore imperative that businesses should reconsider the use of Customer Relationship Management technologies especially if restricts management to tactical actions. In essence, the author believes that CRM can be beneficial to a business especially if it is service oriented but it can also harm the business by hurting its brand or even interfering with decision making. Chikweche and Fletcher (2013) suggest that CRM may limit the effectiveness of relationship marketing especially when companies are misled by over-reliance on technology and neglect of brand considerations. However, the tool if used appropriately with proper planning and management can facilitate a firm’s relationships and connections to consumer social networks. Tesco has over 3,400 stores in the UK and supermarkets in North America, Asia and Europe making it one of the largest retailers in the world (Binns, 2019). This big brand has been able to implement relationship marketing through the use of Tesco Clubcard to reward its loyal customers who earn points that can later be redeemed for vouchers that can be traded at Pizza Express or Cineworld. In return, Tesco has been able to enhance customer retention and satisfaction that is responsible for its global success.

Value driven strategy is proposed as an alternative to branding strategies and relationship marketing as a way of facilitating the realisation of shareholder value and customer value. it appears that the normal circle of new products, new services, new advertising and promotion is no longer working hence there is need for a strategy that creates ne value propositions through value innovation. Customer value is a malleable and changes its shape depending on the context hence to deliver superior customer value, a company must achieve operational excellence, customer intimacy and product leadership. Amazon has applied the concept of creating customer value and this can be seen in their two-day shipping, streaming and grocery delivery offer that makes customers feel valued and enjoy their services (Huang, 2018). Another example is Netflix, a company that has learnt the art of knowing what the customer wants by collecting and analysing data on consumers, an approach that allows it to give personalised recommendations. Companies like IKEA, McDonalds and Wal-Mart are examples of companies that are operationally efficient by providing their customers with services that are swift, efficient and dependent.

In the same vein customer intimacy dictates that the company delivers to the consumer what the consumer desires and not the other way round. It requires the company to have a deeper understanding of the client needs so as to sustain the customer intimacy and obsession with the company’s products or services. These types of companies adopt the attitude of letting the customers have it their way and examples include Amazon, Nordstrom and Home Depot (Hoverstadt et al., 2019). In particular, Amazon is currently one of the top companies in brand intimacy and it has been able to achieve this by building strong bonds with customers. The company uses its logistics and supply chain to ensure timely deliveries and offers services that are anticipatory, reliable and delivers value.

In a competitive and global market companies have become more innovative by offering cutting-edge products and new applications for existing products and services. Apple is one such company that has successful used the product leadership approach to create a superior value in their brand. An example is the MacBook Pro computer that meets a customer’s need for a device that is not only user friendly but also aesthetically simple and resilient. Further, Nike has redefined value for customers by crossing boundaries to provide products like the Vapourfly shoe that perfectly fits the needs of athletes looking for running shoes (Childs and Jin, 2018). As the market keeps on changing, companies need to let customers decide which products and services they prefer. Three or four decades ago Coke was one of the bestselling soft drinks for Coca-Cola, but today people are becoming more health conscious thus forcing the company to introduce new brands that reflect the changes in tastes and preferences of their consumers (Alahi and Bass, 2018). For this reason Coca-Cola has now diversified from soft drinks to water and juice market and its products are still loved by customers because of superior value that they have created. IKEA has come a new way of doing business that is customer focused and takes into account the element of value migration, a recipe for its immense success (Sarstedt, Neubert and Barth, 2017). In a nutshell companies must adapt to the changing market conditions by adopting a value-driven strategy that will enhance its competitiveness and sustainability in meeting shareholder and customer needs.

References

• Alahi, A., & Bass, E. (2018). Coca-Cola’s Future Growth Strategy: Diversification?.
• Binns, R. (2019) Big brand CRM case studies. Expert Media
• Chikweche, T., & Fletcher, R. (2013). Customer relationship management at the base of the pyramid: myth or reality?. Journal of Consumer Marketing.
• Childs, M., & Jin, B. (2018). Nike: An Innovation Journey. In Product Innovation in the Global Fashion Industry (pp. 79-111). Palgrave Pivot, New York.
• Chung, S., Holland, O., & Wang, S. (2018). Dolce & Gabbana cancels china show amid ‘racist’ ad controversy. CNN.
• Gaustad, T., Utgård, J., & Fitzsimons, G. J. (2018). When accidents are good for a brand. Journal of Business Research.
• Hoffman, B. (2017). BadMen: How Advertising went from a Minor Annoyance to a Major Menace. Type A Group.
• Hoverstadt, P., Loh, L., Ackoff, R., Allan, N., Beer, L., Bateson, G., ... & Beer, S. (2017). Customer Intimacy and Other Value Disciplines. In Patterns of Strategy (Vol. 1, No. 1, pp. xv-xix). Chicago: Lanchester Press.
• Huang, J. (2018). The customer knows best: The investment value of consumer opinions. Journal of Financial Economics, 128(1), 164-182.