The given marketing strategy report will primarily focus on customers and how every member of the personnel needs to be aware of this. One should understand that inner organisational intricacies are irrelevant if they do not bring the required degree of customer satisfaction. The business should focus on both marketing and production processes on satisfying consumer needs. The consumer type is comprised of individuals, which means that they are guided by a vastly different range of principles compared to organisational customers.
Every organisation possesses a service aspect of the offering, regardless if the item being sold is a product. The main reason is the presence of interaction between two separate entities that seek to conduct an exchange of value manifestations. Thus, in order to properly assess customer satisfaction, the ServQual model will be used.
Production and Marketing
Marketing and production possess key distinctions, but they are highly interconnected with the objective of serving the customers’ needs. The main subject of marketing study is the needs of members of society, which are based on need. The term need refers to the feeling of lack of something or someone. If this need appears in a certain group of people, then a so-called need arises, which generates the demand of society for this or that product. Need, in turn, creates an offer to the community to satisfy this need by purchasing the corresponding item.
Marketing permeates the entire life and daily activities of a person, covering various stages and periods of time. Marketing experts might utilize the hierarchy of USERS needs by determining which type is satisfied by the product or service. Therefore, a product might adhere to a basic need, such as food and water, or it might be targeted at high-end needs, such as self-actualization. Choosing correct set of marketing strategy is primarily reliant on the product or service’s specific goal regarding the customers. The marketing orientation is built from customer needs to potential market opportunities, which are followed up by marketing products and services, and customers themselves. In other words, marketing makes a great deal of effort to identify customer demands and fulfil them by delivering the promise to the buyers.
In contrast, the production focuses on the manufacturing process of operations management. It primarily addresses the subjects of efficiency and effectiveness of the production. In addition, it can employ a wide range of techniques, such as lean manufacturing or mass manufacturing. The former is an approach that minimizes the overall waste during the manufacturing process, which means that efficiency is maximized (Sanders, Elangeswaran, and Wulfsberg, 2016). However, mass production is a “one size fit all” approach, where all products are standardized, and the attention is paid towards volume (Chen et al., 2015). Therefore, in traditional production, there is little to no awareness of customers’ needs, and the interest reflect the company itself. Therefore, production is more focused on efficiency and marketing on customers’ needs. Production orientation is based on production capabilities of an organization. The next stage involves manufacturing the product itself and making aggressive sales effort, which followed up by delivering the promise to customers.
However, there is always a core and supplementary aspect for every product and service. Production process can be managed and adjusted in way that changes these aspects in order to make the good distinctive. However, changing the core of the product or service can substantially alter the latter and even put it in a different category of goods. In addition, marketing coordinates a wide range of influencing factors from both microenvironment and macroenvironment. The former includes suppliers, customers, distributors, and competitors, whereas the latter involves economic, legal, technological, social, and physical elements. In other words, the marketing department needs to navigate through these forces, whereas production processes mainly do not consider them.
Nevertheless, the main similarity is manifested in their common objective of customer satisfaction. Although the production process is not as aware of customer needs as marketing, they both strive to increase customer satisfaction. The concretization of human activity and the essence of marketing is well reflected in the following definition. Marketing is the activity of ensuring the availability of the right goods and services for the needs of the audience in the right place, at the right time, at the right price in the absence of the necessary communication, and measures to promote sales (Hollensen, 2019). Therefore, in both marketing and production orientation, the end goal is deliver the promised product or service to customers.
Marketing is a new concept of managing a manufacturing enterprise, the basis of which is to obtain the maximum possible profit, not due to maximum production of goods, but due to maximum customer satisfaction. In other words, it is the work of an enterprise aimed at meeting the needs and requirements of people. In modern practice, understanding the essence of marketing activities in the production area is identified with the marketing activities of a commodity producer. This understanding of marketing is not only far from its real purpose but also contradicts its essence. The sales activity of any commodity producer reflects only the final part of his production and economic activity. In conditions of tight market competition, enterprises are forced to change their approach to sales, orienting production towards meeting customer demands. At the same time, a contradiction arises between the needs of customers and the possibilities of the optimal organisation of the production process.
Customer Behaviour and Decision-Making
Being able to distinguish between customer types is crucial in conducting proper marketing operations. There are mainly two types of customers, which are organisations and individuals (Mencarelli and Rivière, 2015). The behaviour in both cases is different, where organisations are more analytical and rational than individuals due to the former being a group of specialists. However, the report will primarily focus on individual customers who exhibit a specific set of behaviours and guided by a different factor that influences their decision making. The specificity of the consumer goods market lies in the fact that these markets are divided into numerous segments with certain categories of buyers with their own requirements, tastes, demands, traditions, cultural characteristics, and the boundaries of effective application. In practical marketing, consumers are divided into two groups, such as end-users and consumer organisations.
It is the customer, deciding what and where to buy, determines what products to produce and what business will be successful. The freedom of choice of goods by the buyer is now especially enhanced by his mobility and better awareness through advertising, the media, and the Internet. The decision-making process involves need recognition and information search. After the latter steps are completed, the potential buyer evaluates the alternatives and makes a purchase decision. However, the last step is critical and it involves post-purchase evaluation. The type of buying behaviour determines the individual customer’s purchasing decision.
There are price-related and urgency-related factors that affect the customer’s behaviour process. Buying decisions for toothpaste and a new machine are different. A large and expensive purchase will require a lot of thought from the buyer and more participants in the decision-making process.
In complex buying behaviour, the case of a high degree of individual customer involvement in the buying process and when they realize that there are significant differences in brands. This usually refers to rare purchases of expensive goods. Most often, the buyer does not have sufficient information about the product category and needs additional information. For example, a person buying a computer may not know what these specifications mean. Such details do not mean anything to the buyer until he understands them himself.
Manufacturers of goods whose purchase requires a high degree of consumer involvement should be aware of how seriously they will collect information about the intended purchase and evaluate it (Viksne et al., 2016). Marketers need to develop strategies to help consumers understand the relative importance of product characteristics and to educate shoppers about the difference between one brand and another using print media.
Sometimes the buying process takes place with a high degree of customer involvement, which does not always notice small differences between similar products from different manufacturers. A high degree of involvement is based on the fact that the purchase itself is risky, and the cost of the product is high. In this case, the buyer will try to bypass all the options in order to compare the offered goods, but he or she will make a purchase quickly enough, based mainly on the level of price and service in the store. For example, buying an expensive product implies a high degree of consumer involvement, since it is a costly purchase and also reflects the taste of the buyer.
On the other hand, most of these products are from different manufacturers, but approximately the same price may seem to the consumer highly similar to each other. After the purchase, the individual customer may experience a feeling of some dissonance, noticing any shortcomings in them or hearing favourable feedback from colleagues about other options. However, he or she will carefully listen to the information confirming the correctness of his choice. In this example, the individual customer first makes a purchase, then a new belief is formed, and then an attitude. Therefore, marketing policy should be aimed at providing the consumer with information that would help him to remain satisfied with the purchase.
Intangible Aspect and Delivering the Promise
All organisations, regardless of their product and service type, have some intangible aspects to their offering, which is manifested in their approach of interacting with their customers. This can be exhibited in the way the business delivers its promise to the buyers. One of the key characteristics of such an aspect is a customer-oriented approach in all steps of business processes. The lack of the given feature poses a major challenge in delivering the organisation’s promise to customers (Terho et al., 2015). In the case of individual customers, the customer-oriented approach is even more relevant due to their dissimilarity in comparison with the organisations.
The main condition for successful business development is its increased attention to customer needs and the development of a number of relationship management technologies. It is not enough for organisations today to simply provide good quality products and services. It is important to focus efforts on establishing and maintaining long-term relationships with both external and internal clients so that they have a stake in improving performance. The growing importance of the issues of forming and maintaining effective relationships with clients was the result of a series of technological, economic, and methodological changes in the external environment of organisations.
Technological prerequisites are due to two processes that have become relevant in this period, such as the globalization of markets and the information revolution. Thus, the development of mobile technologies and the Internet have provided companies with cheaper communication channels due to accessibility and more efficient communication channels with customers due to personalization. At the same time, the clients themselves have the opportunity to get access to almost any information at a convenient time for them. The economic prerequisites are associated with falling margins per customer and the growing importance of customer loyalty. Aggravated competition has led to lower prices and higher costs of attracting customers.
The main opportunity for maintaining business profitability for many companies has become an increase in the intensity of product consumption by each client, which has led to the need to maintain long-term relationships. However, many companies are developing customer loyalty programs.
The methodological prerequisites are the gradual specialization of marketing functions and the reorientation of the business process. Thus, the change in business orientation has been accompanied by the evolution of marketing from mass, product-oriented, through targeted, focused on a specific group of customers, to one-on-one, or relationship marketing. The desire of companies to create a positive image, retain and increase the client base in the face of tough competition forces them to focus their attention on customer relationships. Companies become successful when they focus on establishing and developing relationships with customers, meeting their interests and needs.
The marketing-oriented approach is matched by the concept of maximized marketing, aimed at increasing the maximum sales turnover and profits by selectively allocating and involving well-defined potential customers in the process. The customer-centric approach is reflected in the concept of relationship marketing based on the number of elements. It is also a key aspect of the quality standards regarding the service or product deliverance (What are quality standards, 2012). Marketing management should aim to create and expand strong, mutually beneficial relationships with consumers or other stakeholders. Evidently, the company’s staff plays a special role in the interaction with customers, because it is the staff that creates and maintains relationships with customers.
When working with personnel in building a customer-oriented organisation, it is important to note that employees play a key role in customer relationships. This concept is often equated with a customer-oriented approach and a customer-oriented organisation. Accordingly, a customer-oriented organisation can be called an organisation that implements a customer-oriented approach in its activities. Moreover, in order for an organisation to be confidently attributed to this type, customer focus should be manifested not only at individual local levels. It should permeate the entire organisational system, becoming the basic principle of its functioning and development, the main value dominant of the corporate culture.
The Role of the Staff and ServQual Model
ServQual is a five-dimensional evaluation instrument used to assess customer perceptions and expectations regarding the business. The given methodological framework is comprised of five main elements (Lee et al., 2016). They can be seen in Table 1, and they are reliability, assurance, tangibles, empathy, and responsiveness. The role of staff is paramount in improving the service quality and delivering the offering to the buyers. Employees can be considered as the initial point of interaction between consumers and the organisation.
The introduction and application of service quality assessment methods, such as ServQual, allows businesses to identify real customer preferences. This is important in order to increase the value of the services provided, as well as to positively influence the business reputation of the energy sales company. If material assets are the main assets for production, in the maintenance and development of which they invest, then the main asset of the business is consumers and their employees. That is why the main principle in the work of guaranteeing suppliers is customer focus, and most of their investments have always been aimed at improving the level of customer service.
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Customers need to have confidence that their selected organisation will deliver it promise despite the uncertainty of the outside world. In the case of both products and services, personnel are the communicator and deliverer of the item, which is why there needs to be a strong work ethic and reliability among employees. Customers should be able to depend upon that the service or product will be delivered as promised in a highly accurate and high-quality manner despite the outside influences (Vareias, Repoussis, and Tarantilis, 2017). The staff is also a major element in conveying confidence and trust to customers because they are the ones who directly interact with the buyers. Therefore, they need to express courtesy and be knowledgeable about the relevant matters. Constant contact with consumers, collection, and assessment of their preferences and wishes is the key to maintaining long-term cooperation. Accordingly, customer satisfaction contributes to an increase in profits and cash turnover. This will have a positive effect on the competitive position in the market, strengthen the state of the business, and create favourable conditions for development.
In assessing the various components of the quality of services in a particular area, the problem of forming a comprehensive, general methodology for analysing the quality of services and services has not yet been resolved. Such an analysis is fraught with difficulties since the specific characteristics of the services do not make it possible to create quality standards. It is important to note that there a set of quality standards that can be applied to employees in order stimulate them to adhere to a number of dimensions of the model (The importance of standards and quality control, 2016). The latter allows one to control the process of providing services before they are sold to customers. The quality of the service cannot meet constant standards since the consumer has a direct influence on the service process. The quality management system ensures the fulfilment of the goals and strategies of the organisation through the formation of control actions and development programs. An estimation subsystem is used to select control actions at the planning stage, as well as to monitor control results.
The overall role of staff is paramount because they are a key element of the tangibles aspect of the organisation. Alongside equipment and physical facilities, they represent the business and act as a basis for initial perception from the customers’ point of view. Therefore, the general appearance of both staff and other outside elements needs to adjust in order to improve the buyer’s perception. In the case of individual customers, personal attention and caring are essential in bettering the empathy aspect of the ServQual model. The staff needs to allocate time and resources to understand the customer’s individual situation and adjust the service to his or her needs. In addition, it is critical for the employees of the business to be responsive because they are the ones who provide follow-up checks. Customer feedback is a critical aspect of the consumer behaviour process, which can be seen in Diagram 1 in the Appendix. Errors in product or service delivery processes are inevitable, which means that there is no place for negligence among the personnel members. Customers are eager to dismiss such a mistake if a company is willing to compensate for the falsehood with properly actionable steps.
In conclusion, the business and its personnel need to be solely focused on delivering the customers the promised offering. Production is a vital element of the operations, but it needs to serve consumer needs. In addition, as in every organisation, the service aspects must be adjusted. In order to properly track customer satisfaction, the ServQual model should be implemented due to its dimensions being major indicators of progress. The main reason is its plausibility in improving the factors of service quality through assessment of key elements.
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