Marketing and customer
Winning and keeping customers by continually satisfying their needs and wants with the
marketing mix (the 4 P’s):
What customers are charged
Where the product is sold e.g. a store or the Internet
(see distribution and
The product itself that must give customers benefits:
- tangible (quality, looks and reliability) and
- intangible (style, image and customer experience)
See product strategy.
Ways to sell the product
(see advertising and
What's the link between marketing and business
Marketing (or customer satisfaction) is a philosophy for successfully running any organization (called the
This means that everyone in the organization must be totally dedicated to customer
The 8 Golden Rules of Marketing
1. Put your customers first
(but remember you need great employees to deliver great service - see the
2. Know your customers.
(see market research and market segmentation)
3. Make what you can sell
(not sell what you can make).
4. No customers mean no business
5. The customer is always right
(even if they're wrong!)
6. Deliver what customers want now and in the
(better and faster than competitors).
7. Loyal customers are very profitable
(research in America has shown that it costs at least five times more to win a new
customer than keep a loyal one).
8. Exceed customers’ expectations
Delight customers by delivering more than they expect.
How to delight customers (SERVICE):
(providing unique solutions to customers)
(happy employees mean happy customers)
Remember the 4
(price, place, product and promotion).
(inspirational customer driven leaders).
(building long-term relationships with customers).
(finding creative solutions to customers’ problems).
(seeing the world from the customers’ point of view).
Here are these seven points in more detail:
An organization must provide unique solutions to customers’ problems i.e. a unique selling proposition
- product positioning (matching the product to customer requirements).
- product differentiation (making it different and better than competitors).
How can an organization differentiate its product?
a) make sure your 7 S’s are driven by your customers’ wants
- systems (how things are done).
Improvements in technology, design, quality, image and packaging.
Using computers to give as much information to employees as quickly as possible, so that
they can make customer friendly decisions.
d) look after the little things
Small improvements in service can have a big impact on customers.
Be as fast as possible from receipt of order to delivery to the customer, eliminating unnecessary
bureaucracy (e.g. meetings and reports).
f) long-term relationships with suppliers and distributors
(ensuring they give maximum value to customers).
g) right price
Being aware of how sensitive customers are to changes in price.
h) brand loyalty
Using a brand’s good reputation to create customer loyalty.
Happy employees mean happy customers and higher profits (as explained by the service-profit chain).
So employees must be:
a) motivated (extra effort) – through
– interesting work.
– pride in the organization (so business ethics and social responsibilities are important)
– rewards for customer satisfaction.
Having the skills, self-motivation and information to take responsibility for solving customers’
- in teams (ideally multi-functional teams to combine knowledge from different
A survey by Britain’s Institute of Customer Service in 2005 showed that helpful,
friendly staff (and product quality) were vital to customer satisfaction.
3. Remember the 4 P’s
Price, place, product and promotion should be right for the customers you’re aiming at (your target
market) - see above.
4. Visionary leadership
The organization’s chief executive must
- communicate a vision of customer satisfaction to all employees.
- encourage them to work as hard as possible to achieve it
(like the founder of Wal-Mart stores in America, Sam Walton, pictured right).
So the chief executive and every manager should:
- Continually keep in touch with what customers want (e.g. by meeting them) and act
upon their good advice.
- Satisfy the needs of employees and empower them (see point 2).
- Fire people who don’t want to satisfy customers wholeheartedly (or lots more people
will lose their jobs, when customers buy from somebody else).
The best organizations create long-term, intimate (or close) relationships with their customers (called
relationship marketing, or customer relationship management, CRM).
Value your customers because of
- repeat purchases - use loyalty cards to encourage them.
- potential customer lifetime value - for example, $100 a week will become many
- word of mouth advertising - American research shows that customers will tell on
average nine people about their satisfaction or dissatisfaction.
Continual innovation is vital – customers must be constantly given more creative (and
better) solutions to their problems.
See the world from the customers’ point of view.
Use market research to find out who (and where) they are, and why they buy things
research , market
segmentation and buyer behaviour).
But what customers want (e.g. Coke) may not be what they need (e.g. water), and they may be persuaded to
buy things that are bad for them like cigarettes and fast food.
So it is society's responsibility to educate people to make the right choices.
Key quotes explained
“The organization must learn to think of itself not as producing goods or
services but as buying customers, as doing the things that will make people want to do business with
Levitt , American marketing professor (pictured
So another American management writer, Peter Drucker, said
“The aim of marketing is to make selling superfluous”.
The best way to do this is to sell customer solutions, says Levitt, because “People don’t buy things but
buy solutions to problems”.
“You’re selling trust”
Kotler, American marketing professor
Business success depends on creating the best possible long-term relationships with customers, because of repeat
purchases and word of mouth advertising.
Theodore Levitt said that company-customer relationships
should be like a marriage!
“Marketing is the art of creating and satisfying customers at a
Kotler (American marketing
This emphasizes the importance in marketing of the 3 C’s: customers, creativity and cash (making money).
But customers are the most important, because without them the organization would not exist.
So the American economist, Paul Samuelson (pictured
right) , said “The consumer...is the king”.
The founder of Wal-Mart stores in America, Sam
Walton, also commented “There is only one boss: the customer”.
Peter Drucker (pictured right), The Practice of Management (1954)
The purpose of a business should be “to create a customer”. So it has only two functions:
marketing and innovation.
Marketing (or customer satisfaction) isn’t just the responsibility of the marketing department but every
employee must believe in and live by it.
So marketing is “the whole business seen from the customer’s point of view”.
(For more detail see The Practice of
Management in the Business Books section).
Theodore Levitt, The Marketing
The best corporate strategy aims to create and satisfy customers through:
- differentiation (with the creation of a product image).
- excellent long-term customer relationships.
(For more detail see The Marketing
Imagination in the Business Books section).
(pictured right) and C.K. Prahalad
(pictured right below), Competing for the Future
An organization must satisfy unarticulated needs (they can’t express) as well as articulated
It must create new markets and develop revolutionary new products (what Hamel and Prahalad call
(For more detail see Competing for the Future in the
Business Books section).
Michael LeBoeuf (pictured
right) , How To Win Customers and Keep Them For Life (1989)
See customers' point of view and consistently provide them with:
- solutions to their problems.
- satisfaction of their unmet needs.
“A satisfied customer is the best business strategy of them all”, says LeBeouf.
Other tips on customer satisfaction are:
- don't sell but let the product sell itself and believe in it (be credible).
- select, train and reward great people to give great customer service and ask them how
to improve it.
- treat customers like lifetime partners.
Customer loyalty is vital because...
- it costs six times more to attract new customers than keep them.
- only 4% of dissatisfied customers complain, but they will tell eight to ten people.
- small increases in customer loyalty lead to big increases in profit.
Regis McKenna (pictured
right) , Relationship Marketing (1991)
“Marketing is everything and everything is marketing” i.e. customers must rule every organizational activity,
because vital to business success are:
- building relationships with customers.
- responding to their needs (“adaptive marketing”)