| In a world economy that is in constant flux and | | | | have to see their customers as individuals rather a |
| undergoing turbulence, more companies are realizing | | | | homogeneous mass of similar tastes, values and |
| that their most precious asset is their customer base. | | | | buying behaviors. Due to such transformation, |
| An even more important realization is the need to | | | | companies need to be more customer-focused in its |
| satisfy the whims and fancies of these customers in | | | | overall marketing strategy. This has resulted in |
| order to survive in these increasingly competitive | | | | organizations adopting a customization strategy to |
| markets. Organizations that do not act on this dictum | | | | increase customer's loyalty to their products and |
| have suffered the loss of market share or worse, | | | | services. For example, in banking and insurance |
| total annihilation. Such dire consequences have | | | | industry, there has been a move towards greater |
| awakened many organizations to rethink the way | | | | customization. Standard products/services have been |
| they see marketing. Thus, there is urgency for an | | | | given way to a varied menu of features from which |
| organization (be it products or service providers) as a | | | | customers may select their own preferred |
| whole to develop appropriate holistic | | | | combination.In view of these changes, companies |
| customer-focused strategies to ensure that the | | | | that understand the asset value of each customer, |
| customer remains at the core of their organizational | | | | and that tailor their marketing efforts (and their |
| thinking.With the rapid advancement of information | | | | costs) to acquire and sustain the highest-value |
| technology (especially the rise of the Web) and the | | | | assets, will win over less-adaptable traditional |
| increasing difficulties of meeting customer's needs | | | | marketing approach of the 4 Ps.The Process of |
| and wants (for example, their expectations of 24 / 7 | | | | Transition:In order to strategically change from a |
| customer service especially for online transactions), | | | | traditional marketing approach to customer targeted |
| there is a shift from a traditional marketing approach | | | | marketing, an organization must be aware of these |
| to customer targeted marketing. Many organizations | | | | following areas:Paradigm Shift. A company must fully |
| and marketing consultants are emphasizing the need | | | | understand that customer targeted marketing |
| to allocate more funds to apply new-found | | | | requires a shift in the organizational mindset, and not |
| knowledge of consumer behavior in new products | | | | just structural organizational changes. They must |
| development, build better customer relationships | | | | realize that their sole purpose is to continuously |
| through customer loyalty and retention programs.This | | | | satisfy customers' needs and wants. Thus, to ensure |
| purpose of this paper is to raise the awareness of | | | | a smooth transition from a traditional marketing |
| the need to concentrate marketing efforts towards | | | | approach to customer targeted approach, an |
| the customer rather than the inward-looking | | | | organization must reflect and ask itself questions as |
| traditional product-focused arrangement. And more | | | | to what areas need to be analyzed and to |
| importantly, the paper will shed light on how an | | | | understand the ramifications of such a transition in |
| organization could go about in making this important | | | | the organization. On the other hand, an organization |
| transition in this current competitive market.Marketing | | | | needs to realize the negative consequences for not |
| Approaches Explained:Before I proceed to discuss the | | | | willing to be a more customer-focused marketing |
| shift in the marketing approach, it will be appropriate | | | | organization.Customer Targeted Planning. As in any |
| to explain briefly the two marketing approaches | | | | organizational change initiative, proper planning is |
| separately for greater clarity.Traditional Marketing-The | | | | needed. The objective of planning customer-centric |
| 4 Ps of Marketing:The marketing mix or what is | | | | marketing strategies is to find win-win opportunities |
| commonly known as the 4 Ps is a framework for | | | | with customer and to identify the best mutual |
| marketers to implement a marketing concept. It | | | | opportunities for your customers and your company. |
| consists of a set of major decision areas that a | | | | This requires the organization to see the issue(s) |
| company needs to manage in order to at least | | | | from the customers' perspectives and to strategically |
| satisfy consumer needs. According to Kotler et al. | | | | plan the organization's resources around them.In |
| (1999), the mix is a set of "controllable tactical | | | | short, the organization's shift to customer-targeted |
| marketing tools [...] that the firm blends to produce | | | | marketing should embrace these three important |
| the response it wants in the target market" (p.8). | | | | points:1.Planning should focus on customer wants and |
| Hence, in an effective marketing program, all of | | | | not looking inwardly at company goals2.Focus on the |
| those elements are "mixed" to successfully achieve | | | | honest feedback and suggestions through creating |
| the company's marketing objectives.The traditional | | | | different channels of communications. Listen to the |
| marketing mix contains four major elements, the "4 | | | | customers, rather than forcing them to listen to |
| Ps of marketing". As defined by Kotler et al. | | | | you.3.Integrate your customers in every aspects of |
| (1999):1.Product: Anything that can be offered to a | | | | your business, from new product design to |
| market for attention, acquisition, use or consumption | | | | after-sales services and more.Organization-wide |
| that might satisfy a want or need. In includes physical | | | | Responsibility. For the approach to be successful, |
| objects, services, persons, places, organizations and | | | | members need to understand the new philosophy of |
| ideas.2.Price: The amount of money charged for a | | | | marketing and embrace it organization-wide. Many |
| product or service, or the sum of the values that | | | | organizations tend to underestimate the degree to |
| consumers exchange for the benefits of having or | | | | which every facet of the enterprise needs to be |
| using the product or service.3.Promotion: Activities | | | | involved in the process and to be integrated into the |
| that communicate the product or service and its | | | | actual customer relationship.Organization Redesign. An |
| merits to target customers with a view to | | | | organization has to assess the roles of all functional |
| persuading them to buy.4.Place: All the company's | | | | departments interacting with customers to ensure |
| activities that make the product or service available | | | | that they add value to customers instead of |
| to target customers.With the rapid changes | | | | increasing the costs. By reorganizing the company |
| surrounding organizations, the traditional marketing | | | | with the customer as the focus, many departmental |
| mix of the 4 Ps has been criticized for being too | | | | roles and responsibilities will have to be redesigned. |
| myopic in this current market situation. The traditional | | | | And when that happens, the employees will have to |
| marketing mix has also been disparaged for being too | | | | adopt new work processes that would be more |
| product-focused and for taking an overly | | | | customer-centric in nature.Human Resource Training. |
| inward-looking strategy with regards to the | | | | There is a need to develop customer-focused human |
| organization's resources and capabilities in production | | | | resource through customer behavior training, across |
| matters. This is antithetical to attending to the more | | | | the functional departments. By investing in such |
| important organizational goal of satisfying the desired | | | | training at all levels, the members will be more |
| needs and wants of customers.In addition, the Web | | | | knowledgeable, more autonomous, and more efficient |
| and E-commerce revolution has played a major role in | | | | in anticipating and meeting the needs of the |
| alleviating customers' ability to shape their | | | | customers.Use of Information Technology. With the |
| relationships with the company. This has led | | | | advancement and increased affordability in |
| customers to expect companies to market their | | | | information technology, more companies are able to |
| products and services in ways that reflect more | | | | collect available data on customer purchase behavior |
| directly their individual needs.These changes have | | | | more efficiently. For example, technologies ranging |
| prompted enterprises that wish to stay ahead of | | | | from checkout scanning to Internet cookies are |
| their competitors to shift their traditional marketing | | | | commonly used to track customers' buying behaviors. |
| approach to customer-targeted marketing.Customer | | | | Companies that employ such technology will be more |
| Targeted Marketing:In customer targeted marketing, | | | | adept at acquiring new customers, retaining existing |
| the customer becomes the central focus of the | | | | customers, and cross selling than those who do |
| organization's strategy and activities, rather than the | | | | not.Enhanced Customers Communications. With the |
| product itself (which is the prime concern in traditional | | | | use of the Internet as a medium for targeted |
| marketing). The organization's paradigm shift in | | | | communication, this allows companies to be in touch |
| marketing requires a company to build a commitment | | | | with customers at less than one-hundredth of the |
| to quality and to listen critically to the customer to | | | | cost of more traditional snail mail, brochures or flyers. |
| determine the market needs and how the company | | | | Communication through emails with the customers is |
| can meet those needs more effectively.One of the | | | | almost free, and the customers can retrieve |
| major characteristics of the approach is to focus on | | | | communications almost immediately. However, this |
| each customer's interests and interactions with the | | | | has also resulted in customers having 24 / 7 service |
| organization to deliver targeted, personal messages. | | | | expectations of these companies.Customer Targeted |
| This would require the company to be constantly | | | | Measurement. An organization must be able to |
| gathering information about their customers in an | | | | measure and evaluate the success of their customer |
| effort to better serve them and, most importantly, | | | | targeted marketing strategy. In most cases, |
| to retain them as loyal customers. As suggested by | | | | traditional measurement techniques such as |
| Peppers and Rogers (1998), the organization would | | | | profitability, market share and profit margins are used |
| need to use various techniques and strategies | | | | to measure the success. There should be an added |
| (possibly with the help of information technology and | | | | emphasis given to developing measures that are |
| the Web), such as focus groups, in-depth interviews, | | | | customer-centric and which are able to assess the |
| customer surveys, attitude testing and so on to | | | | marketing strategy. Customer acquisition costs, |
| obtain information about consumers for more | | | | conversion rates, retention rates, customer sales |
| effective marketing of a product or service. With | | | | rates, loyalty measures and customer share within a |
| these customers' data and feedback, the organization | | | | brand are some examples of customer-centric |
| will apply the knowledge to develop more | | | | measures than a customer-focused organization can |
| customer-centric products and services and/ or to | | | | adoptConclusion:The need for survival has provoked |
| improve existing ones. In addition, the information will | | | | many organizations to shift from traditional to |
| be shared within the organization to encourage | | | | customer targeted marketing. The market conditions |
| employees at all levels to focus on creating | | | | surrounding us will continue to change at an |
| maximized customer value and loyalty.Why | | | | accelerating rate and customer's expectation will |
| Customer-Targeted Marketing?:In order to have a | | | | continue to rise. Hence, without any doubts, more |
| competitive edge and to satisfy increasing levels of | | | | and more companies will adopt a customer-targeted |
| customers' desires, companies realized that they | | | | marketing strategy with increased intensity. |