Saturday, 25 January 2014

Is your company not sufficiently market focused and customer driven?



Now a days, understanding the consumer behavior is the most critical part for any kind of business(either its product oriented or services oriented). There are many factors which contribute to the success or the failure of any product. One thing which plays a major role is information, right information at right time can bring you out from any critical conditions. Correct information can help you to improvise your products to better meet the consumer needs. Most of the company constantly adds new and latest technologies to get the competitive advantage in the marketplace. This competition results into lack of focus towards their customer needs which leads to downfalls of the market share.

The marketing guru 'Philip Kotler' in his book(The deadly marketing sins) has explained many such situations which company generally don't consider, and the solutions for such situations which will led to better productivity and profitability.

Generally, companies lose their way when either they are not sufficiently market focused or they are not customer driven. For the entire life cycle of the product, constant monitoring is required. They should always have focus towards their target segment which will form their major market share. Understanding the customer requirements and making the necessary changes accordingly throughout the life cycle should be a constant behavior for any company. Here are some signs faced by companies and their probable solutions. These signs and solutions can vary from industry to industry(or for service industries).

Why a company is not market focused or customer driven?

  1. Poor identification of market segments(when the end consumers are not defined)
  2. Insufficient prioritization of market segments
  3. No market segment managers(generally companies don't concentrate on segment managers which is a very special position in a company to have a better result)
  4. There are no training programs to create a customer culture(basically it is for sales force because they are the face of the company who deals with the end-users)

Possible solutions:

  1. Adopt more advanced techniques in segmentation such as:
    • Benefit segmentation: One of the segmentation strategies based on the specific benefits that different consumers looks into the product.
    • Value segmentation: Another segmentation strategy, which deals with the values placed by the customers on the product.
    • Loyalty segmentation: The strength of relationship with the customers should be understood which helps in decision making.
  2. Prioritize the most important segment which leads to higher market share.
  3. Specialize the sales force(can be done with the help of various training programs or necessary tools that are required during their field work).
  4. Develop a clear hierarchy of company values with customers at the top.
  5. Easy access to the customers through fax, email, suggestions, phone and respond them quickly.

    Nokia - Connecting people
    Nokia-connecting people
    All these strategies sounds very simple but following them will only take the company to the desired results. For example, Nokia was the market leader in smartphone market from year 2000 to 2006, but gradually their market share started falling in the mid of 2007, and to recover their position they announced a partnership with Microsoft. Although they have changed their operating system but still they are unable to cope up with their customer demands. So, as a result, at this point of time they fell from its number one position to the tenth position in the terms of market share. The downfall has been showcased in nokia wikipedia website itself(http://en.wikipedia.org/wiki/Nokia). Here is one more article describing the partnership happen between Nokia and Microsoft (http://www.marketingweek.co.uk/nokia-to-partner-with-microsoft-under-new-structure/3023364.article)

    Microsoft
    Microsoft
    Here is one more example, of one of the leading fast food chain, McDonald's. Although its one of the most favorite food chain among people but still they are unable to place them among top 10 restaurant chains. They have introduced lots of choices in their menu over the years to give a tough competition to Subway, KFC and many more such food chains. You can read more about this news here: http://adage.com/article/news/mcdonald-s-1-rank-millennials/240497/

    McDonald's - I m loving it!
    McDonald's - I m loving it!
    All these example showcased above tells that how even the big shots are unable to position themselves in front of customers. Most of companies face lots of problems in terms of positioning, focus towards their target segment and to be a customer centric. Even they have to put a great effort to maintain their value and positions in market place.