I have learned more than I ever could have thought I would this year. What I have noticed is that this is the first semester in my college career where I have been able to take classes and actually relate the material that I have learned in the past into every single one of my classes. This class in particular for me has been an extremely enjoyable learning experience. Mainly this is because of the group project that we worked on. The first thing I want to focus on that I’ve learned much better now is the research subject in general. Along with research, more specifically for this class, I learned the importance of gaining customer insights to then create products or services that will be successful in the market. In the beginning of the project, my whole group was worried about how we were actually going to get research for this project and then how we would develop key findings from this material. We decided to try our hands at a small focus group, which turned out to be an amazing experience. I can now see how easy it is to make assumptions about target markets and how wrong you can be about those assumptions. In my group, we assumed that high school girls loved pink; one of the biggest findings we got from the focus group was that they were over the color pink and on to bigger and better colors such as blues, grays, and greens. They described those colors as more natural. Also, in regards to research, I learned first hand how once you gather initial research, it is extremely important to then go back and delve deeper into that target segment to learn more. This was easy for our group to see because we certainly didn’t have enough findings from the focus group to understand what it was these teenage girls wanted. What we then realized we needed to do was to create a survey and ask them to create a photo journal for us to get a better picture of their rooms. From this data, we then had a clearer picture in our heads as to what would satisfy our target segment’s wants and needs.
Prototyping is another skill that I feel I have a much better understanding of now than before this class. In fact, I have never made a prototype for another class especially not one to the extent we did for this project. Our group tried to make our “Wave” product look as realistic as possible for the class to get the best idea of what we envisioned for it. I think the most interesting speaker we had come to our class was Michael Luchs. He taught us so much in such a short amount of time about how to make a product or service into something useful and unique. It was from this lecture that our group decided on our product which then led us to creating the prototype. As mentioned before, this was my first experience with creating a prototype, and now I see the importance of creating one especially when you are trying to get other people to see the product exactly how you and your group have imagined it.
This group project for me has been a roller coaster ride of emotions! Our group has a really great dynamic and we have truly worked great together ever since the beginning. The problem came when we had to start our research, and we couldn’t ever find a time when the whole group could get together to discuss research options. This is when frustration set in and I would say even some bad feelings came out. The good news was that we finally found a good schedule to get together and work that fit with everyone’s schedule. Then from then on out, the rest of the project went beyond smooth sailing. In fact, I’ve never worked with a group that worked together as well as we did. We were all very considerate of each others opinions and everyone pulled their fair share of the work to get our presentation ready. We even had enough fun to create a humorous skit that we hope the class enjoyed! I really think this project was helpful in learning the material in this class. Personally I learn best from experience and by putting us through this whole process, we have learned every step of the way how to create a product or a service. Also, I think Professor Walls has been an incredible teacher. This class has always been interesting to go to and all the outside resources we have used, have made learning the material that much more relevant to the real world. I was interested in Malcom Galdwell that I actually went out and bought the book The Tipping Point, which hopefully I can read over Christmas. Professor Walls has always been very open to the students, which has always made me feel comfortable in class. I have also always enjoyed chatting in office hours and getting to know him a little bit better outside of just class material. Overall, this has been a great experience for me and one that I will always look back to when I think of my favorite classes at UT.
Wednesday, December 5, 2007
Wednesday, November 21, 2007
The Power of Wal-Mart
The Power of Wal-Mart (Sorry about the formatting problem. Don't know how to fix it.)
I. Introduction
A. Background and History
1. World’s largest retailer
2. Founded by Sam Walton in 1962 and incorporated in 1969
3. Statistics
4. Culture stayed the same since founding – but their size no longer fits the culture that started with Sam Walton.
5. Company Values
II. Scale of Wal-Mart
A. The Wal-Mart Effect – written by Charles Fishman
1. Always low prices
2. Same quality as more expensive retailers
B. Supplier Relationships
1. Call their suppliers “partners”
C. Bad Reputation and Criticism
1. Lawsuits regarding female discrimination and forcing employees to work off the clock
2. Bad health care plans for employees
III. Reinvention
A. Corporate Social Responsibility
1. New advertising theme “Save Money, Live Better”
a. Getting back to the roots of doing what is best for customers
b. Hired BluSkye to help measure Wal-Mart’s environmental impact of growing and producing all products
2. Going Green
a. CEO Lee Scott wants to turn Wal-Mart into the greenest company
b. Reduce energy used in stores
c. Increase efficiency of trucks
3. Using influence to push suppliers to go green too
a. Only purchasing detergent that is concentrated and in smaller bottles
b. Urging suppliers to use less waste and packing materials Eg. Getting rid of the box packaging for deodorants
IV. Conclusion
I. Introduction
A. Background and History
1. World’s largest retailer
2. Founded by Sam Walton in 1962 and incorporated in 1969
3. Statistics
4. Culture stayed the same since founding – but their size no longer fits the culture that started with Sam Walton.
5. Company Values
II. Scale of Wal-Mart
A. The Wal-Mart Effect – written by Charles Fishman
1. Always low prices
2. Same quality as more expensive retailers
B. Supplier Relationships
1. Call their suppliers “partners”
C. Bad Reputation and Criticism
1. Lawsuits regarding female discrimination and forcing employees to work off the clock
2. Bad health care plans for employees
III. Reinvention
A. Corporate Social Responsibility
1. New advertising theme “Save Money, Live Better”
a. Getting back to the roots of doing what is best for customers
b. Hired BluSkye to help measure Wal-Mart’s environmental impact of growing and producing all products
2. Going Green
a. CEO Lee Scott wants to turn Wal-Mart into the greenest company
b. Reduce energy used in stores
c. Increase efficiency of trucks
3. Using influence to push suppliers to go green too
a. Only purchasing detergent that is concentrated and in smaller bottles
b. Urging suppliers to use less waste and packing materials Eg. Getting rid of the box packaging for deodorants
IV. Conclusion
Tuesday, November 13, 2007
Whats on Your Mind?
Do you ever wonder what it is about something you’ve bought that made you want to buy it? When people are making purchase decisions, they try to think rationally about the product’s attributes to make the best decision, but how do we know that they haven’t already made up their mind about what they want? The film The Persuaders, gives light into this phenomenon of how people decide what they want or why they do what they do.
This film introduces Dr. Clotaire Rapaille who has discovered a method that can reveal people’s unconscious desires and impulses. His method has grabbed the attention of many Fortune 500 companies as they believe that this can give them a competitive advantage by figuring out how to keep their customers happy. His research started when he was working with Autistic children. He had to figure out a way to decode their behavior without the use of words since they can’t communicate verbally. In this time, he learned that messages are engrained in people’s minds from the first time they have the experience related to that certain idea or thing. This is not something they remember though; this explains why people buy certain things without knowing exactly the reason that they want it. Dr. Rapaille discovered that people create mental connections for every word that leads to his method of uncovering this unconscious code. First of all in his method, he leads focus groups that try to get past reason and emotion down to the core of the human being. To get to the actual code, Dr. Rapaille has people lay down in the dark and write out anything that cross their mind which leads them to their primal urges when considering the specific word he is trying to break down. The results from this method give off the hidden reasoning behind why people think the way they do about certain ideas or words. One example that is given in the video, is that the code for SUV’s is domination, so this led to Hummer beefing up their models and tinting the windows. I also found one comment Dr. Rapaille made to be very interesting. He said that he “didn’t believe what people [said]; [he] wanted to understand what they do.” This is a very enlightening statement because I think in reality it is very true. People say one thing, but the most important thing to consider is what they do and the reasoning behind that action. The point is that people have actually no idea of why they do what they do. What Dr. Rapaille does is trying to uncover the hidden desires of people for marketers to understand what it is that their customers ultimately want whether they know what it is they want themselves.
As a marketer, this is a huge development when trying to develop products and services to satisfy our customers. My personal opinion is that Dr. Rapaille has figured out a great way to learn what is in customers’ minds that they don’t even know is there. It’s really quite incredible because by finding out what is in the customer’s subconscious, a company can really cater to what their customers want in their product or service. The best part of this method is that the customers are happy and they still don’t know that you tapped into their unconscious to give them the best product or service for them. They go on being satisfied and rationalizing to themselves why they need to purchase what they do; it’s a win-win situation for everyone!
This film introduces Dr. Clotaire Rapaille who has discovered a method that can reveal people’s unconscious desires and impulses. His method has grabbed the attention of many Fortune 500 companies as they believe that this can give them a competitive advantage by figuring out how to keep their customers happy. His research started when he was working with Autistic children. He had to figure out a way to decode their behavior without the use of words since they can’t communicate verbally. In this time, he learned that messages are engrained in people’s minds from the first time they have the experience related to that certain idea or thing. This is not something they remember though; this explains why people buy certain things without knowing exactly the reason that they want it. Dr. Rapaille discovered that people create mental connections for every word that leads to his method of uncovering this unconscious code. First of all in his method, he leads focus groups that try to get past reason and emotion down to the core of the human being. To get to the actual code, Dr. Rapaille has people lay down in the dark and write out anything that cross their mind which leads them to their primal urges when considering the specific word he is trying to break down. The results from this method give off the hidden reasoning behind why people think the way they do about certain ideas or words. One example that is given in the video, is that the code for SUV’s is domination, so this led to Hummer beefing up their models and tinting the windows. I also found one comment Dr. Rapaille made to be very interesting. He said that he “didn’t believe what people [said]; [he] wanted to understand what they do.” This is a very enlightening statement because I think in reality it is very true. People say one thing, but the most important thing to consider is what they do and the reasoning behind that action. The point is that people have actually no idea of why they do what they do. What Dr. Rapaille does is trying to uncover the hidden desires of people for marketers to understand what it is that their customers ultimately want whether they know what it is they want themselves.
As a marketer, this is a huge development when trying to develop products and services to satisfy our customers. My personal opinion is that Dr. Rapaille has figured out a great way to learn what is in customers’ minds that they don’t even know is there. It’s really quite incredible because by finding out what is in the customer’s subconscious, a company can really cater to what their customers want in their product or service. The best part of this method is that the customers are happy and they still don’t know that you tapped into their unconscious to give them the best product or service for them. They go on being satisfied and rationalizing to themselves why they need to purchase what they do; it’s a win-win situation for everyone!
Tuesday, November 6, 2007
Skeptic Society or Gullible Society?
According to Michael Shermer, “science is a verb that means looking for natural explanations for all phenomenon.” In this respect, when people are considering two different options, they have to decide, “What is the more likely explanation?” As an example, he shows a picture of a crop circle with the word Skeptic written in it. He then asks what is more likely: that this is a natural phenomenon or a Skeptic reader created that picture with photoshop? I couldn’t help but laugh during this Podcast because Shermer really does a good job of bringing to light how gullible society can be. People believe only what they want to believe regardless of thinking about what can happen in reality. It got me thinking. Why do people believe such strange things?
We may never know the answer to that question, but what we do know is that as marketers, we can use this characteristic of humans to our advantage. If people are willing to believe in something such as the image of the Virgin Mary on a cheese sandwich, then they surely have the ability to believe in your product without having experience with it first hand. My personal opinion is that people do believe what they want to believe. For example, I am completely guilty of falling into the traps of infomercials on television. I always want the next hot new product or the next fitness product that is going to give me my “ideal body.” Even though, I know better, I still fall into these traps because I want to believe that buying these products will work for me. My parents always have to remind me that those infomercials are all about stretching the truth. The good news for the marketing industry is that there are many people in the market who are just like me: willing to be your product with full faith that it will meet their every expectation.
Shermer also talked about how people tend to only remember what goes right versus the failures when they are exploring something new. I can definitely see how this is human nature. It very much goes along with a customer and the idea of cognitive dissonance. Say you just bought a new car. Soon after your purchase you continue to take notice of other cars on the street and pay closer attention to car commercials when watching tv. This is because you are still trying to reassure yourself that you made the best decision. When people only take into account the “hits” versus the “misses,” they are in fact reassuring themselves that the product or service they bought is the best choice they could’ve made. Again as marketers, by knowing this information, we can use it to our advantage. Realizing that we just need to reassure our customers after their purchases can be used to our advantage. This can help get repeat business as well as maybe get happy customers to make referrals to other people about our products.
Overall, I found this podcast to be very insightful. It is truly amazing what our eyes can trick our minds into believing. I think it is hard for people to see something incredible and not realize that it is most likely due to chance versus scientific reason. From now on, I will be much more careful about what I choose to believe without having hard evidence to back it up with.
We may never know the answer to that question, but what we do know is that as marketers, we can use this characteristic of humans to our advantage. If people are willing to believe in something such as the image of the Virgin Mary on a cheese sandwich, then they surely have the ability to believe in your product without having experience with it first hand. My personal opinion is that people do believe what they want to believe. For example, I am completely guilty of falling into the traps of infomercials on television. I always want the next hot new product or the next fitness product that is going to give me my “ideal body.” Even though, I know better, I still fall into these traps because I want to believe that buying these products will work for me. My parents always have to remind me that those infomercials are all about stretching the truth. The good news for the marketing industry is that there are many people in the market who are just like me: willing to be your product with full faith that it will meet their every expectation.
Shermer also talked about how people tend to only remember what goes right versus the failures when they are exploring something new. I can definitely see how this is human nature. It very much goes along with a customer and the idea of cognitive dissonance. Say you just bought a new car. Soon after your purchase you continue to take notice of other cars on the street and pay closer attention to car commercials when watching tv. This is because you are still trying to reassure yourself that you made the best decision. When people only take into account the “hits” versus the “misses,” they are in fact reassuring themselves that the product or service they bought is the best choice they could’ve made. Again as marketers, by knowing this information, we can use it to our advantage. Realizing that we just need to reassure our customers after their purchases can be used to our advantage. This can help get repeat business as well as maybe get happy customers to make referrals to other people about our products.
Overall, I found this podcast to be very insightful. It is truly amazing what our eyes can trick our minds into believing. I think it is hard for people to see something incredible and not realize that it is most likely due to chance versus scientific reason. From now on, I will be much more careful about what I choose to believe without having hard evidence to back it up with.
Thursday, October 25, 2007
Do Loyalty Programs Really Work?
Do loyalty programs really create loyal customers? If the incentives disappeared, would the customers keep coming back? These are questions being asked by many people regarding the actual effectiveness of loyalty programs. For example, one of the brands that I am most loyal to is Honda, which has never offered a loyalty program to entice me to buy from them. Instead, I remain loyal to Honda for free because of the quality and service I receive from my Honda car and the Honda dealerships I’ve been to. On Monday, Byron Smith from Microsoft gave a very interesting speech on how Microsoft is trying to use loyalty programs to create incentives for Internet users to switch from their current search engine over to Microsoft Live. In this presentation, he gave examples of how Microsoft will be working to attract more users to its website by giving them X-Box Points that can then be redeemed on other merchandise. American Airlines came to my mind at this time because I could see a parallel between what Microsoft wants to do and what American Airlines started doing over 25 years ago with their frequent flier loyalty program called AAdvantage.
American Airlines has found its loyalty program to be extremely profitable for them. The reason for its profitability is that American sells its frequent flier miles to retailers that then use those miles as rewards for its customers. Since the incremental cost for passengers on airplanes is so low (about $20), American is receiving customer loyalty with very little incremental cost. Also, airlines don’t have to allow customers to redeem miles if there are no available tickets and if there are available seats, it is better for them to give a ticket away than to let the plane leave with many empty seats. So for the airline industry, loyalty programs such as the frequent flyer programs are a great strategic fit for making profit. The question then lies in whether this is actually creating loyalty to the airline or is it just a way for customers to find a great deal on a flight?
For Microsoft, I understand the need for them to create loyalty to Microsoft Live. Right now, Google is the hands-down leader in the Internet search engine profit war because it had the best search engine when it came out. Now, Microsoft has improved its own search engine and is betting that people will love it if they give it a try. They have done research that shows that people will definitely switch to Microsoft if they are rewarded for it, which means that they are not extremely loyal to their current search engine. Byron also mentioned though, that if the products are not equivalent, then the rewards will not have the effect it should. Also, he wonders, just like other people in the marketing world, will this loyalty program create true loyalty to Microsoft’s brand? Or will this just be a temporary fix for the deeper problem of having an inferior product? There is no question that loyalty programs can help switch some users from one brand to another. The ultimate question is how can we get those users to be completely loyal to our brand even if we weren’t paying them.
American Airlines has found its loyalty program to be extremely profitable for them. The reason for its profitability is that American sells its frequent flier miles to retailers that then use those miles as rewards for its customers. Since the incremental cost for passengers on airplanes is so low (about $20), American is receiving customer loyalty with very little incremental cost. Also, airlines don’t have to allow customers to redeem miles if there are no available tickets and if there are available seats, it is better for them to give a ticket away than to let the plane leave with many empty seats. So for the airline industry, loyalty programs such as the frequent flyer programs are a great strategic fit for making profit. The question then lies in whether this is actually creating loyalty to the airline or is it just a way for customers to find a great deal on a flight?
For Microsoft, I understand the need for them to create loyalty to Microsoft Live. Right now, Google is the hands-down leader in the Internet search engine profit war because it had the best search engine when it came out. Now, Microsoft has improved its own search engine and is betting that people will love it if they give it a try. They have done research that shows that people will definitely switch to Microsoft if they are rewarded for it, which means that they are not extremely loyal to their current search engine. Byron also mentioned though, that if the products are not equivalent, then the rewards will not have the effect it should. Also, he wonders, just like other people in the marketing world, will this loyalty program create true loyalty to Microsoft’s brand? Or will this just be a temporary fix for the deeper problem of having an inferior product? There is no question that loyalty programs can help switch some users from one brand to another. The ultimate question is how can we get those users to be completely loyal to our brand even if we weren’t paying them.
Friday, October 19, 2007
Wal-Mart Strives to Improve Lives
Wal-Mart has finally figured it out. Even though it follows a low-cost strategy, it shouldn’t be all about saving money. They have realized that their strategy also needs to be about improving the lives of their customers. With this realization, they have launched a new marketing campaign that is intended to make customers feel better about shopping at Wal-Mart. This new campaign called “Save Money, Live Better,” focuses on customer experiences rather than the older campaign that only concentrated on having the lowest prices. Wal-Mart came in to the market and completely dominated the low-price retail stores. Now, they are hoping to keep low prices while providing more variety and better experiences for their customers. In this article, I will be discussing what Wal-Mart is doing differently now to keep its customers satisfied.
In 2006, Wal-Mart made a mistake when it decided to try and go upscale without first considering its customers. Their main competitor Target had huge success with differentiating itself from the discount retailer by providing much more high fashion products that were still very reasonably priced. When Wal-Mart decided to try this strategy, it failed. They didn’t realize who their core customers were or what they really wanted. Wal-Mart customers are there to get a great deal. In an article from the International Herald Tribune titled “Wal-Mart’s New Strategy Goes Back to Basics: Saving Money,” the author expresses that Wal-Mart’s diverse customers all want the same thing: low prices, just like they always have. As a marketing major, I know the whole idea behind marketing is to discover and satisfy consumer’s needs. Wal-Mart’s failed strategy is a clear example of why finding out what your customers want is essential before ever changing your core strategies.
Once Wal-Mart executives saw that they had chosen the wrong strategy, they realized that they needed to get back to its core values. Wal-Mart needs to be about saving money for the customers to make their lives better. They have scaled back the higher priced and fashionable items and gotten back down to what is really important to the Wal-Mart customer: low prices on great brands and products. Personally, I agree with this newer strategy and it makes me feel better about shopping at Wal-Mart. The new commercials they have been running convey the feeling that Wal-Mart cares about its customers rather than just advertising their everyday low prices. The commercials show normal families in their everyday lives and tells a story about how Wal-Mart helps to make their life better. According to the SEM’s we discussed in class, this new strategy really conveys good feelings that make you think that Wal-Mart cares for its customers.
I have decided to take a closer look at Wal-Mart as my individual report because it is the most powerful company in the world today. It has a huge impact on our society and I am also interested in learning more about their newest goal to become more environmentally friendly. Wal-Mart is hoping to turn around the bad reputation is has and wants to become a company that is seen in a good light that truly cares about its customers. I think they are on the right track. My paper will go beyond the price cutting strategies of Wal-Mart into how it can use its power to better the world.
Source:
http://www.iht.com/articles/2007/03/01/business/walmart.php
In 2006, Wal-Mart made a mistake when it decided to try and go upscale without first considering its customers. Their main competitor Target had huge success with differentiating itself from the discount retailer by providing much more high fashion products that were still very reasonably priced. When Wal-Mart decided to try this strategy, it failed. They didn’t realize who their core customers were or what they really wanted. Wal-Mart customers are there to get a great deal. In an article from the International Herald Tribune titled “Wal-Mart’s New Strategy Goes Back to Basics: Saving Money,” the author expresses that Wal-Mart’s diverse customers all want the same thing: low prices, just like they always have. As a marketing major, I know the whole idea behind marketing is to discover and satisfy consumer’s needs. Wal-Mart’s failed strategy is a clear example of why finding out what your customers want is essential before ever changing your core strategies.
Once Wal-Mart executives saw that they had chosen the wrong strategy, they realized that they needed to get back to its core values. Wal-Mart needs to be about saving money for the customers to make their lives better. They have scaled back the higher priced and fashionable items and gotten back down to what is really important to the Wal-Mart customer: low prices on great brands and products. Personally, I agree with this newer strategy and it makes me feel better about shopping at Wal-Mart. The new commercials they have been running convey the feeling that Wal-Mart cares about its customers rather than just advertising their everyday low prices. The commercials show normal families in their everyday lives and tells a story about how Wal-Mart helps to make their life better. According to the SEM’s we discussed in class, this new strategy really conveys good feelings that make you think that Wal-Mart cares for its customers.
I have decided to take a closer look at Wal-Mart as my individual report because it is the most powerful company in the world today. It has a huge impact on our society and I am also interested in learning more about their newest goal to become more environmentally friendly. Wal-Mart is hoping to turn around the bad reputation is has and wants to become a company that is seen in a good light that truly cares about its customers. I think they are on the right track. My paper will go beyond the price cutting strategies of Wal-Mart into how it can use its power to better the world.
Source:
http://www.iht.com/articles/2007/03/01/business/walmart.php
Wednesday, October 3, 2007
How to Gain Competitive Advantage
Competitive Advantage is a relative term. We hear it a lot about this term, but do companies really know what it means? Do they know how to achieve it? My topic for this individual assignment is about gaining competitive advantage in the retail world. I will discuss how marketing, and more specifically, how using customer insights customer experiences can help your company gain and sustain competitive advantage. I researched this topic and found an interesting article titled, “CRM In Retail Revisited: Using Customer Insight to Build Competitive Advantage.”
The article has many great insights into how companies can gain competitive advantage through expanding their customer insights and enriching the customer experience in the retail store. The author Lane Michel argues that relationships with your customers should be composed of learning what customers need, and it is important to also be proactive in this relationship to create strong loyalty to your company brand. Retailers develop relationships with their customers and then collect data from them. Michel states that “success comes when retailers are able to maximize the value of that customer information to create a meaningful ‘in-store’ experience for their best customers.” As a whole, this article is very insightful for the world of Customer Relationship Management; it gives many great examples of companies who understand how to leverage customer insights to gain sustainable competitive advantage.
In our class we have been learning about the topic of customer insights. I think this article does a great job of summing up the importance of this topic, and I am interested in learning more about how a company can apply this to their marketing strategies to gain an edge against their competition. As I read this article, the first company that came to my mind that exudes this subject is Nordstrom’s. People don’t shop at Nordstrom’s because it has the best clothes, shoes, accessories, etc. People shop at Nordstrom’s because of the experience they have when they walk through the door: the piano man playing, the clean and organized sections of the store, and the fabulous customer service they receive. People are willing to pay more if they feel good when they are done with their shopping experience. I know you’ve all been to a store and left extremely frustrated because the racks were a mess, the store was crowded, and the service was awful! A company like Nordstrom’s know how to please their customers which keeps them coming back and creates very strong loyalty to their brand.
For my report, I will be expanding on this topic of how companies create competitive advantage through building better relationships with their customers. Traditional marketing is no longer enough to be successful in the retail world. Companies have to learn about their customers to keep them happy and use this relationship to lock-in their customers and keep them from switching over to another retailer.
Source:
Michel, Lane. “CRM In Retail Revisited: Using Customer Insight to Build Competitive Advantage.” http://www.microsoft.com/dynamics/rms/product/customerinsightwhitepaper.mspx
The article has many great insights into how companies can gain competitive advantage through expanding their customer insights and enriching the customer experience in the retail store. The author Lane Michel argues that relationships with your customers should be composed of learning what customers need, and it is important to also be proactive in this relationship to create strong loyalty to your company brand. Retailers develop relationships with their customers and then collect data from them. Michel states that “success comes when retailers are able to maximize the value of that customer information to create a meaningful ‘in-store’ experience for their best customers.” As a whole, this article is very insightful for the world of Customer Relationship Management; it gives many great examples of companies who understand how to leverage customer insights to gain sustainable competitive advantage.
In our class we have been learning about the topic of customer insights. I think this article does a great job of summing up the importance of this topic, and I am interested in learning more about how a company can apply this to their marketing strategies to gain an edge against their competition. As I read this article, the first company that came to my mind that exudes this subject is Nordstrom’s. People don’t shop at Nordstrom’s because it has the best clothes, shoes, accessories, etc. People shop at Nordstrom’s because of the experience they have when they walk through the door: the piano man playing, the clean and organized sections of the store, and the fabulous customer service they receive. People are willing to pay more if they feel good when they are done with their shopping experience. I know you’ve all been to a store and left extremely frustrated because the racks were a mess, the store was crowded, and the service was awful! A company like Nordstrom’s know how to please their customers which keeps them coming back and creates very strong loyalty to their brand.
For my report, I will be expanding on this topic of how companies create competitive advantage through building better relationships with their customers. Traditional marketing is no longer enough to be successful in the retail world. Companies have to learn about their customers to keep them happy and use this relationship to lock-in their customers and keep them from switching over to another retailer.
Source:
Michel, Lane. “CRM In Retail Revisited: Using Customer Insight to Build Competitive Advantage.” http://www.microsoft.com/dynamics/rms/product/customerinsightwhitepaper.mspx
Thursday, September 27, 2007
Blog #3: Customer Experiences
Some commercials have the power to grasp our attention and keep hold of it. One specific campaign that has this power over me is the Propel Fitness Water campaign. Bottled water is a strange phenomenon in that it has to be one of the hardest products to market since it is very difficult to differentiate your product from your competitors’. Propel has done a great job at differentiating themselves through creating a total experience for its customers. Propel is not just bottled water; it is the “fitness water.”
I’m sure you can easily remember at least one of the most recent Propel commercials. The most memorable commercial I have seen from Propel features a woman power-walking through the streets of a high profile town. Everybody is staring at her including many different celebrities. The paparazzi even begins photographing her instead of John Stamos, the actor. Music is playing in the background that makes you want to get up and get moving. A voiceover comes in saying “Fit has a feeling, and a water… Propel Fitness Water.” Then the women is snapped back to reality and she is shown walking through the nice quiet little neighborhood with a big smile on her face. To me, it is obvious that this commercial conveys the SEM of Feel. This is a commercial intended to make you feel good about yourself. The message it is sending is drinking Propel Fitness Water can put you into great shape.
Another memorable commercial is one in which a giant robot is racing through the streets of New York City or some other large city. As the giant runs, you can hear statements and people yelling about the stresses of everyday life. The music is very appropriate as the lyrics sing about being “Under Pressure.” The giant robot is letting go of some of his stress as he runs and eventually he sheds all of the “stress” and a human man is revealed. Then the voiceover comes on and states the same logo as before, “Fit has a feeling and a water… Propel Fitness Water.” I think this is such a great example of the SEM relate. I think most everyone can relate to a commercial that addresses the everyday stresses of life. Propel is trying to portray the message that exercising can help eliminate some of this stress and that Propel Fitness Water is the way to help you get fit. This is a good example of the Relate SEM also because many people have the desire for self-improvement which this commercial is promoting. Drinking Propel can help you achieve your fitness goals.
These commercials are also a great example of the SEM Act. The best example of this SEM is a commercial that shows a woman riding her bike through the city streets. As she rides, the street begins to split and starts going uphill very quickly. She continues to ride as she dodges cars and exploding pot holes. She reaches the top of the hill as the song in the backgrounds sings “I am extraordinary,” and then the drops from the hill onto the ground where she is suddenly back in the gym on her stationary bike. Once again, the motto is stated by a voiceover: “Fit has a feeling and a water… Propel Fitness Water.” This commercial makes me want to get up and exercise. It is very motivating because it shows what a woman can do if she has goals to achieve. Again, Propel Fitness Water seems to be the way to achieve any fitness goals a customer may have.
Propel does a great job differentiating itself from other bottled waters through these commercials. One area I think they need to improve on though is relaying more of the Sense SEM to the customers. I don’t think the commercials really explain what it is like to drink the fitness water. I know what customers can do after drinking the water, but I would like to be able to get a feeling of what the fitness water tastes like through their advertising. This would be a great differentiator for them especially against other sports drinks such as Gatorade or Powerade.
This has definitely been the hardest assignment for me so far in this class. I spent a couple of days paying close attention to commercials and trying to think of a good example of a customer experience that had at least 3 of the 5 SEMS from the article “A Framework for Managing Customer Experiences.” Finally, it hit me like a ton of bricks that Propel would be a great example. Although, it was still hard for me to analyze the commercials and figure out which separate SEMs would be applying to each commercials. I really don’t think I had any biases toward this company. I never even drink Propel Fitness Water. Although, I do find the commercials appealing because two of them were very empowering for women. It just showed that women can be athletic like men and achieve their fitness goals too. I guess maybe that is a little bias that I bring to this analysis of Propel Fitness Water. Just make sure to remember… “Fit has a feeling… and a water.”
I’m sure you can easily remember at least one of the most recent Propel commercials. The most memorable commercial I have seen from Propel features a woman power-walking through the streets of a high profile town. Everybody is staring at her including many different celebrities. The paparazzi even begins photographing her instead of John Stamos, the actor. Music is playing in the background that makes you want to get up and get moving. A voiceover comes in saying “Fit has a feeling, and a water… Propel Fitness Water.” Then the women is snapped back to reality and she is shown walking through the nice quiet little neighborhood with a big smile on her face. To me, it is obvious that this commercial conveys the SEM of Feel. This is a commercial intended to make you feel good about yourself. The message it is sending is drinking Propel Fitness Water can put you into great shape.
Another memorable commercial is one in which a giant robot is racing through the streets of New York City or some other large city. As the giant runs, you can hear statements and people yelling about the stresses of everyday life. The music is very appropriate as the lyrics sing about being “Under Pressure.” The giant robot is letting go of some of his stress as he runs and eventually he sheds all of the “stress” and a human man is revealed. Then the voiceover comes on and states the same logo as before, “Fit has a feeling and a water… Propel Fitness Water.” I think this is such a great example of the SEM relate. I think most everyone can relate to a commercial that addresses the everyday stresses of life. Propel is trying to portray the message that exercising can help eliminate some of this stress and that Propel Fitness Water is the way to help you get fit. This is a good example of the Relate SEM also because many people have the desire for self-improvement which this commercial is promoting. Drinking Propel can help you achieve your fitness goals.
These commercials are also a great example of the SEM Act. The best example of this SEM is a commercial that shows a woman riding her bike through the city streets. As she rides, the street begins to split and starts going uphill very quickly. She continues to ride as she dodges cars and exploding pot holes. She reaches the top of the hill as the song in the backgrounds sings “I am extraordinary,” and then the drops from the hill onto the ground where she is suddenly back in the gym on her stationary bike. Once again, the motto is stated by a voiceover: “Fit has a feeling and a water… Propel Fitness Water.” This commercial makes me want to get up and exercise. It is very motivating because it shows what a woman can do if she has goals to achieve. Again, Propel Fitness Water seems to be the way to achieve any fitness goals a customer may have.
Propel does a great job differentiating itself from other bottled waters through these commercials. One area I think they need to improve on though is relaying more of the Sense SEM to the customers. I don’t think the commercials really explain what it is like to drink the fitness water. I know what customers can do after drinking the water, but I would like to be able to get a feeling of what the fitness water tastes like through their advertising. This would be a great differentiator for them especially against other sports drinks such as Gatorade or Powerade.
This has definitely been the hardest assignment for me so far in this class. I spent a couple of days paying close attention to commercials and trying to think of a good example of a customer experience that had at least 3 of the 5 SEMS from the article “A Framework for Managing Customer Experiences.” Finally, it hit me like a ton of bricks that Propel would be a great example. Although, it was still hard for me to analyze the commercials and figure out which separate SEMs would be applying to each commercials. I really don’t think I had any biases toward this company. I never even drink Propel Fitness Water. Although, I do find the commercials appealing because two of them were very empowering for women. It just showed that women can be athletic like men and achieve their fitness goals too. I guess maybe that is a little bias that I bring to this analysis of Propel Fitness Water. Just make sure to remember… “Fit has a feeling… and a water.”
Wednesday, September 19, 2007
Choices, Choices, Choices
Society today is overwhelmed with the unlimited amount of choices we have to make on a day-to-day basis. As a marketer, we are solely concerned with giving the customers what they want. This includes anticipating their wants and needs so we can satisfy them even before they know what their wants and needs are. As a result, many products and services have too many different choices and this can lead to confusion for the consumer as they try to decide on the product that fits their needs best. In the Pod cast by Barry Schwartz titled The Paradox of Choice, he discusses this overwhelming choice phenomenon, and gives his opinions on why this is actually hurting rather than helping the consumer.
First of all, Barry discusses the dogma that the world believes in that has led to this overwhelming amount of choices. In this belief, if we want to maximize welfare for the world, we need to maximize choice, which leads to more freedom for individuals. On the surface this sounds like a great idea! However, with further examination, it is easy to see why this much choice can actually become debilitating for the customer. Barry makes three points as to why having too many choices is a bad idea. First, these overwhelming amount of choices lead to paralysis rather than liberation for the consumer. I agree fully with this statement because I have experienced this many times first hand. For example, I’m sure you all have stood in the grocery store aisle for 15 or more minutes trying to decide on something as simple as which cereal to buy. Often times, you might get frustrated and decide that you might not need any cereal after all!
The second point Barry makes is that with all the choices consumers have now, they will be much less satisfied with their choice than if they were fewer options. If in fact, we are not 110% satisfied with our choice, it is very easy to think about the other choices and consider the opportunity costs associated with each choice. I find myself having this problem fairly regularly. A simple but common example of this problem would be having a hard time deciding what to order at a restaurant with too many menu items. I always order one thing, and then wish I had ordered the other option I had in mind. This principle applies to small purchases like this but can also apply to large purchase decision when it is more important to make the right decision.
The third point he makes is very similar to the second point but it actually something as marketers we are very familiar with: cognitive dissonance. With all these choices, Barry stresses the fact that consumer’s expectations have risen greatly. We now expect to buy something and it be the perfect product for us. Even if we pick a great product, we will always be unsatisfied with it because we bought the product with such high expectations. In this case, if what we choose is not perfect, we have no one to blame but ourselves. Consumers can no longer blame the industry for not producing the best products because there are so many choices, that we should’ve been able to pick the perfect one.
Barry Schwartz’s points have a large impact on marketing positions. Now, it is our job to not only provide choices for our customers, but to also make sure we are not overwhelming our customers with too much choice. He has made a very important customer insight that should be taken into account very seriously. I would say this will become a major concern for companies as they look into how many choices they should be providing to their customers. Companies do need to make sure they are offering the right mix of products as to not overwhelm customers but to also make sure all of their needs are met. I think this is going to really affect the marketing world as we need to figure out what exactly our customers want without scaring them with all of our options.
First of all, Barry discusses the dogma that the world believes in that has led to this overwhelming amount of choices. In this belief, if we want to maximize welfare for the world, we need to maximize choice, which leads to more freedom for individuals. On the surface this sounds like a great idea! However, with further examination, it is easy to see why this much choice can actually become debilitating for the customer. Barry makes three points as to why having too many choices is a bad idea. First, these overwhelming amount of choices lead to paralysis rather than liberation for the consumer. I agree fully with this statement because I have experienced this many times first hand. For example, I’m sure you all have stood in the grocery store aisle for 15 or more minutes trying to decide on something as simple as which cereal to buy. Often times, you might get frustrated and decide that you might not need any cereal after all!
The second point Barry makes is that with all the choices consumers have now, they will be much less satisfied with their choice than if they were fewer options. If in fact, we are not 110% satisfied with our choice, it is very easy to think about the other choices and consider the opportunity costs associated with each choice. I find myself having this problem fairly regularly. A simple but common example of this problem would be having a hard time deciding what to order at a restaurant with too many menu items. I always order one thing, and then wish I had ordered the other option I had in mind. This principle applies to small purchases like this but can also apply to large purchase decision when it is more important to make the right decision.
The third point he makes is very similar to the second point but it actually something as marketers we are very familiar with: cognitive dissonance. With all these choices, Barry stresses the fact that consumer’s expectations have risen greatly. We now expect to buy something and it be the perfect product for us. Even if we pick a great product, we will always be unsatisfied with it because we bought the product with such high expectations. In this case, if what we choose is not perfect, we have no one to blame but ourselves. Consumers can no longer blame the industry for not producing the best products because there are so many choices, that we should’ve been able to pick the perfect one.
Barry Schwartz’s points have a large impact on marketing positions. Now, it is our job to not only provide choices for our customers, but to also make sure we are not overwhelming our customers with too much choice. He has made a very important customer insight that should be taken into account very seriously. I would say this will become a major concern for companies as they look into how many choices they should be providing to their customers. Companies do need to make sure they are offering the right mix of products as to not overwhelm customers but to also make sure all of their needs are met. I think this is going to really affect the marketing world as we need to figure out what exactly our customers want without scaring them with all of our options.
Sunday, September 9, 2007
Customer Satisfaction: Amazon and Yellow Freight System
Amazon and Yellow Freight System are two completely different companies in two completely separate industries. Amazon is a web-based company that sells a large variety of items at great prices with fast delivery. On the other hand, Yellow Freight System is a transportation company that prides itself on giving the customer exactly what it wants. Many people would say these two companies have nothing in common. My opinion would be much different by saying these two companies have found the secret to success: customer satisfaction. They have used customer insights to find out exactly what customers want and then have done everything in their power to give it to them.
Both of these successful and innovative companies have realized the importance of learning what the customers want and how they feel at any given time about their company. For Amazon CEO Jeff Bezos, he fully relies on quantitative data to make decisions rather than any opinion or judgment calls. His philosophy is to use data to help make the best decisions; companies should “do the math and figure out the right answer.” (Vogelstein) Very similar to Bezos’ philosophy is that of Bill Zollars’, the CEO of Yellow Freight System, in which the company has a new focus on its customers. In order to find out what the customers are thinking, Yellow surveys 600 customers a month. Yellow is so focused on becoming the best service for its customers that it “strives to be as fastidious about service as Nordstrom, Starbucks, and FedEx.” (Salter) They want to take customer service to a higher level than any other freight transportation company has before.
Advanced technology is the main reason both of these companies have been able to succeed. Technology for both Amazon and Yellow Freight has led to greater efficiencies in operations that give them great competitive advantage over other companies in their industries. Yellow has equipped each employee with a wireless mobile data terminal that allows them to be much more efficient and speedy in their everyday tasks. Amazon, on the other hand, has used technology to create completely computerized warehouse systems that have the capability to also send information directly to employees about what item to get off the shelf and in what order to obtain efficiency. Both companies also stated in each article that technology has allowed their employees to make decisions themselves rather than waiting for an answer from supervisors which can be time consuming. Amazon even has an award called the “Just Do It” that encourages employees to do something without their boss’s permission to enable independent thinking.
By comparing these two companies, I have found that they both have been successful in using customer insights to transform their companies from average into highly technological companies concerned mainly with providing the greatest amount of customer satisfaction. In my opinion, companies will no longer be able to survive without a full emphasis on discovering and providing customers with their wants and needs. If your company does not do their research to discover these important customer insights, they will not survive because another company will come along and give the customer everything they need and providing them with a great customer experience. After all, customer experience is what brings customers back. Think about it, when is the last time you recommended a restaurant to a friend where you had a bad service experience? What about a restaurant where you had a wonderful experience? Overall, I think companies are starting to understand the importance of customer satisfaction exactly like Amazon and Yellow Freight System did.
Sources:
Salter, Chuck. "Fresh Start 2002: On the Road Again." Fast Company Jan. 2002. 9
Sept. 2007.
Vogelstein, Fred. "Mighty Amazon." Fortune 26 May 2003. 9 Sept. 2007
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Both of these successful and innovative companies have realized the importance of learning what the customers want and how they feel at any given time about their company. For Amazon CEO Jeff Bezos, he fully relies on quantitative data to make decisions rather than any opinion or judgment calls. His philosophy is to use data to help make the best decisions; companies should “do the math and figure out the right answer.” (Vogelstein) Very similar to Bezos’ philosophy is that of Bill Zollars’, the CEO of Yellow Freight System, in which the company has a new focus on its customers. In order to find out what the customers are thinking, Yellow surveys 600 customers a month. Yellow is so focused on becoming the best service for its customers that it “strives to be as fastidious about service as Nordstrom, Starbucks, and FedEx.” (Salter) They want to take customer service to a higher level than any other freight transportation company has before.
Advanced technology is the main reason both of these companies have been able to succeed. Technology for both Amazon and Yellow Freight has led to greater efficiencies in operations that give them great competitive advantage over other companies in their industries. Yellow has equipped each employee with a wireless mobile data terminal that allows them to be much more efficient and speedy in their everyday tasks. Amazon, on the other hand, has used technology to create completely computerized warehouse systems that have the capability to also send information directly to employees about what item to get off the shelf and in what order to obtain efficiency. Both companies also stated in each article that technology has allowed their employees to make decisions themselves rather than waiting for an answer from supervisors which can be time consuming. Amazon even has an award called the “Just Do It” that encourages employees to do something without their boss’s permission to enable independent thinking.
By comparing these two companies, I have found that they both have been successful in using customer insights to transform their companies from average into highly technological companies concerned mainly with providing the greatest amount of customer satisfaction. In my opinion, companies will no longer be able to survive without a full emphasis on discovering and providing customers with their wants and needs. If your company does not do their research to discover these important customer insights, they will not survive because another company will come along and give the customer everything they need and providing them with a great customer experience. After all, customer experience is what brings customers back. Think about it, when is the last time you recommended a restaurant to a friend where you had a bad service experience? What about a restaurant where you had a wonderful experience? Overall, I think companies are starting to understand the importance of customer satisfaction exactly like Amazon and Yellow Freight System did.
Sources:
Salter, Chuck. "Fresh Start 2002: On the Road Again." Fast Company Jan. 2002. 9
Sept. 2007
Vogelstein, Fred. "Mighty Amazon." Fortune 26 May 2003. 9 Sept. 2007
Friday, August 31, 2007
Introduction Post
Hey Customer Insights Class! This is just my introduction post, but I'm looking forward to getting to know everyone this semester!
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