Marketing environment is constantly changing over time. A famous marketer Philip Kotler (2003, cited in Taupau and Boscor, 2011, p.51) once insisted that a successful company should focus on its products and profits. But now, marketers tend to regard satisfying customer needs as one of the key elements of achieving success under contemporary marketing environment where is filled with fierce competition. This indicates that many firms nowadays always attempt to identify customer needs and concentrate its production and strategies on customer demand in order to survive in the market. This essay will firstly clarify the reasons behind the trend, which is followed by discussing the merits and demerits of an organization put an emphasis on current demand of their customers through analyzing Tesco’s customer-oriented marketing strategy, and finally ascertain future challenges for such organizations.
There are mainly two reasons behind the fact that a growing number of companies choose to become customer-oriented rather than product-oriented or profit-oriented. First, with the increasingly intensive competition, it is necessary for companies to ensure durable competitive strengths in the market. According to Talpau and Boscor, customers are the heart of companies’ marketing strategy (Talpau, A., and Boscor, D., 2011, p.51). In other words, if a company can retain existing customers while gaining new customers, it will be a competitive edge of this company. Moreover, these days customers have become much more empowered due to the fierce market competition. Therefore, it is vital for companies to meet the expectations of customers in order to attract and retain them which helps companies take over more market shares.
Tesco, founded in 1919, is now considered as one of the multinational giant retailers in the world. It’s also a leader in the grocery market in Britain. At first, Tesco was not customer-focused but was more focused on providing products with lower price through introducing trading stamps which were collected by customers from their purchase and can be used to converted into cash or presents in certain amount (Rabb, G., Ajami, R., Gargeya, V. and Goddard, G., 2012, p.173). After that, in the 1980s, Tesco expanded the scale of its products and customers by switching from being price-oriented to quality-oriented and service-oriented. However, plenty of competitors were utilizing a low-price go-to-market plan in the 90s. So as to cope with the challenge, Tesco came up with new price-focused product lines ‘Value Lines’ which stands for high-quality products with reasonable price (Rabb, G., Ajami, R., Gargeya, V. and Goddard, G., 2012, p.174). Additionally, in 1995, Tesco realized that customers were the future of marketing which was seen as the beginning of its transformation towards a customer-oriented company. As a result, it decided to introduce membership card named ‘Clubcard’ which was undoubtedly a breakthrough in grocery retailing industry at that time. By implementing this strategy, Tesco successfully acquired customer loyalty and was able to recognize the needs and wants of their customers. Later, with the development of E-commerce, Tesco launched online shopping service to meet the demand of customers who thought online shopping was more convenient. Soon Tesco became ‘the only grocery retailer who could gain profits through online shopping’ (Walker, G., 2006). Due to the everlasting change in customers’ needs, as a customer-focused company to stay in leading position, Tesco has always been making efforts on adjusting its products and services from time to time. For instance, to improve its customer service, ‘Tesco sent 65,000 various kinds of personalized letters to over 8 million customers in order to make them feel served individually’ (Rabb, G., Ajami, R., Gargeya, V. and Goddard, G., 2012, p.181). This customer mailing service is indeed an efficient way which leads to the growing number of loyal...
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