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  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
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  • Number of pages: 2

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Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (AMA, 2013). Marketers have the ability to create wants and needs in society by adding value to products and services and engaging customers in the market, in most cases to maximise profit. Therefore, marketers also in part become responsible for an organisations success or failure, as it is through effective marketing that revenue can be earned and demand for products or services can be created and increased. In order for this to be achieved, the importance of customer value and the impact it has on marketing practices and decisions must be considered. Through both quantitative and qualitative research, marketers must create value for the customer, which from their perspective, is what they "get" (benefits) relative to what they have to "give up" (costs or sacrifices) (Zeithaml 1988, in Smith & Colgate 2007). Customers are far more likely to purchase a product or service in which they see an increase in value to their lives, despite the cost, and so marketing techniques are utilised to achieve such outcomes. This demonstrates the strong and unavoidable link between marketing and customer value.

Leventhal (2005) believes in order to achieve a true market orientation, a company needs to make the customer the epicentre of its business perspective. With this in mind, marketing is crucial to an organisations success, as it can give a true understanding of its place in the market and its customers. This requires both internal and external assessment of the business, as well as in depth marketing research. Quantitative marketing research such as surveys or experiments allows an organisation to collect and analyse data on a more statistical and numerical measure, while qualitative marketing research provides more indepth analysis, however on a smaller scale, through focus groups and depth interviews. Though these marketing research strategies differ, they are both important in developing an understanding of the customer, which allows an organisation to attempt to provide the most value in a product or service. An example of an organisation that prioritises its customers in order to be successful and profitable is Oh! So Good Foods, a Melbourne based organisation who specialise in treats made from all natural ingredients, low in sugars, high in protein and gluten free. Since opening their business in September of 2016, owners Simone Hawkerkamp and David Rafferton have been growing their business through trialling new products to their growing customer base. Their marketing strategy has definitely taken a customer-first approach, as they have been able to expand their range through product trials at their market stalls, such as the new Oh! So Good Granola range, after it recieved positive reviews and sold out when first taken to market.

Many businesses, however, have not placed enough emphasis on measuring the impact of customer relationships (Rasul 2018). In order for an organisation to be profitable, marketers must expose the customer to the value they can offer, through not only their own innovation and marketing techniques but by assessing the needs and wants of the target market and servicing such needs, to create demand for their product or service. Oh! So Good Foods have implemented this attitude in regard to their marketing strategy, allowing them to broaden their product range by utilising the opinions and demographics of their customer base. Further, such strong customer relationships creates loyalty to a business and its products or services, as they become associated with positive experiences, proving another aspect of success marketing can bring to an organisation, whether intentional or not, as a customer's perceptions of your company play an important role in determining the success of your marketing efforts (Leventhal 2005). Ultimately, marketing allows a business to create a focus around its customer, know its competition, and what their strengths and weaknesses are, and coordinate all marketing efforts with other functions within the organization (Leventhal 2005), therefore proving invaluable in an organisation and its ability to make a profit or achieve its objectives.

Similarly, the importance of customer value cannot be forgotten in an organisation. Customer value can be defined as value for the customer (customer perceived value or customer received value) and value for the firm (value of the customer, now more commonly referred to as customer lifetime value) (Woodall 2003, in Colgate & Smith 2007). Though the importance of customer value is clear in marketing, there are varying beliefs on the matter, and no definitive framework in which customer value can be measured. Park, Jawarski, and MacInnis (1986) argue that it is functional needs, symbolic needs, and experiential needs that drive a customer to engage in the market, and therefore can be representative of the framework of customer value. Alternatively, Ulaga (2003) identifies eight categories of value in business relationships-product quality, delivery, time to market, direct product costs (price), process costs, personal interaction, supplier know-how, and service support. This framework is fairly in depth and detailed in comparison to Park, Jawarski and MacInnis, however ultimately both ideas stem from the same concept of putting the customer first and identifying where in their organisation they can create a demand in the market in reflection of what the consumer wants, and what will get them to choose their product or service. In order to understand what their customers valued, the owners of Oh! So Good Food's initially tested their products on a small group of family friends, and after positive reviews, they opened a local market stall, where their 'Pruffle's' product became so successful, that they are now stocked in over 100 cafes across Melbourne. They have continued to expand their business using the same method of trialling products on their existing customers, allowing them to come to beneficial decisions for the success and profitability of their business. This demonstrates the importance of customer value in launching and sustaining a product, as the success rides upon the value of the product and the demand in the market. When it comes to the value of the product, what is important for marketers to consider is not to create what he or she thinks is value to the customer but what the customer will perceive as value (Kotler 2017). This encapsulated the whole idea of customer value, as the objective is to create and present value to those within the market, who have the potential to purchase a product or service, and therefore have the ability to make an organisation successful and profitable or not, based upon the value that the customer believes to be gaining.

Though the importance of marketing and customer value are especially important in marketing, it is understanding the relationship between the two that is most critical to an organisations long term success. This is because in order to have a successful marketing strategy, which is most likely to produce positive results, a thorough understanding of the market, customers and potential customers, and what value they see in the product or service being marketed, in necessary. Leventhal (2005) argues that to be effective as a marketer today you must be able to acquire and maintain good prospect and customer data. This demonstrates the strong link between marketing and customer value, as it is a full circle idea in which marketers gain information and data from the people, to produce and present a product or service for the people. Without this connection in mind, an organisation may not be as successful, as it does not have the necessary information and insight into its target market or consumers, therefore its marketing campaigns and strategies as well as the value of the product or service itself may not fulfil the wants and needs of the customer, despite having the potential to do so. Oh! So Good Food's marketing through their Facebook page is largely directed at its wholesale customers, as this is where the majority of their sales occur. Due to the companies pre existing knowledge on its target market they have the ability to focus their marketing to portray value to its wholesale customers. This approach highlights the necessity of knowing your consumers and where they will see value, in the objective of achieving effective marketing.

When it comes to organisations, one of, if not the most important aspect to consider in becoming profitable and successful is relevant and effective marketing. In order to achieve such marketing, the importance of customer value must not be discredited. Having a strong relationship between these two ideas allows organisations to succeed, as they have knowledge of their competitions strengths and weaknesses, how to coordinate their organisations operations around their marketing strategy, and most importantly, they have an understanding of their customers, and can then make informed decisions in providing value within their product or service. If the importance of marketing is not taken seriously, or the link it has with customer value, an organisation is hindering itself from potential success in the future.

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