Understanding and Managing Customer Perception By Dagmar Recklies This article first appeared in Effective Executive, ICFAI University Press, July 2006 |“It has never been more difficult to win – and keep – business through product and price distinction.”[1] | In today’s globalising economy competition is getting more and more fierce. That means it becomes more difficult for products and services to differentiate themselves from other offerings than ever before. Not only is the number of competitive offerings rising due to globalisation of production, sourcing, logistics and access to information. Many products and services face new competition from substitutes and from completely new offerings or bundles …show more content…
The value a customer perceives when buying and using a product or service go beyond usability. There is a set of emotional values as well, such as social status, exclusivity, friendliness and responsiveness or the degree to which personal expectations and preferences are met. Similarly, the costs perceived by the customer, normally comprise more than the actual price. They also include costs of usage, the lost opportunity to use an other offering, potential switching costs etc. Hence, the customer establishes an equation between perceived benefits and perceived costs of one product and compares this to similar equations of other products. Based on this, customer loyalty can be understood as to how customers feel about a product, service or brand and whether their perceived total investments with a it live up to their expectations. The important point here is the involvement of feelings, emotions and perceptions. In today’s competitive marketplace, these perceptions are becoming much more important for gaining sustainable competitive advantage. Customer perceptions are influenced by a variety of factors. Besides the actual outcome – i.e. did the product or service deliver the expected function and did it fulfil the customers need – the whole process of consumption and all interactions involved are of crucial importance. In today’s globalised information driven economy this can also comprise issues like • How other customers or influencing groups
14. What is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image?
Thus, companies seek to strengthen customer loyalty. Brand loyalty is considered to tilt the consumer to purchase the package / product specific brand (Jacoby and Chestnut, 1978). Later, Oliver (1997) defined loyalty as "a deeply held commitment to REBUY or repatronize preferred product / service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite situational influences and marketing activities, which would result in causing switching behavior "(p. 34). This conceptual definition covers two different aspects of loyalty: the behavioral. This is consistent with an integrated conceptual framework proposed by Dick and Basu (1994), that customer loyalty is regarded as a "power relationship between the relative position of the individual and repeat
Over the decades there were tremendous amount of challenges for every business. Customers have more knowledge, they have more options, and they have higher expectations. Customers are more informed with the humungous development in technology. Having more options in front of them, expectations has surpassed in retail industry. Loyalty is a customer having faith that your organization’s product or services offered is the best for them. It is the process of tapping the buying pattern of customers in a store based on their preferences. Customer loyalty is significant because it is economical to retain the old customers rather than acquiring new customers. So, organizations employ loyalty programs which reward customers for their repeat business.
Success in world competition turns on efficiency in production, distribution, marketing, and management, and inevitably becomes focused on price. The most effective world competitors incorporate superior quality and reliability into their cost structures. They sell in all national markets the same kind of products sold at home or in their largest export market. They compete on the basis of appropriate value- the best combinations of price, quality, reliability, and delivery for products that are globally identical with respect to design, function, and even fashion. If a company forces costs and prices down, and pushes quality and reliability up, while maintaining reasonable concern for suitability, customers will prefer its world-standardized products. The global competitor will seek constantly to standardize his offering everywhere. The strategy of standardization not only responds to the worldwide homogenized markets but also expands those markets with aggressive low pricing.
CVS needs to think through numerous elements impacting its’ business. Pricing strategies, rivals and their current products, consumer demands and suppliers are examples of these elements. For pricing strategies, CVS should consider closeouts, discounts, product bundle pricing, penetration pricing, geographical pricing, and membership or trade pricing. For non-pricing strategies, options comprise: enhanced service quality, longer opening hours, advertising, and extended warranties (Kimmons, n.d.). By pricing similar products in a different way they must focus on regional demographics because geographic pricing enables the maximization of profit. For promoting unique or new products at provisional price drops, penetration pricing is the most effective. Finally, bundle pricing and closeouts can be engaged when several
By definition, customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived
Only 22% of consumers say the average retailer understands them as an individual, and only 21% say the communication they receive from the average retailer are “usually relevant”. Most companies understand how critical is to do better – 88% say their growth depends on personalising the customer experience – but lack the resources and expertise to design an improved customer journey. Only 37% believe they have the
The strong competition among rivals pursuing a similar strategy is vastly based on product differentiation and a niche market attraction, as companies are constantly working to surpass their competitors and seek to provide just what certain consumers want.
A successful company would put its products at a competitive price but this doesn’t mean it has to be the cheapest in the market – supplying value-adds or better value for money or a personal service might help the company to compete with other rivals or competitors.
Businesses continually adapt to a changing environment to maintain their market position (Appelbaum, Habashy, Malo, & Shafiq, 2012; Biedenbacha & Soumlderholma, 2008). Change is inevitable considering the current rate of technological advancement and the growth in global competition (Appelbaum et al., 2012; Armenakis & Harris, 2009; By, 2007). Increasing competition and the need for strategic flexibility and globalization is affecting almost every organization today, regardless of size, market, focus, and so on (Jaros, 2010).
the psychological meaning of a product to customers. On the other hand, cost is related
Primarily the loyalty is based on perception, not tangible evidence. Here we can see how important brand equity and positioning can be to a product that is otherwise probably on par with many of its competitors, but the message conveyed by the brand is quite different.
In order to achieve an unconventional spot in the market place, Michael et Augustin has to identify competition, potential customers and create customer value propositions. As we have seen in the first part of this paper, there are many competitors with similar products, yet, there are high end producers like Fauchon and Hediard. Division of the market implies that Michael et Augustin can find a spot between these
The term “Brand Loyalty” also called as “Customer Loyalty” has been in the business industry since a very long time as a model to be used in conducting business. But it wasn’t until the mid to late 1900’s that the term was actually given its due importance by making it a vital part of advertising and marketing. The concept of marketing evolved substantially from being focused on sales of a product to having Customer satisfaction to be its focal point. Studies further revealed that there was a positive correlation between customer satisfaction and Brand Loyalty.