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Abstract:
This research is on the importance of customers. This research aims to discuss and to find out
about the benefits, roles and challenges customers. This research is relevant as it will try to
explore the benefit and the importance of customer management and customer
relation.Consumers are individuals who buy products and services for personal consumption.
Sometimes it is difficult to classify a product as either a consumer or organizational good
(Moller, 2001). According to Kotler (1985) stated that a consumer market consists of all the
individuals and households who buy or acquire goods and services for personal consumption.
Customers or consumers vary tremendously in their ages, income, educational, levels, mobility
patterns, and tastes. Marketers have found it worthwhile to distinguish different groups and
develop products and service tailored to their particular needs. If a market segment is large
enough, some companies may set up special marketing programs to serve this market (Robbins
and Coulter, 2012). In order to understand the importance of the customers in this modern era it
is vital and cardinal to differentiate between the two groups of external and internal customers.
According to Needham and Dransfield (1999) External customers are customers who are not
directly connected to the organization and on the other hand an internal customer is a customer
who is directly connected to the organization such as the stakeholders, employees, shareholders,
but the definition also encompasses creditors and external regulators. The notion of an internal
customer, before the introduction of which external customers were, simply, customers — was
popularized by quality management writer Joseph M. juran, who introduced it in the fourth
edition of his Handbook (Juran, 1988).
The paradigm shift of doing business is the recognition of the importance of customers which is
the best phenomenal to any organization in whatever sector it is operating or belongs (Paul et
al, 2009 Cited Vilko 2012). On the other side Mullins (2010) argues that it is next to impossible
without outsourcing funds in today’s highly changing economic situation of doing business were
organizations depend on the availability of customers to purchase or use their services which
has led to reduce on the cost of production and operational cost of doing business. The
importance of customers to any organization can be analyzed along several dimensions.
Whether consumers purchase a product frequently depends upon the rate of their consumption
of the product (Surridge, 2003).
INTRODUCTION
A motivated customer is ready to act. How the motivated customer decides to act is influenced
by his or her perception of the situation. Two people in the same motivated state and objective
situation may act quite differently because they perceive the situation differently (Wright and
Goldstucker, 1999). For example, Benjamin musumali might see a fast talking camera
salesperson as pushy, insincere, and aggressive and another camera buyer might see the same
salesperson as intelligent, helpful, and articulate.
According to Moller and Doviak (2003) noted that people are exposed to a tremendous number
of stimuli of decision making every moment of their lives. Consider the decision making that
comes from various forms of advertising; people may be exposed to over 1,500 ads a day. It is
impossible for a consumer to attend to all of the stimuli; most of the stimuli will be screened out.
The real challenge is to explain which decision making stimuli will be screened out (Surridge,
2003).
On the other side Kotler (1985) noted that selective exposure means that marketers have to work
especially hard to gain the attention of customers in the marketplace. He further stated that their
message will be lost on most people who are not in the market for the product. Even customers
who are in the market may not notice a message unless it stands out from the surrounding sea of
decision making process.
The consumer market is the ultimate market for which economic activities are organized. It
consists of the whole population, and it is important for the marketer to research age distribution,
family formation, incomes, educational levels, mobility patterns, and tastes (Allen and
Fjermestad, 2001). The consumer market buys objects that can be classified according to their
tangibility (durables, nondurables, and services) and According to Ahuja (2012) noted how the
consumers go about buying them (convenience, shopping, and specialty goods). The timing of
consumer purchases decision is influenced by various parties playing various roles (initiator,
influencer, decider, buyer, and user).
According to Krugman and Obstfeld (2012) the objectives of consumers are to satisfy a variety
of needs-physiological, safety, belongingness, status, and self-actualization. The consumer is not
always fully conscious of the needs that are driving his or her behavior. The buying situation
itself can vary from one of reutilized response behavior to limited problem solving to extensive
problem solving.
Buying is not a single act but a multi-component decision on the need class, generic class,
product class, product form, brand, vendor, quantity, timing, and method of payment. With each
decision component, the buyer starts with an initial evoked set that gets narrowed down. The
buyer goes through a process consisting of need arousal, information search, evaluation
behavior, purchase decision, and post purchase feelings (Robbins and Coulter, 2012).
WHY ARE CUSTOMERS SO IMPORTANT?
Almost with exception, companies are facing unprecedented competitive pressure. In some cases
for example the financial sector is this is further compounded by constant regulatory change. A
potent combination of micro and macro-economic conditions; the geographical transparency and
increased reach offered by e-business, mergers and acquisitions, competitor activity and
localized market conditions are stretching customers facing staff and processes to the limit
Harvard business review, October-December (2012). The following are the reasons why
customers are so important?
CUSTOMERS ACT AS A LINK IN THE DEVELOPMENT OF NEW PRODUCTS
According to Krugman and Obstfeld (2012) new product development means investing
something new. In reality, althrogh, most new products are modifications of existing products or
ideas. Sometimes, adding an element of service onto an existing product is also referred to as
new product development. The power of new product development lies in the potential for your
business to meet customer need more closely than competition. Involving customers in
facilitating a design that meets customer’s needs, this involvement also strengthens relationship
with customers, increases their loyalty, and provides a service that is mutually beneficial
(Robbins and Coulter, 2012).
On the other hand Baye (2010) Argued that there are also risks to consider in letting customers
evaluate new product before launch. He further stated that first, the customers may be extremely
disappointed with the product if quality issue is one that you can control if a product is not ready,
it should not be supplied to customers in any forms. Despite this risk, Mullins (2010) on the
other hand evaluated that the advantages of involving customers typically outweighs the risks, so
evaluation of such a program is worthwhile.
AVALILBILTY OF CUSTOMERS WILL HELP COMPANIES TO COLLECT AND
ANALYZES DATA ON MARKETS AND CONSUMERS BEHAVIOUR.
According to the Harvard business review, July-September (1996),”stated that for a business to
succeed, the product or service it provides must be known in the community and have
communication with its customers readily available, the company needs at least marketing
strategies to create product or service awareness”. From the above it is noted that without
marketing Apple incorporation company potential customers may never be aware of its business
offerings and it business may not be given the opportunity to progress and succeed. If the Apple
incorporation company use marketing to promote its products, services and company provides it
with business with a chance of being discovered by prospective customers.
CUSTOMERS ENCOURAGES PLANNING AND TARGET SETTING AND THE USE
OF A MORE SCIENTIFIC APPROACH TO MANAGEMENT AND DECISION
MAKING.
Chartered Institute Of Marketing (2009) although planning and target setting is hugely
important for a business to succeed; it can also be very expensive. For example a Toyota motors
in its first year, a company might spend as much as half of its sales on marketing programs to
attract different customers. After the first year, a marketing budget can reach as much as 30
percent sometimes more, of the annual sales. A marketing program that gives the Toyota
company the best chance is healthy mix of different forms of attracting potential customers, such
as website development,public,relations,print and broadcast advertising, design and printing for
all print materials, trade shows and other special events (Needham and Dransfield,1992).
CUSTOMER AVAILIBILITY HELPS IN IMPROVING THE BRAND LOYALTY OF
THE COMPANY
According to Bean Hussy (1997) defined brad loyalty as when a customer chooses to repeatedly
purchase a product produced by a competitor. For example, some customers will always buy
Toyota corolla made in Japan, while other people will always purchase BMW made in German.
Apart from brand loyalty, Customer availability plus marketing will also build the brand image
of the company as well as foreign investors who would like to invest in Japan particularly in
Toyota motors hence bring more revenue to the country, more exposure, economy growth of the
country and job creation.
HIGHLY PRESENCE OF CUSTOMER IN A MARKET BRINGS ABOUT HEALTHY
COMPETITION
As Page and Handyman (1996) stated consumer market also fosters an environment in the
market place for healthy competition. Marketing efforts gets the world out on pricing of products
and service, which not only reaches the intended consumers, but also reaches other companies
competing for the consumers business.
On the other hand Moller (2001) noticed that companies that have a monopoly on products and
service that can charge almost only price, customers helps in keeping pricing competitive for a
business to try to win over a given market share before its competitors does. Without
competition, Apple Incorporation Company would continue to sell while lesser known
companies or new companies would stand little chance of ever becoming successful. Availability
of customers facilitates the healthy competition that allows small businesses and new businesses
to be successful enter and grow in the market place (Brue and Shorow, 2002).
IMPROVES COMPANY REPUTATION THROUGH CUSTOMER SERVICES
The success of a company often rests on a solid reputation. According to Krugman and Wells
(2012) Customer services builds brand name recognition or product recall with a company.
When a company reaches the high expectations of the public, its reputation stands on firmer
ground and hence customers increase their trust through high purchasing power. As your
reputation grows, the business expands and sales increase. The reputation of your company is
built through active participation in community programs, effective communication externally
and externally and quality products or services, which are created or supported by marketing
efforts to bring back old and new customers (Surridge, 2003).
CUSTOMER HELPS TO BOOST RELATIONSHIP WITH MANAGEMENT
As Milton (2001) noted that business is not just about keeping your customers satisfied and
making profits; it will allow the Toyota motors to attract customers with speed, accuracy,
availability, creativity and flexibility. According to Krugman and Obstfeld (2012) stated that in
today's ever changing business and technology environment, customer relationship management
is more crucial than ever ultimately affirms ability to compete, survive and profit may depend on
it. The subject of customer satisfaction with respect to Toyota Motors Company is dynamic and
evolving. Every year there seems to be a new conceptual strategic or operational innovation
within the field. The nature and direction of modern consumer markets has changed over the last
20 years (Kotler, 1985).
CUSTOMERS CONTRIBUTE TO THE GROWTH OF THE ECONOMY
According Frank and Bernanke (2010) the primary measure of the economy’s performance is its
annual total output of goods and services or, as it called, its aggregate output. Aggregate output
is labeled gross domestic product (GDP): the total market value of all final goods and services
produced in a given year. Consumers spend most of their disposable income (DI) on consumer
goods and services. He further stated that high expenditure on imports and export increase the
aggregate demand (AD) hence contributing to the economic growth. On the other hand Ahuja
(2010) argued by noted that if customers particularly the consumers of foreign goods at the
expense of local goods will not impact positive growth but negative growth will emerge hence
pulling the economy down, because high spending on import will result into a budget deficit and
high export on local goods will result into a budget surplus.
CUSTOMERS MARKET AVAILABILITY HAS CONTRIBUTED IN DEVELOPMENT
OF FOREIGN DIRECT INVESTMENT.
A foreign direct investment (FDI) is a controlling ownership in a business enterprise in one
country by an entity based in another country (Milton, 2001). He further stated that broadly,
foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting
profits earned from overseas operations and intra company loans". In a narrow sense, foreign
direct investment refers just too building new facilities. Therefore, the availability of huge
consumer market is the major determinant of investment in a given country and also act as an
employment opportunity to business oriented customers.
THE GENERAL DISADVANTAGES OF HAVING CUSTOMERS
According to Bean Hussy (1997) Customer relationship management is a strategy that allows
sales and marketing professionals to record, access, and track information related to customers
and potential clients. This strategy normally requires use of computer programs that allow users
to keep records that can help professionals to determine how to sell and market to new clients
and how to satisfy current customers. Proponents of customer relationship management believe
that is a more cost effective way for service and retail professionals to increase profitability
(Robbins and Coulter, 2012).
A customer relationship management system that is incorrectly implemented can also cause
problems for a business (Surridge, 2003).If an executive decides to implement this kind of
system, for instance, but does not include all departments, the information generated by can be
inaccurate. Some opponents point to other disadvantages of customer relationship management,
such as the depersonalization of sales processes, the difficulties of implementing these systems
into preexisting business systems, and the comparatively time consuming tasks associated with
retrieving and recording data.
One of the most commonly cited advantages of customer relationship management is that it helps
organizations cut costs and become more efficient (Kolter 1985 cited in Tabassi,2011).
Detractors, however, believe that the opposite is true. The amount of time it can take for
professionals to access and record data is thought by some to be greater than the time it takes to
use conventional filing methods. Other detractors point to the time and money required to train
employees to use new software (Taylor, 2005 &2007).
GENERAL RECOMMENDATIONS
Against a mixed pattern of importance of customers, businesses have strived to perform
according to the objectives that created for. However, much more requires to be done to sustain
the path of development in customer relations and behiour that has since been embarked on. The
following are suggested recommendation that could improve the customer’s oriented businesses,
firms, organizations;
Firstly, Increase motivation among workers who serve customers, according to Oloniyan and Ojo
(2008) motivation helps the workers improve performance which in the long run promotes
employees confidence at work and which will result in customer satisfaction. Therefore when it
comes to work, most workers can only do what they want to do or do that are motivated to do.
Secondly, cut down on production cost and reduced on prices in order to attract potential
customers, it should be noted that production stated with information technology and it has
evolved to the white collar realm of companies Weimer et al (2009).the transformation of
businesses has been due to globalization and in effort to cut down on production costs.
HOW MARKETERS GO ABOUT UNDERSTANDING THE CUSTOMER/CONSUMER
DECISION-MAKING PROCESS
According to Page and Handyman (1996) stated that the final step in attempting to understand
how consumers buy is to map the actual stages they pass through to reach their buying decision.
Each stage suggests certain things that marketers can do to facilitate or to influence the
consumer’s decision. A sample of consumers can be asked to describe when they first felt a
desire for the product, how they gathered information, what problems they tried to resolve, how
they made their final choice, and how they felt afterwards.
According to Kotler (1985) noted that consumers, of course, vary in the way they buy any given
object. In buying an automobile, for example, some consumers will spend a great deal of time
seeking information and making comparisons.
Therefore, how can marketers identify the typical stages in the decision process for any given
product? According to Mullins (2010) they can introspect about their own behavior, although
this is of limited usefulness (introspective method). He also noted that they can interview a small
sample of recent purchasers, asking them to recall the events leading to the purchase of the
product (retrospective method). They can find some consumers who are contemplating buying
the product and ask them to think out loud about how they would go through the buying process
(prospective method). Or they can ask a group of consumers to describe the ideal way for people
to go about buying the product (prescriptive method). Each method result in a consumer
generated report of the steps in the buying process.
FIVE STAGES MODEL OF THE CONSUMER DECISION MAKING PROCESS THAT
MARKETERS NEED TO KNOW
NEED AROUSAL
The decision process starts with need arousal (Stone, 1962). A need can be activated through
internal or external stimuli (Wright and Goldstucker, 1999). In the first case, one of the person’s
normal needs hunger, thirst, sex-rises to a threshold level and becomes a drive. The person has
learned how to cope with this drive from previous experience and is motivated toward a class of
objects that he or she knows will satisfy this drive. According Chartered Institute Of
Marketing (2009) stated that a need can be aroused by an external stimulus, or triggering cue.
The marketing significance of the need arousal stage is twofold. First, the marketer must
understand the drives that might actually or potentially connect to the product class and brand.
An auto marketer recognizes that cars satisfy a need for mobility; cars also can satisfy the need
for status, power, and excitement. To the extent that a car can satisfy several drives
simultaneously, it becomes a more intensely wanted object (Surridge, 2003).
Second, the concept of need arousal helps the marketer recognize that need levels for the product
fluctuate over time and are triggered by different cues. The marketer can arrange cues to conform
better to the natural rhythms and timing of need arousal (Moller and Doviak 2003).
INFORMATION SEARCH
According to Stone (1962) stated that if an aroused need is intense and well defined gratification
object is near at hand, the person is likely to gratify the need right then. On the other hand Frank
and Bernanke (2010) said that, the hungry person who sees a candy bar will probably buy it and
consume it immediately. Brue and Shorow (2002) opted that the key interest to the marketer are
the various information source that the consumer will turn to and the relative influence they will
have on choice behavior. According Chartered Institute Of Marketing (2009) consumer
information sources fall into four groups:
1. Personal sources (family, friends, neighbors, acquaintances)
2. Commercial sources (advertising, salesman, dealers, packaging, displays)
3. Public sources (mass media, consumer rating organizations)
4. Experiential sources (handling, examining, using the product)
The relative influence of these information sources varies with the product category and the
consumers’ personal characteristics. The marketer will find it worthwhile to study the
consumers’ information sources whenever (1) a substantial percentage of the target market
engages in overt search and (2) the target market shows some stable patterns of using the
respective information sources (Needham and Dransfield, 1992). Identifying the information
sources and their respective roles and importance calls for interviewing consumers and asking
them how they happened to hear about the product, what sources of information had. The
marketer can use the findings to plan commercial communication and stimulate favorable word
of mouth.
EVALUATION BEHAVIOR
According to Baye (2010) certain basic concept help in understanding consumer evaluation
processes. The first concept is that of a product attributes. He further noted that consumers see
products as multi-attributes objects. A particular product is perceived in terms of where it stands
on a set of attributes that are relevant to that product class. Second, the consumer is likely to
attach different importance weights to the relevant attributes. According to Krugman and Wells
(2012) salient attributes are those that come to the consumers’ mind when asked about the
attributes that will be considered. The marketer must not conclude that these are necessarily the
most important attributes. Third, the consumer is likely to develop a set of brand beliefs, beliefs
about where each brand stands on each attribute. The set of beliefs held about a particular brand
is known as the brand image. Fourth, the consumer is assumed to have a utility function for each
attribute. The utility function describes how the consumer expects product satisfaction to vary
with alternative level of each attributes. Fifth, the consumer arrives at an attitude (judgment,
preference) toward the brand alternatives through some evaluation procedure (Burkett and Sadler
1986).
PURCHASE DECISION
The evaluation stage leads the consumer to form a ranked set of preferences among the
alternative objects in his or her evoked set (Burkett and Sadler 1986).they further noted that, a
consumer will buy the object he or she likes most. But there are a number of additional links
between his or her evaluation behavior and the purchase decision. According to Weetman (2006)
the consumers' evaluations will lead to an intention to purchase one of the objects. At the point,
three additional factors intervene: (1) attitude of others (2) anticipated situational factors (3)
unanticipated situational factors.
As observed by Dave and Rob (1992) the decision of an individual to modify, postpone, or avoid
a purchase decision is heavily influenced by perceived risk. Marketers have devoted a lot of
effort to understand buying behavior as risking taking. Therefore, a consumer develops certain
routines for reducing risk, such as decision avoidance, information gathering from friends, and
preference for national brand names and warranties McConnell and Brue (2002).
POST-PURCHASE FEELINGS
After buying and trying the product, the consumer will experience some level of satisfaction or
dissatisfaction. According to Ally and Bacon (1974) what determines the level of post-purchase
satisfaction? The major theory holds that a consumers' satisfaction is a function of her or his
expectations (E) and the product's perceived performance (P), that is, S= F(E,P) see (John and
Combs, Journal Of Marketing Research, April 1990,pp.20-33). If the product matches up to
expectations, the consumer is satisfied, if it exceeds them, she or he is highly satisfied, if it falls
short, the consumer is dissatisfied. According to Kotler (2010) stated that post-purchase
cognitive dissonance is common among purchasers of homes, automobiles, and major
appliances. He further defined cognitive dissonance means there is a lack of harmony in the
buyer’s various cognitions about purchased product and the foregone alternative. Marketers try
to help buyers feels good about their purchase choice. A disappointed buyer may not only stop
buying but sold bad mouth the product to others (Moller, 2001).
FIVE STAGE MODEL OF DECISION MAKING BY CONSUMERS: SOURCE:
HARVARD BUSSINESS REVIEW, MAY-JUNE 2001, PP.53-54.