(a) Describe the elements of customer-driven marketing strategy and mix. (15 marks)
(b) Elaborate the forces that can influence the above strategy. (5 marks)
(20 marks, 2015 Q2)
(27.09.2015)
A.
a) Similar question has been asked on customer-driven marketing strategy in:
2013 Q4 - companies move away from mass marketing towards target marketing, firms are focusing on the buyers who have greater interest in the best values they have created. Discuss the steps in designing a customer-driven marketing strategy.
[Here, the question asks about elements of and marketing strategy and mix. However, the key elements are still about segmentation, product positioning for such segment and continuous customer relationship management.
The marketing mix to develop such strategies would be product, promotion - to the target segment, and pricing to target segment and placing the distribution to enable the reach to target segment.]
Elements of a Customer-Driven Marketing Strategy, by Chris Joseph, Demand Media is extracted below:
In a highly competitive business environment, focusing on the needs of your customers can give you an edge over your competition. As such, your marketing strategy should be geared toward reaching those who would benefit the most from your product or service. A customer-driven marketing strategy includes elements like identifying your target market and reacting to their needs. It should also detail ways to retain customers and use them to help you gain additional business.
Targeting Your Market
A customer-driven marketing strategy targets a specific market segment. Use marketing research to identify common demographic characteristics within your customer base, such as age, gender, occupation and income level. The more you know about your customer base, the easier it is to develop a strategy that will appeal to these characteristics. As a result, you waste less time and money trying to reach unlikely prospects.
Meeting Needs
A customer-driven marketing strategy focuses on meeting the needs of your customers and examines how your products or services can meet those needs. For example, your initial research may tell you that your customers are extremely interested in receiving a high level of service. You may be able to meet this need by offering free deliveries or extended hours of operation.
Building Loyalty
Customer-driven marketing helps to build loyalty, which can lead to repeat sales as well as referral business. One method used by marketers is the implementation of a rewards program where customers receive points each time they make a purchase. The accumulation of points leads to free or discounted products or services.
Using Customer Feedback
Use feedback from your customers to make changes or improvements to help you continue to meet customer needs in the future. For example, your customers may indicate that they want a cleaner store, a different product mix or a better customer return policy. Make any necessary changes and use your marketing strategy to get the word out to show that you're focused on serving your customers.
Gaining Referrals
Make generating referrals a part of your customer-driven marketing strategy. Encourage your existing customers to spread the word about your business to gain new customers. Implement a referral program where customers are rewarded for sending new business your way by giving them additional discounts or free merchandise. You could even hold a contest to see which customer can send you the most referrals in a specific amount of time.
[The later parts about building loyalty, using customer feedback and gaining referrals are under Customer Relationship Management (CRM)].
Ref:
Chris Joseph. Elements of a Customer-Driven Marketing Strategy. Demand Media, available at
http://smallbusiness.chron.com/elements-customer-driven-marketing-strategy-3223.html
[X] Own account.
b) Forces that influence the strategy
[Take for example of a strategy for reducing road accident by installing CCTV camera for speed trap. The strategy is using CCTV camera to reduce speed, thus less accident. In the context of this question, the strategy is using Customer-Driven marketing strategy and mix, the end outcome is to market to a segment of customers where their behaviour is largely similar hence, penetration to segment to achieve acceptance.
This segment of customer is actually the environment which the marketer has selected based on earlier market research and analysis. However, this environment may change over time. Therefore, the assumptions that certain action plan could be effective earlier on might be obsolete later. This causes or 'forces' are what is asked by the question.]
The Marketing Environment - The company must carefully analyze its environment so that it can avoid the threats and take advantage of the opportunities. The company’s marketing environment includes forces close to the company that affect its ability to serve consumers.
These forces can be dynamic and further market research may be required to identify them for better adaptation of strategy.
They are:
1. Demographic pattern which changes over time - people gets older hence behaviour might change
2. Technological advancement - the replacement of analogue phone by smartphones
3. Political or policy changes - rules and laws prohibiting certain use of product
4. Entry of competitors - new way of doing things, My-Teksi etc.
(The forces are those that can affect the environment - like the PEST factors)
Ref:
[X] Own account
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