Customer Centered Marketing Strategy Process

After 1950s, with the market supply and demand changing into buyer's market, the marketing strategy centered on the market began to take shape.

The main body of the market is customers. Many scholars have done extensive research on customer purchase behavior. Then, enterprises have been widely recognized by the customer centered marketing strategy, and the marketing objective of enterprises is also turning from market share to profit, and to customer loyalty - obtaining long-term profits.

In the 1990s, the emergence of electronic commerce brought profound changes to the traditional economy. These changes made the behavior of customers increasingly important for enterprises to gain profits. More scholars began to think deeply about the customer marketing strategy of enterprises.

The process of customer marketing strategy should include six elements: (providing) products and services; attracting customers, customer satisfaction, customer loyalty, customer retention, and profit making.

The relationship and relationship between these six elements are shown in the following figure.

Forming a succession of recurring cycle diagrams (of course, after information feedback, enterprises can think about re choosing to enter that cycle).

Each cycle represents a customer marketing strategy for a group of enterprises.

From the provision of products and services, we complete the elements of the marketing strategy process and return to the starting point to form a certain type of cycle.

Different cycles reflect different cycle contents and quality. The best marketing strategy of enterprises is the most complete cycle.

Generally speaking, the starting point of the next cycle should be improved products and services.

The function of elements and the realization of products and services are the starting point and end point of the cycle, and the most basic and fundamental way to enter the cycle. It affects the quality of the cycle to a certain extent.

What enterprises need to do is to rethink how to provide more suitable products and services for the next cycle based on the feedback information after a cycle is completed.

The provision of quality products and services can no longer meet the requirements of the current economic form of e-commerce. Indrajit Sinha (HBR 2000) has demonstrated that Internet technology can cause pparency in costs, thereby greatly reducing the ability of products and services to create profits, because customers have enough information to choose the most suitable enterprises, when all enterprises provide quality products and services.

In order for enterprises to remain competitive, he suggests that products and services should consider innovation, differentiation, linear pricing or bundling.

It attracts customers to play a role in circulation.

As long as the company has enough capital, it can attract customers through various channels.

But how attractive and efficient it is, it is worth considering.

Companies often get into the confusion of John Wanamaker, knowing that half of the publicity fee is wasted, but they do not know which half.

For this reason, Donna L. Hoffman and Thomas P. Novak (HBR 2000) have studied the "attracting" strategy of CDnow in network enterprises, and pointed out that the disadvantages of high cost and little effectiveness of CPM (the pricing of advertising per person per click) is high. Network enterprises should adopt Affiliate Marketing (joint marketing, that is, strengthen cooperation among websites, share customers through each other's links) and Affiliate (unified strategy), which refers to the full range of "attracting" strategies that are reasonably utilized in other channels such as television, newspapers, radio and online advertising, and the proportion of funds invested into these media is carefully studied.

Customer satisfaction is the most significant starting point in the cycle and the starting point of corporate profits.

The opinions of scholars are basically the same for what is customer satisfaction.

Philip Kotler thinks that customer satisfaction is the feeling state of a person's perception of a product (or result) compared with his expectations. After that, Henry also thinks that when the consumption effect of a commodity equals to the consumer's expectation, it leads to customer satisfaction, otherwise it leads to customer dissatisfaction. The American Marketing Association's expression of customer satisfaction is more direct: satisfaction = result - expectation.

Obviously, to achieve customer satisfaction, the effect of customer perception is greater than that of his expectations.

To enhance customer satisfaction, customers can perceive the quality of products and services and reduce their expectations. (enterprises should avoid exaggerating propaganda rather than low-key propaganda. If enterprises expect too low expectations, it is difficult to attract enough buyers).

Customer loyalty is the core of the whole cycle and the key to the realization of corporate profits.

From the diagram we can see the importance of its location.

There are many definitions of customer loyalty, including 3 consecutive purchases of Tucker and 4 successive purchases of Lawrence. Blattberg and Sen take the purchase proportion as a behavioral budget for loyalty, and divide consumer loyalty into brand loyalty and brand loyalty to the manufacturer; Richard L. Oliver's "internal tendency and obligation to continue to purchase products or services that are favored in the future without being affected by the external environment changes and marketing activities that can cause the conversion behavior".

Gremler and Brown (1996) continue to choose suppliers as the sole source of supply, "the degree of customer repeat purchase behavior to specific service providers, the positive attitude towards them, and the increasing demand for such services."

Dick and Basu (1994) believe that only when repeat purchase is accompanied by a higher attitude orientation can customer loyalty be generated.

So many definitions on one hand explain the extensive and deep research of scholars on this issue, on the one hand, explain the importance of customer loyalty.

Reichheld and Sasser research shows that customer loyalty plays a vital role in profit, customer loyalty increases by 5%, and industry average profit increases by 25% to 85%.

Frederick F. Reichheld and Phil Schefter (HBR 2000), through many years of research on Bein companies' examples of network enterprises, think that customer loyalty of e-commerce enterprises is particularly important for enterprises.

Research on customer satisfaction and customer loyalty: customer satisfaction is not equal to customer loyalty, but it is an effective way to achieve customer loyalty. So what is the relationship between the two?

Han Jingguan and Wei Fuxiang (NBR 2001) are built on the basis of the research of the service industry. Through the static analysis of customer satisfaction and customer loyalty, it is concluded that there is no obvious connection between the two, and the dynamic analysis shows that the two are related but not strongly related.

Bai Changhong and Liu Chi (NBR 2002) answered the determinants of customer loyalty in service industry by arranging many scholars' viewpoints. They believed that the direct drivers of customer loyalty included service quality, customer satisfaction and switching costs, while the highest level of customer satisfaction only produced loyalty, and emotional factors could reduce the correlation between satisfaction and loyalty; indirect factors and moderating factors of customer loyalty included technology, social norms and situational factors; and customer value promoted repeat purchase would enhance customer loyalty.

On the basis of the above scholars' research, Wang Yuexing and Feng Shaojin (2002) made a comprehensive and in-depth analysis of the driving factors and their functions of customer loyalty.

They believe that regardless of which industry, customer value and customer satisfaction are all drivers of customer loyalty (at the same time, promote loyalty to customers' emotional and external behaviors). Other factors (switching costs, perceived risks, product service importance, high input, customer characteristics, social norms, situations, etc.) are "semi driving factors", because these factors are only non attitude factors that drive repeat purchase and promote customer retention.

Customer satisfaction is the driving force of customer loyalty.

However, improving customer satisfaction does not necessarily increase customer loyalty, which is the trap of customer satisfaction.

Wu Ying and Bing Shao's family (2002) borrowed the "two factor theory" to analyze them.

They divide customer expectations into basic expectations and potential expectations, which correspond to two kinds of customer satisfaction.

Customer satisfaction caused by basic expectation satisfaction can not make customers loyal, because the basic expectation level is low, customers think they deserve it.

The potential expectation gives customers unexpected value, resulting in pleasant feelings and repeated purchases, resulting in loyalty.

This coincides with the "satisfaction, pleasure, trust" level of customer loyalty put forward by several other scholars.

However, potential expectations will gradually pform into basic expectations and re affect customer loyalty.

Although Wu and Shao hoped to solve the problem by classifying the customers according to their expectations, this management was obviously very reluctant.

Because there is always a "Peter principle" for customers' expectations. (I believe that customers always pursue the potential expectations which they can not reach), and it is quite difficult to divide the customer's actual operation according to the stage of expectation satisfaction.

It is precisely because of the complex relationship between customer satisfaction and customer loyalty (to better reflect the various marketing conditions of real enterprises), so the author's model uses customer value instead of customer value as a prelude to customer loyalty.

In the study of customer loyalty, many scholars have realized that corporate loyalty strategy should not aim at all customers, should subdivide customers, make more valuable customers satisfied, rather than pleasing all customers.

This is the next stage of our cycle customer retention.

Customers retain the intention of choosing the right customers and locking high value customers.

However, Werner Reinartz and V. Kumar (HBR 2002) have conducted four years of research on 16000 customers of the four companies of the US high-tech service companies, the American postal company, the French food retail companies and Germany's direct brokerage firms, pointing out that we should be vigilant against the retention of "loyal customers", because customer loyalty does not necessarily represent profits.

They overthrow the three value that is generally considered to be loyal customers: loyal customers do not have to spend less business, pay high prices for bundled products, and publicize businesses.

They abandon the RMF method to evaluate customers, and use profit and customer life two factors to divide customers into four categories.

See the following table: the company has retained the customers that the enterprises need and realized their value, and the rest is to realize the value of the enterprise.

To realize the value of enterprises, we should avoid killing the goose that lays the golden eggs.

Although the profits left by customers are loyal, short-term profits may not necessarily be created for enterprises. This is the current competitive situation of enterprises, especially e-commerce enterprises.

It is generally believed that e-commerce enterprises need 2~3 years to recover their investment, and the profit period is 8 years, or even longer (12 years).

At present, scholars have not yet reached a conclusion on this point, but the reality of countless e-business enterprises is all the same.

The most successful and famous Amazon online bookstore, after many ups and downs, announced its first profit in 2002, after seven years.

Therefore, the company's gaze should be focused on long-term profits, and avoid being too early to "start" and be betrayed by customers.

To achieve this function, enterprises have enough confidence and information to restart the marketing cycle of customers.

Customer marketing strategy analysis of several types of circular and representative enterprises. The actual customer marketing strategy is mostly a part of the cycle or a branch cycle. It is not necessarily a complete cycle. Next, several important or typical cycles will be analyzed.

For convenience, we express the elements in the loop by means of one to six.

Complete cycle: 1 - - - - - - - - - - the first is the most ideal marketing strategy.

Although the process looks longer, but the stability is high, enterprises can have a good idea of every element, so that they can achieve the marketing intention of enterprises well.

This plays an important role in the long-term and stable development of enterprises.

At present, the actual situation of the marketing strategy of most enterprises is not such a cycle, so its development is unstable.

Advertising circulation: (1) - (2) - - (1) - this cycle reflects the idea of quick success and instant benefit of enterprises. After attempting to attract customers through overwhelming advertisements, they begin to "slaughter" customers.

The result is that enterprises may gain short-term profits, but they are quickly abandoned by customers.

It is difficult for enterprises to get long-term development.

The short path of this cycle fully reflects the instability.

The marketing strategy process of many enterprises in the health care industry in China adopts this kind of circular service cycle: (1) - (-) - (-) - (3) - (4) - (1), such a cycle occurs mostly in non profitable enterprises (such as some public institutions), although it can also achieve customer loyalty, but if there is no necessary profit support, then how to make the cycle permanent and vigorous is a difficult problem, because if there is no updated product appearing in the next cycle, it may eventually lead to the gradual loss of customers, resulting in failure of circulation.

The key to recycling is external financial support.

Monopoly cycle: 1 - - - - - - - the reason why it is called monopoly cycle is that the enterprises represented by such cycles are often monopolized in the market.

They do not