Why Customer Participation Matters Marketing Strategy Analysis & Solution

Marketing & Sales Case Study Analysis and Solution

At Fern Fort University, we use Harvard Business Review (HBR) marketing principles and framework to analyze Why Customer Participation Matters case study. Why Customer Participation Matters is a Harvard Business Review case study written by Omar Merlo, Andreas B. Eisingerich, Seigyoung Auhfor the students of Sales & Marketing. The case study also include other relevant topics and learning material on –

Strategic Marketing Analysis of Why Customer Participation Matters case study written by Omar Merlo, Andreas B. Eisingerich, Seigyoung Auh will comprise following sections –

  • Why Customer Participation Matters Case Description
  • Marketing Definition
  • Market Potential Analysis of Why Customer Participation Matters
  • Market Share Potential Analysis
  • Segmentation and Segment Attractiveness Analysis
  • Competition and Competitiveness Analysis of Why Customer Participation Matters
  • Customer Value Analysis of Why Customer Participation Matters case study

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Why Customer Participation Matters Marketing Case Description

Sales & Marketing Case Study | Authors :: Omar Merlo, Andreas B. Eisingerich, Seigyoung Auh

This is an MIT Sloan Management Review article. Most managers know that listening to customers makes good business sense. Businesses have much to gain from actively seeking and encouraging customer participation, which the authors define as getting customers to provide constructive suggestions and share their ideas on how to shape product and service offerings. Yet many companies only pay lip service to this idea.Rather than encouraging customers to share their views about the company and its products with managers, the authors found, companies tend to focus on encouraging customers to take part in spreading positive word of mouth. Yet word of mouth is only one type of voluntary behavior that customers engage in. Moreover, it indicates only what people on the outside are saying, not how companies can improve their offerings or what customers may be looking for. The authors, who conducted surveys of customers as well as interviews and roundtable discussions with senior executives in a variety of industries, found that both customer word of mouth and customer- to-business interactions are associated with a customer's propensity to buy more of a company's products and services. While not all satisfied customers become repeat buyers, encouraging them to provide feedback and suggestions helps tie them more closely to the business. Companies can even recapture defecting customers simply by contacting them and encouraging them to participate. In addition, customer-to-business interaction is often more malleable than customer-to-customer word of mouth and more readily within the control of management. In a study of customers of a global bank, the authors found that customers who purchased the most were individuals who participated and engaged in much word-of-mouth behavior. High participation/ high word-of-mouth customers were the most loyal and attached to the brand; customers who did not participate tended to be the least valuable, the least loyal and the least attached to the organization regardless of whether they spread positive word of mouth. The implications of the findings are that fostering customer participation can be very valuable and that companies are better off emphasizing customer participation over word of mouth (as opposed to the reverse), because it creates more customer "stickiness"(as in greater attachment and commitment). Nevertheless, the authors say, the two approaches should be seen as two sides of a coin, working both internally and externally to build financial value for companies.

Marketing Definition

According to American Marketing Association – Marketing is a set of activities that a firm undertakes for creating, communicating, delivering, & exchanging offerings that have value for customers, clients, partners, and society at large.

Kotler explains - Marketing is a process by which organizations can create value for its potential and current customers and build strong customer relationships in order to capture value in return.

Market Potential Analysis of Why Customer Participation Matters

Market potential analysis comprises evaluating the overall market size of the related product that the firm is planning to launch. This will involve defining – Why the target market segment needs the product and how it will provide a solution to full its consumers’ needs. Market potential of Why Customer Participation Matters products various on factors such as –

  • Maturity of the market. In mature markets the profitability is often stable but the market potential is less as most of the players have already taken market share based on the segment they are serving. New players have to go for market share strategies in marketing.
  • Technological competence of the existing players and culture of innovation and development in the industry.
  • Untapped market sizes and barriers to both enter the market and serving the customers. Often companies can easily see the unfulfilled needs in the markets but they are difficult to serve as there are costly barriers.
  • Define the core need that your product is serving and list out all the direct and indirect competitors in the market place. This will help not only in positioning of the product but also in defining or creating a segment better.
  • Uncovering the current and untapped market sizes and barriers to serving the larger market. Analyze the areas that you need to sort out while launching the products to wider market and what are the challenges the firm will face in market place.
  • Estimate the current stage in product life cycle and its implications for marketing decisions for the product.

Market Share Potential Analysis

  • Understanding the buyer behavior model for Why Customer Participation Mattersindustry.
  • Identifying the market share drivers relevant to Why Customer Participation Matters market.
  • Segment Attractiveness Analysis – Our analysis will work out which are the most attractive segments and which are the one the firm should go ahead and target. We point out in great detail which segments will be most lucrative for the company to enter.
  • Understanding the different needs and relative value of your offering by segment.
  • Developing segment priorities and positioning the product based on the product need fit developed by the firm.

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Competition & Competitive Position Analysis

  • Uncovering customer-based competitive positions for key rivals and firm’s offering. This will not only help in assessing the strengths and weaknesses of the competitors but also help in defining and positioning of the product.
  • Developing a positioning and launching strategy. It will require not only distribution channel analysis but also promotion mix for the product.
  • Strategic Marketing Planning — the process of developing and maintaining a strategic fit between the organization’s objectives and capabilities and the ever evolving marketing opportunities for its products.

Why Customer Participation Matters - Customer Value Analysis

Capturing customer value is essential to marketing efforts as it results in higher return in the form of both current & future sales, greater market share, and higher profits. By creating superior customer value, the organization can create highly satisfied customers who stay loyal and buy more. This, in turn, means greater long-run returns for the firm.

  • The crucial role of customer perceived value in acquiring and retaining profitable customers. Product differentiation is often based on building on a value niche that a firm believes that is very important to the customer. This niche contributes to perceived value. If the perceived value is high then customer stay loyal to the product if not then she can switch to the competitor’s product.
  • Graphically displaying value differences for deeper understanding and better internal communication. This helps is building a narrative that a customer can identify with. The better the insight more are the chances of connecting with the potential customers.
  • Identifying and selecting actionable value creation options. This can help in increasing the customer lifetime value. Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.

NOTE: Every marketing case study solution varies based on the details and data provided in the case. We write unique marketing strategy case solution for each HBR case study with no plagiarism. The specific case dictate the exact format for the case study analysis.

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