Although many earlier academics define marketing as merely a process of satisfying customer needs in order to gain profits, more recent developments of the definition include its inherent connection with delivering period value to customers in order to maintain ongoing relationships (Webster, 1992). Marketing Concepts of marketing have adapted over time, according to various cultural contexts and developments in academic thinking. The simplest delineation of marketing is “meeting needs profitably’ (Kettle et al. (2010), however this definition understates the wide variety of marketing functions and practices that are omnipresent in the marketing world today. Through time, marketers and organizations have realized that organizations that focus all energy on profit making, are unlikely to maximize refits. Instead, marketers must seek to identify target customers and their specific needs, and then deliverer appropriate value to customers to build long-term, profitable relationships (Kettle et al. , 2010).
Because of this, the Australian Marketing Association (2007) understands marketing as being a process, which involves “exchanging offerings” not only with customers, but also with clients, partners and “society at large”. This interpretation not only appreciates the continuous nature of marketing, but also the fact that it is about mutual exchange with all publics, and not just customers. Smuggle must maintain good relationships with various publics including customers, but also suppliers and employees. To do this, Smuggle must benefit all publics by determining their specific needs, and then satisfying these needs in the form of offerings.
Don’t waste your time!
Order your assignment!
Therefore, “meeting needs profitably’ is undoubtedly at the core of marketing theory, however in practice, marketing is much more complex as it involves mutual exchange of offerings in order to establish and strengthen relationships. Another key aspect of marketing requires organizations to continually anticipate and respond to changes in their external environments. Environments are factors that may influence an organization’s performance, and include competitors, customers, suppliers, pressure groups and more general factors such as global, economic and technological conditions (Robbins, Bergman, Stag, & Coulter 2012).
Lynch (1994) observes that organizations must constantly scan these environments, because without an acute understanding of these conditions, organizations cannot comprehend what their target markets need, or will need in the future. This idea revolves around creating competitive advantage, which Smuggle achieves by monitoring changes in its customers’ behaviors and attitudes, knowing TTS competitors such as Kaki K, and comprehending changes in its broader environment.
For example, Single’s battery operated products such as the electric eraser, have responded to changes in Single’s technological environment, in which there is an increasing demand for automatic products. As well as this, the eraser exemplifies Single’s understanding of the current dire state of the economic environment, and therefore retails at only $7. 95. Therefore Smuggle distinguishes itself from its competitors by being highly sensitive to its environment and creating products that deliver superior value to its target markets.
Customer Value Arguably, the most critical aspect of marketing is “creating, communicating, and delivering value to customers” (Schultz, 2007). Kettle et al. (2010) define customer value as the difference between the benefits a customer gains from a product or service, and the cost of obtaining it. Smith and Colgate (1988) argue that what a customer values changes according to the situation or product, and also is revised by the customer over time. Value is also perceived differently between customers, and is relative to the value customers perceive is available from market alternatives (Smith & Colgate, 1988).
Customers may choose to shop at Smuggle over alternatives such as Kaki K because they may perceive Smuggle to have similar quality products at a lower monetary cost. Conversely, other customers may not place a high importance on color and aesthetic appearance when shopping for a pen, and consequently may take their money to somewhere with more standard office pens, such as a newsagent. When assessing value, customers only factor in features of a product which they deem are important (Kettle et. , al).
Compelling value propositions must be created in order to entice customers and meet their specific demands (Smith & Colgate, 1988). Smuggle offers products that are functional, affordable and are creatively and colorful designed to inspire fun in school and work tasks. Customers match their expectations to Single’s value proposition, and if a customer believes the product does not hold the benefits it is supposed hold, the customer will be dissatisfied (Kettle et. , el). Therefore, Smuggle must either meet or exceed customers’ expectations in order to satisfy them.
This process is integral to the ‘mutual exchange’ characteristic of marketing, because companies must gauge demand and then deliver value in order to establish long-lasting relationships, but at he same time customers must gauge the value of products and deliver offerings (in the form of revenue). Firms that deliver superior value gain competitive advantage and will therefore increase their revenue, however this enhanced value may come at profit-diminishing cost (Lynch, 1994). Organizations create superior value by identifying the types of value that their customers ‘need’.
Sheet and Participatory (1991) specify five types of value that drive consumer choice- functional, social, emotional, epistemic and conditional. Experiential value is another type of value, which is highlighted by Park, Jarvis and Manacling (1986). Smuggle customers are most typically young girls living in middle to high-income areas of urban Australia. Smuggle products attract and satisfy this target market by catering to the stationery needs of young girls. These values include emotional or symbolic value, epistemic value, and experiential value. Single’s your turn’ range exemplifies these types of value.
Symbolically, customers are able to express themselves through the product by coloring in, and designing their own pencil cases and notebooks. Like Single’s smelly erasers, the you turn’ range may arouse curiosity in customers due to the novelty aspect of the product. Customers may also value the potential benefits to their design skills, which is another illustration of epistemic value. However, experiential value is the dominating type of value present in this range of products, as it creates an emotional link between the customer and the product, because the customer must actively interact with it.
Customers would then balance all benefits they expect to gain from the product with the costs. Kettle (2000) understands buyer costs as being monetary, psychic, time and energy sacrifices. Smuggle reduces customer cost by making products highly affordable and available. To do this, Smuggle trains staff to be pleasant to deal with, and to conduct quick transactions. The products are also easily accessible by having twenty-eight stores in Victoria alone, as well as affiliate retailers.
By creating quality products with innovative features and distributing them to a wide variety of demographics across Australia at a low cost, Smuggle is able to differentiate itself and achieve superior customer value. Link between marketing and customer value In order to continually improve financial performance, companies must track and at times re-conceptualize what defines their customer value (Smith & Colgate, 1988). This is critical in learning how to better serve the needs of customers, with the aim of improving profits (Park et. , al, 1986).
Organizations respond to these changing customers’ needs by measuring customer satisfaction. This can be done through the use of surveys, complaint systems, mystery shopping and customer loss analysis (Kettle et. , al). One of Single’s marketing strategies developed to enhance customer satisfaction is the ‘color crews’ activity page on the Smuggle website. The page encourages customers to submit their designs for the rest of the Smuggle world to see and appreciate. This is in line with Single’s your turn’ range, which also encourages customers to value Smuggle for its experiential quality.
If Smuggle were to launch the ‘color crews’ website prior to distributing the your turn’ products, this would provide a trial run of the values that the your turn’ products intend to capture. Therefore, if the website did not gain the desired feedback from customers, Smuggle may have re- assessed the marketability and therefore profitability of the your turn’ range. Marketers must find a balance between delivering value to customers and generating profits. Smuggle achieves this by capturing customer value through the use of non- tangible, experiential value.
Selling (1999) understands marketing as being “a customer’s every experience with a business”. To optimism the shopping experience, Smuggle focuses on creating an environment in which customers want to be in. By filling its outlets with nicely smelling erasers and pens; tactile, chubby calculators; and novelty, bendy pencils, Smuggle creates an environment which has an extremely high sensory appeal, which is something young girls place a high value on when shopping. This was a marketing strategy developed to respond the needs and customer values of the target market in order to generate high profits.