KEEPING INSYNC WITH CONSUMER

Innovations had become an important competitive tool to survive in the existing environment and it alters consumer preferences frequently. Options in front of a consumer are numerous. To keep pace with consumer’s taste is a big challenge to the marketers. Capturing consumer insights is to be dynamic with market changes. Today organizations are forced to realign their business strategies to acquire and retain their customers. This article provides suggestions to understand the dynamic consumer preferences and to retain them profitably. The suggestions are Continuous tracking of consumer insights, Customizing product and personalizing service, Bridging gap among the existing offerings, Effective utilization of technology and optimizing resources, Emotional bonding with the consumers and increased societal marketing activities and Customer first starts with employee first

Before globalization, consumers’ behavioral pattern was less significant to the marketers because their consumption was driven by them. For a long period of time, marketers determined what and what not to offer their consumers. Consumers had no way but to accept those offers made by them. Their apparel, food, shelter, entertainment etc were designed by the marketers who paid less attention to customizing their needs and wants. The consumer awareness about consumption of the products and services was very low. They did not have the power to consume what they want. Marketers paid little attention to listening to the consumers. There was neither any market research nor consumer grievance. The market was dominated by oligopoly players who drove the market. The 4Ps mix was based on demographic factors.

The opening up of the economy has exposed the domestic market to global influence. Suddenly, the market is flooded by many large players, with marked differences in the mode of operations such as strategic alliances, joint ventures, private limited, subsidiaries, public-private partnerships etc. This has dramatically changed the direction of the trade. The consumers are exposed to a multitude of options; as a result there is a dynamic change in consumer behavior. This change in consumer behavior is increasingly bridging the gap between diverse cultures. The satellite revolution and increase in communication unify the market across the globe. The flow of information, in and out of the market, helps the consumer gain knowledge about the benefits of the products and services consumed by them. Today, in addition to the demographic factors, psychographic factors also play a vital role in the consumption pattern of the consumers.

With change happening everywhere, the consumers too want to synchronize with the change. This change is driven mostly by the psychographic factors like attitude, values and beliefs. The psychographic factors provide a clear advantage over the demographic factors in motivating the consumers to keep pace with the change. This is well illustrated by Dr. Dan Herman’s “The fear of missing out!”

According to Herman, the consumers are motivated by the fear of missing out. They do not want to lag behind in comparison to their reference groups and hence keep changing their lifestyle. They change their jobs, their preference and priorities, even life partners. Today’s consumers opt for ‘Brand Novelty’ over ‘Brand Loyalty’ triggered by the numerous players in the market competing for the same segment of consumers.

The behavioral patterns of the consumers are analyzed and listed by Dr. Dan Herman as follows -

1. Today, people want to be “multi-taskers” i.e. within the given time, they want to manage their time efficiently. (It is not sufficient that the product satisfies the basic intended want but it must also be capable of offering an assortment of services/benefits.)

2. They aspire to be as multifarious as possible. (The consumer depicts a wide variety in their behavior on different occasions.)

3. They try to be as up-to-date as possible. (The consumers are very inquisitive about the novelty happening around them, and try it out without much delay be it a restaurant or a supermarket.)

4. They want to be connected twenty-four hours a day across the globe. (They are carried away by the storm of communication accessories.)

5. They seek immediacy and instant gratification. (They are highly demanding and very impatient, with minimum tolerance for delay in the delivery of product or service.)

The facts mentioned above are the characteristics of the modern consumer. Tackling such consumers and satisfying them is the prime challenge for any company. This is a major challenge posed before marketers. The consumer preferences are so much more dynamic than that of product offering in the market that the likely chance of the product becoming outdated even before its entry in the market from the Pandora’s Box of the company is quite common. Compounding the difficulty is the effective loss of distinctness in the segments of consumers. Hence it calls for the company to be dynamic in its research as well as product offering to keep pace with the rapidly changing scenario.

There have been instances where a product successful in a test market does not hold its life and validity for a long time, even till the product is officially launched in the market. This is the scenario in spite of the company investing heavily on existing tools like CRM, BI, SCM, and ERP to equip itself to diminish the gap between the consumer’s pace of change and its orientation in the changing market. Hence, unless the company adopts a customer centric approach at its core functionality, these applications are of very little significance.

To keep pace with consumer preference, marketers need to have an effective marketing system. The suggestions are given below will help the company manage the dynamic consumer.

The traditional consumer research methods failed to capture the changing behavioral patterns of consumers with immediacy. The market is evolved with new methods of consumer research methods to track consumer insights such as online focus group, electronic bulletin boards, online conjoint analysis, online test market etc. Encouraging the consumers to effectively express their preferences and expectations regarding a product through the electronic medium, for instance through the company’s website, is one way of optimizing the product attributes. The right blend of online and offline research methods will help marketers gain knowledge about consumer preference on a real time basis.

One of the important sources of consumer information that helps the marketers track the consumer insights is CTP (Customer Touch Point- it is the point/medium where the customer interacts with the company). A model given below will help a company track its consumer insights using CTP.

The star model has CTP at its edges where customer interacts with company; the node connecting two CTP has a STCM (short term complaint management system) to mitigate the error in short term. The STCM either solves the problem or it guarantees the customer that the problem can be addressed within a stipulated period of time depending upon the nature of the problem. The quantitative and qualitative data captured in each CTP is collected and stored in the data repository. Effective Data Mining tool is used to dig out the refined data, which is then analyzed at DMR (dynamic marketing research). The DMR reports the changes to be incorporated in the product / service to the concerned management team.

Traditional segmentation of consumer has lost its relevance and marketers today try to segment the market in a creative way. Marketers now look for a niche in every mass market for growth. Most of them realign their strategies from product centric to customer centric. Customization of products and personalization of services is directly proportional to the value of the product/service attached to it. Daniel Yankelovich and David Meer in “Rediscovering market segmentation [2]” emphasize that effective segmentation is dynamic in two aspects. “First effective segmentation concentrates on consumers’ needs, attitudes, and behavior, which can change quickly, rather than on personality traits, which usually endure throughout a person’s life. Second, effective segmentation can be reshaped by market conditions, such as fluctuating economics, emerging consumer niches and new technologies, which in today’s world is evolving more rapidly than ever.”

Customization can be built on standardized core values. The consumer expects basic functional value in every product. Exploring these functional values and standardizing to exceed the consumer expectation will result in consumer delight. To some extent the awareness about value for money among the consumers has increased over a period of time. It is not only important for marketers to give value for money but also to make them aware about the delivery of the value. This can be done by prioritizing the attributes with value for money. With the help of technology marketers are moving to the concept of “Segment of one-Marketing [3]” i.e. the ability to use the information system to customize the product and personalize the service to the individual customer.

Most of the companies are engaged in identifying the latent needs of the consumer; but they hardly do gap analysis with their existing offerings. Though the earlier one is important in the matured market; the latter is necessary to keep pace with changes happening in the market. Further, companies should engage in competitors’ analysis, which should enable the company to keep pace with the competitive strategies that are driven by dynamic market changes.

A product/service offered by company has both functional and emotional values attached to it. The competitors also have similar product/service but with differences in the level of attributes in functional and emotional values.

Company offering	A	B	C
Functional attributes	a1, b1, c1 ……n1	a2,b2,c2…n2	a3,b3,c3….n3
Emotional attributes	x1,y1…..z1	x2,y2…z2	x3,y3….z3

If the consumer expects a product P, let us assume his/her preference has following attributes

The combination of P changes continuously with the time. To keep P at consumer preferred stage; it is required to identify the dynamic P attributes preferred by consumer. So capturing the basic values on which consumer makes his/her preference is essential for every company. With comparative competitor product analysis a company can predict the preferred attributes of the consumer. This can be done by paired comparative analysis using some of the optimizing tools like genetic algorithm. These combinations and permutations are tested with consumers periodically to keep pace with the market.

A simple method is given below to analyze a company’s product /service with its competitors. In this method the dynamic consumer behavioral patterns are captured by both online and offline research methods and stored in DR (data repository). Effective data mining tool is used to dig out refined data from the DR and fed to DMR dynamic marketing research process. With the refined data the DMR makes comparative analysis with the competitors’ product/ service attributes. The products/ services are modified with optimized attributes according to the customer preference.

The rapid radical changes happening in the field of technology create opportunities and also it has become a real challenge to marketers to use it effectively. Many companies are investing a huge amount in the technology tools and applications without having a pre-defined quantified objective. Thus the ROI of these investments brings negative returns. Identifying the suitable technology platform and solution helps companies reap the expected benefits. Top management commitment in effective change management is top priority in implementing technology solutions to reach customers in an organization. Keeping pace with technological changes helps marketers identify the opportunities and the problems in the dynamic market.

Competition in the market propels the companies to expect minimum profitable returns on marketing investments. The resource constraints force the companies to optimize their resources. Monitoring and controlling the marketing expenses will identify new channels where the resources can be effectively deployed. Taking leverage on internal resources, both capital goods and human capital, makes the company operate at threshold level in the stiff competitive environment.

EMOTIONAL BONDING WITH THE CONSUMERS AND INCREASED SOCIETAL MARKETING ACTIVITIES

Building a brand based on functional benefits is gone with the wind because the manufacturing and technology have become a common platform for each player. The differentiation of products and services are now based on emotional values. Brands compete with each other to occupy space in the mind of the consumer. Any brand that touches the emotional chord will live for a considerable period of time. Here again I like to recall Dr. Herman’s view on short-term brands, which focuses on creating a brand that brings value for shareholders but has a shorter life span. This may look like deviating from the principle of brand management which states that brand is eternal element. But short term brand concept has become the rule of the game in the dynamic world of marketing. A brand built with emotional values will try to extend the life of the brand. Incorporating the appropriate degree of emotions (the level of emotion that will have impact on the consumer’s decision) to the brand depends on the category of the product and the deep consumer insight on the product/service. The success of building emotional brand lies in the creative segmentation of the product which captures the building blocks of its target group. Irrelevant emotional values attached to the product or service, deviate consumer attention even though the functional values are well given.

Increasing the organizational participation in the social activities creates a positive image with its customers. It starts inside the organization and expands across its boundaries. The three important social issues, that consumers perceive that every organization should have a concern for, are environment, education and healthcare. Most of the organizations participate whenever natural calamities occur in the region where they operate and win the customer’s heart. MNCs should respect and embrace the cultural and traditional values of the countries they operate in. Adding local flavor to their product and services creates a local friendly image with the consumers.

The customer centric approach should be accompanied with the employee centric approach because a happy employee makes customers happy. Today an organization can be equipped with uniform capital goods but the right human resource mix has become the differentiating factor for an organization. Accountability with freedom to operate would be the right platform to retain employee loyalty. Defining the role and responsibilities of the employees may help an organization operate effectively but to be efficient the organization should understand the emotional quotient of its employees. The role of leadership is important in nurturing employee values. Keith Ayers has emphasized five skills that a leader should possess such as building trust, mentoring, inclusion, alignment and team development. The companies engaged in corporate branding can attract talent and retain the existing talent. Thus the human resource forms the real asset of an organization

The dynamic nature of consumer behavior is the real challenge to today’s marketers. Understanding the root cause of these changes and keeping pace with the consumer will help the marketers survive in the face of the stiff competition prevalent in the world. Analyzing non-demographic factors that influence the psychographic factors forms the basis for capturing consumer insights. Instead of rapid new product introduction, marketers can concentrate on bridging the gap between consumer expectation and existing product /service offering. Optimizing resources would make the financial returns on marketing investment positive. Today consumers are given the option to choose among brands with similar functional values. Thus incorporating emotional values will secure a mind share of the consumers. The employee, being the internal customer of the organization, plays an important role in delivering the organizational values to the external customer. Ensuring employee welfare will enhance the customer centric approach of an organization.

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M.Thirulogachander holds a Masters in Business Administration (Marketing and Finance) from the College of Engineering, Guindy, – Anna University, Chennai. He also completed his Bachelor’s degree in Engineering from Anna University. He has an industry experience of 2 years as a Marketing Executive. He joined IBS Research Center as a Research Associate in year 2005 and is working on development of derivative books and case studies. His areas of interest are Branding, Strategy and Innovation. He can be reached at krishchander@yahoo.com