Consumer Empowered

For a layman, marketing has been perennially defined as the function of business to sell a product to a consumer. As businesses grew, it was realised by the new age thinkers that the definition and function of marketing goes way beyond this bounded thought which only cared for a customer as a resource to generate revenue and the business as a mechanism to create product. The new wave of marketers thought of marketing as being focussed on value creation and its delivery to the end consumer. A major focus was on improving customer relationship. The growing importance of retaining customers rather than procuring new ones reiterated the crucial concept of Customer Relationship Management which led to the establishment of Customer Lifetime Value as a criterion to check the profitability of business.

With the advent of pro-consumer thinking rather than pro-sales line of thought, the methods of value delivery have seen certain fundamental changes. Earlier, price was assumed to be the sole criterion for demand of a product, but now minute segmentation of consumers based on different values delivered to different groups of customers by the same product indicate the pockets of demand irrespective of the prices. Add on services have assumed paramount importance. The consumer today is well educated and can be highly demanding and the companies have to deliver on their promise. 

The IT age has empowered the consumer enormously. The customer is well informed due to “connectivity” with the world, has the option of getting advised from users of different products through internet or television or other media. He or she also has the choice to lambast a product or a company for not giving the desired results. The power to voice an opinion publicly has put an impetus on the companies to perform in every fashion and has forced the transformation of laid back tortoises into agile hares. The marketing plans of firms have moved from tele-advertising and print media to digital age and e-marketing. Telephones and internet are the new points of contact.

These means of communication offer new opportunities for customer relationship management. Companies have the ability to get in touch with on-the-move consumers. Also, since internet and mobile have become a way of life for today’s consumer, 24 hour contact is possible. Intelligent usage of digital media will mark the success of new businesses. The attempt is also to make it easy for the customer to get in touch with the company whenever and wherever he or she requires. The rationale, thus, is to provide customer satisfaction through better and faster access which in turn leads to better and faster service. The seller’s concept of marketing, hence, is out of the window.

All the exercise today is based on the realization that retaining a customer is more sensible based on the lifetime value a long term customer provides and, thus, impacts the overall profitability of the business. Relationship marketing is the buzzword today. Companies are lining up at the doors of consumers to provide better products and value added service. The choice set for a consumer has exploded. Additional services are used to charm the customer and the customer can always negotiate for even more!

Some companies have hence moved on, to creating new ways of communicating the value to the consumer. One of the fastest growing channels is Experiential Marketing. The idea behind experiential marketing is to make the customer feel connected with the product. The connection has to be emotional as well as rational. If the consumer is able to relate to the product, a sale will occur. This form of marketing appeals to the senses of the consumer. 

Instead of just focussing on informing the consumer about the product, experiential marketing campaigns allow an interaction between the product and the consumer. The consumer experiences the product and its benefits. This ability to experience and then buying gives confidence to the consumer and makes him/her understand and judge the product or service better.

Mass media has certain limitations, especially in personalizing a product’s benefit knowledge as per the requirement of individuals. Experiencing the product/service, thus, opens new avenues for marketing managers. So, Absolut Vodka gave away sample bottles of their new product in clubs in Australia to spread the word and more importantly, the taste. Hershey on the other hand had Hershey’s Kisses candy mobile marketing campaign’s 25 foot vehicle running through 75 cities a year to promote its candy. Nike gives you a choice to “design your own shoes”.

Such campaigns have suddenly given the market a life of its own. Absorbing the customer in an experience and establishing a positive association are now become paramount to a successful sale. Consumer has a real-time touch with the product, so the touch points become important. If the company messes up in creating a worthwhile experience, the consumer and the sale will vanish in thin air.

The path to tread for companies is challenging but highly lucrative. The evolution is on and will become more and more innovative with the passage of time. And as the consumer gains more bargaining power and becomes more demanding, he would be the real winner. 

Shardul Bahuguna

Marque

IIM Rohtak