Creating Value to Customers and Firm as Part of Marketing - Essay Example

? THE EXTENT TO WHICH CREATING VALUE TO S AND TO THE FIRM ARE AN INTRINSIC PART OF MARKETING TODAY Lecturer: The Extent To Which Creating Value To Customers And To The Firm Are An Intrinsic Part Of Marketing Today Creating organization and customer value is one of the fundamental objectives of marketing, in the contemporary society. Many companies incorporate customer and organization experience management by in their vision or mission statements. They are committed towards creating customer and company experience through focusing on value, quality and convenience. Therefore, they employ effective strategies such as customer experience management and corporate social responsibility. These models reveal the effective value creation of brand communities, thus contributing to successful business performance. Creating value to customers is an effective means that will enable an organization to achieve a competitive advantage in the global competitive market. Moreover, the strategy of the company of designing superior products is based upon value creation. Therefore, understanding value creation is essential, and marketers should understand it in the new sense of satisfying the needs of customers rather than making sales in marketing practices. Creating value to customers is an intrinsic part of marketing in the contemporary global market because it creates an opportunity for achieving a competitive advantage. Many companies are nowadays creating brand products of high quality; thus, they utilize technologies with the purpose of achieving competitive advantage (Kotler and Keller 2005, p.123). However, the notion behind customer value is one the significant objectives that will enable the company to improve business performance. This is because companies are nowadays implementing varied business strategies of becoming leaders in the market such products differentiation, promotion and pricing strategy but they emphasize on customer value. This is because creating customer value is one way of meeting expectations of customers; thus increasing business performance in the competitive marketing. The research indicates that the firm’s role in the value creation course is viewed as the value co-creator. Firm play varied roles in creating high quality products, but the key roles in creating a successful business performance are value co-creator. The actors can create value and make offers for potential values. In some occasions, both service providers and customers play significant roles in value creation process. This brings the issue of clients being the value co-creator. Gronroos (2011, p.1) points out that the customer is always a co-producer of value as far as creation of customer value is concerned. Understanding value creation and co-creation value are essential because it enables individuals to meet their stated goals successfully. Value creation deals with value-in-use, which is produced by clients. The process that contributes to value-in-use for customers is essential in producing value for clients. The value-in-use covers all the activities performed by the company and customers in business process. Moreover, the both customers and firms play significant roles in value creation process. Customers are the user of the products; thus, they create value for themselves through integrating organization resources with other crucial available resources in a self-services process (Gronroos 2011, p.9). Contrary, the firm play the role of resource provision to customers; thus in the process they create value to customers. The resources integrated and utilized by customers or firms must be created by someone. Self-evident manufacturing is one of the essential roles of firms that they play in the process of value creation of customers. Designing, development, manufacturing and delivering of resources are all the necessary process for creating value in-use (see figure 1 below). This means that they facilitate value creation of customers; thus contributing to successful business performance. This is one of the fundamental roles that the firms play in value creation of customers. Provider Sphere Customer Sphere Design Development Manufacturing Delivery Usage Back office Front office Value creation as an all- Encompassing process Fig.1: Process for Creating Value in-use Customers (Gronroos, 2010) Many successful companies in the contemporary marketing society have one thing in common, and that is value creation; thus building mutual rapport with customers. The success of the company is based on customer satisfaction; hence, companies have now implemented varied models of achieving success in the competitive global market. Many companies are customer focused, and they treat customers as the king in the market. This is essential because it enables firms to maintain old customers and attract a new one in the market. The firms dedicate themselves in understanding the needs or expectations of customers in a well-defined target market (Kotler and Armstrong 2012, p.3). The motive of every competitive firm is to design superior value for the customers; thus contributing the high satisfaction levels of customers. Additionally, marketing involves dealing with customers; thus, marketers need to understand the meaning of customer and organization value creation. These are the twofold significant issues in the market that can only lead organizations to achievement of stated goals successfully. Kotler and Armstrong (2011, p.7) argue that the main twofold issues of marketing are to maintain the old and attract new customers in the market through delivering high service values to satisfy customers. For instance, Wal-Mart is one the largest companies across the globe that made a promise of delivery high value products at low prices in order to satisfy customers across the globe. This mission has enabled the company to achieve effective business performance; hence, the company is being recognized as one the successful, leading business company in the global market (Dess 2012, p. 132). Therefore, many companies have tried to emulate their model of value creation in order to achieve competitive advantage and increase sales in the contemporary, competitive market. Sound marketing are among the critical issues for achieving organization mission; hence, large and small companies strive to achieve success through value creation in the business world. This is essential because organization and customer value contributes to increased market shares and revenues; thus enabling firms to continue operating successfully. Masterson and Pickton (2010, p.26) argue that marketing must be understood in the new sense of satisfying the needs of customers rather than making sales. This is because once organizations understand the meaning of customer satisfaction; therefore, the rest will follow automatically. This means that an organization that creates value toward satisfying the needs of customer have a high chance of increasing revenues than their counterparts. Therefore, it is crucial for the market to understand the needs of customers and develop superior customer value; hence distributing and selling products easily. In order to understand the needs of customers, it is essential to carry out marketing research and incorporate technology effectively in designing unique products in the market; hence, selling and advertisements are among the integral part of the marketing mix employed in the market. Marketing is a social and administrative, production process through which human beings attain needs and want through generating, exchanging services and values with others (Kotler and Armstrong 2011, p.5). Therefore, understanding the needs and wants is essential for marketers. However, the basic, considerable issue underlying the selling principles is the human needs. Human needs are more essential in the daily life of human beings than wants or demands because needs are those things that a customer cannot do without them. The sellers do not formulate the needs because they are the fundamental part of human composition; thus, marketers only need to understand them. This will enable the marketers to design effective services that are of high values; hence satisfying the needs of customers. It is imperative for marketers to carry out marketing research in order to understand the psychological needs of the targeted customers (Schau, Muniz and Arnould, 2009, p. 41). Although many companies view marketing research as a costly exercise, it is beneficial to the marketers because it enables them to determine the needs of customers. This will enable them to implement effective marketing strategies such as product pricing, distribution channels, promotion and effective place to sell products. Moreover, people in the market satisfy their needs or wants by services offered to them in the market. Therefore, the marketers should ensure that they offer high quality and value services to customers in order to satisfy their needs or wants. Kotler and Armstrong (2011, p.6) reveal that the product service is not limited to physical needs but anything that can satisfy the needs of wants of a consumer. Therefore, successful marketer can implement effective marketing strategy of creative value products and services that can meet the satisfaction needs of customers. This is whereby use of technologies in creating innovative or brand products is essential. For instance, many sellers make the severe errors of concentrating in certain products they offer in the marketplace than the benefits they offer to the target market. This reveals the way such marketers are sale oriented rather than being benefit oriented through providing a solution to a need. However, due to increased technology advances and increased education skills on marketing of products, many companies in the contemporary society have started designed products that are of high value in the market. This is essential because it contributes to increased sales; thus increasing the company revenues. Companies are nowadays committed to total quality as an effective marketing strategy for creating organization and customer value. Total quality management has emerged as one of the essential marketing strategies for improving value creation in the working environment. Consumers, across the globe assemble in the market, to purchase for high quality products; thus, many companies are playing the catch-up in order to avoid being left behind. Therefore, many organizations emphasize on total quality management as a means of creating a competitive advantage in the global market. It is vital for quality to be reflected in every product design, in the company (Pongsakornrungsilp and Schroeder (2011, p.312). This is because quality products are of valuable in the market; thus, organizations need to train employees on the significant of maintaining total quality of products. Quality should not only begin with the customers’ needs, but also the firm needs as a way of achieving their objectives. Therefore, it is essential for employees to possess vital skills that will enable them to improve the quality and value of products; thus satisfying the needs of customers. Kotler and Armstrong (2011, p. 27) argue that maintaining customer relationship is one way of keeping customers satisfied. Many companies have nowadays realized that losing customers means losing sales in the entire purchasing stream. Therefore, companies attempt to maintain strong relationships with customers through offering them value products that meet their demanding needs. For instance, a company may lose money on transaction made but still continue to benefit significantly from long-term relationship with customers. Although, new attraction of customers remains the key management tasks in the contemporary society, companies focus on retaining old customers. The key to successful customer retention or creation of a long-term relationship with customers in an organization is the superior customer value and satisfaction of customer needs. Therefore, companies are nowadays employing marketing management philosophies in order to create superior customer value and increase the satisfaction levels of customers. Marketing management philosophies are the key, critical tasks of creating effective customer and organization value; thus improving business performance. There are numerous ways through which organizations conduct their marketing activities. These include production, promotion, distribution and pricing concepts, which are combined as the marketing mix (Brassington and Pettitt 2003, p. 123). Another way conducting marketing activities is through determining the needs, want or demands of the target market. This is referred as the societal marketing, which is marketing concept that aims to maintain and improve the social welfare of the community. The societal marketing is one of the marketing management philosophies that aim to improve the wellbeing of the society. This is through focusing on consumer value creation and satisfaction of their needs. This concept requires the firm to serve customers and satisfy the needs of consumers as well as the society in the long run. The three considerations underlying the societal marketing is the company to increase profits, improve consumer satisfaction and promote the welfare of the society; thus the three are interconnected as indicated in figure 2 below. Taking into considerations the society is essential in an attempt of satisfying consumer needs or wants. In most cases, the highly successful companies such as fast food industries may harm consumers in an attempting of improving customer value; thus causing environmental problems in the society. Therefore, marketers should balance the three concepts of society, company and consumer when setting their marketing strategies or objectives. This will enable the company to be responsible for their activities; thus benefiting or meeting the interests of the company, society and consumers Society (Human welfare) Consumers Company (Want satisfaction) (Profits) Fig. 2: The Three Considerations Underlying the Societal Marketing (Armstrong, Kotler and Armstrong, 2011) However, in the attempt of creating value to customers and the firm, many organizations have been impacted heavily especially with social internet sites and use of Internet in electronic marketing. Companies incorporate technology in order to create or design high quality innovative products of high value, but technology has profoundly impacted the importance of value (Young and Burgess, 2010). This is because of inadequate technical knowhow and poor security and policies regarding on the use of technology in e-marketing. Although technology is vital in the creation of value, poor technological incorporation attributed by inadequate skills and poor policies concerning on the customer or company security or safety when using e-marketing have a negative impact on customer or organization value. For instance, the use of social networking sites such as Facebook, Twitter, MySpace and many others have a significant impact on the organization or customer value in case they are not taken into considerations seriously. Therefore, marketers should understand the use of effective technology in the marketing of products; thus improving customer and organization value in the contemporary business world. In conclusion, understanding value creation is essential, and marketers should understand it in the new sense of satisfying the needs of customers rather than making sales in marketing practices. Therefore, companies nowadays strive to maintain and attract new customers through creating customer value. The employ varied marketing strategies, which include marketing promotion, product differentiation and pricing strategies in achieving effective business performance. They empathize on the significant of marketing management philosophies that will enable them to maintain and improve customer of organization values. Lastly, marketers incorporate technologies in the business process such use of Internet and social networking sites in order to achieve competitive advantage. However, poor incorporation associate with inadequate technical skills impact significantly customer and organization value in the marketing practices. Bibliography Armstrong, G., Kotler, P., & Armstrong, G. (2011). Marketing: An introduction. Boston: Prentice Hall Brassington, F., & Pettitt, S. (2003). Principles of marketing. Harlow, England: FT/Prentice Hall. Dess, G. G. (2012). Strategic management: Text and cases. New York: McGraw-Hill/Irwin. Gronroos, C. (November 01, 2010). Value co-creation in service logic: A critical analysis. Marketing Theory, 11, 2, 1-43. Kotler, P., & Armstrong, G. (2012). Principles of marketing. Boston: Pearson Prentice Hall. Kotler, P., & Keller, K. L. (2005). Marketing management. Upper Saddle River, N.J: Pearson/Prentice Hall. Masterson, R., & Pickton, D. (2010). Marketing: An introduction. London: SAGE. Pongsakornrungsilp, S., & Schroeder, J. (January 01, 2011). Understanding value co-creation in a co-consuming brand community. Marketing Theory, 11, 3, 303-324. Schau, H. J., Muniz, J. A. M., & Arnould, E. J. (September 01, 2009). How brand community practices create value. Journal of Marketing, 73, 5, 30-51. Young, L., & Burgess, B. (2010). Marketing technology as a service: Proven techniques that create value. Hoboken, N.J: Wiley. Read More