Using Mobile Devices in the Retail Store by Suri Weisfeld-Spolter * [10]

Use of mobile devices has become commonplace for contemporary retail shoppers.  At their fingertips, consumers can easily obtain lots of information to aid their shopping efforts and decisions. This phenomenon has been a challenge for some marketers; for others, a benefit.  For instance, brick-and-mortar retailers have announced store closings (e.g., Macy’s in 2016 and early 2017), dissolution (e.g., Limited’s elimination of its store format in 2016 ), or corporate layoffs (e.g., WalMart in 2017), as their financial metrics are upended through e-commerce. At the same time, e-tailers have parlayed their technological competencies to embrace technologically-savvy buyers. Witness Alibaba’s acute aspirations to become a worldwide e-marketer and Amazon’s tremendous expansion of the breadth and depth of its offerings as well as recent establishment of its own global delivery service.

Retail salespeople have traditionally been providers of information for customers. Indeed, until the advent and enormous growth of the internet and e-commerce, sales personnel tended to be the primary purveyors of information in selling.  As noted above, however, the retailing dynamic has changed markedly. Many retail customers now turn increasingly to marshaling information from alternative sources—particularly from mobile devices. In fact, consumers seem to be replacing traditional retail salesperson functions—such as collecting information, comparing prices, and securing the order—with mobile devices. This situation may well foreshadow a decline in the importance of salespersons in buyer-seller interactions.

Interestingly, a consumer’s mobile device is somewhat similar to retail salesperson input in that it mimics the personal nature of selling. Accordingly, many of today’s consumers tend to consult their smartphone rather than interact with retail sales personnel. Indeed, 73% of shoppers would rather use their phones than deal with the salesperson. 

With increasing consumer preference for mobile devices for both hedonic and utilitarian reasons and avoidance of the retail salesperson, we did a study to explore the consumer’s information search behavior vis-à-vis the salesperson’s selling behavior so as to enhance understanding of how retail salespeople can influence mobile dependent shoppers.

We found that the more searching consumers do on their phones, the more they experience increases in perceived control, which fosters their purchase intention. These findings suggest that retailers should create an environment that facilitates feelings of perceived control because that construct is closely connected to the pathway between search and purchase intention. For example, providing consumers with easy access to free wi-fi in stores is one technique to help create a shopping environment that nurtures mobile phone searching. Retailers might also adopt a selling philosophy that helps consumers in their role as search agents to perceive that they are controlling the interaction with the salesperson (e.g., “Come to our store and be the boss,” “We don’t push you; you are in charge”). Because the mobile phone seems to increase feelings of control, retailers should also assist consumers to stay connected to their phone so that they can continue to search in the store. Furthermore, salespeople should be trained to be search assistants for the customers rather than assume the traditional role of “pushing the sale.” In this context, retail salespeople could assist consumers in their search activities by providing comparison websites, review sites, and alternative search terms. In a similar way, companies can create apps for the mobile phone to engage consumers while in the store, and salespeople can direct them to download these applications. 

* Suri Weisfeld-Spolter, Ph.D., is a Professor of Marketing at Nova Southeastern University. She can be reached at sw887@nova.edu  This post is based on her journal article in Psychology & Marketing titled, “Under the sway of a mobile device during an in-store shopping experience”.

Image Positioning - Differentiate to Communicate Value [9]

[Do what you do so well that they will want to see it again and bring their friends. Walt Disney]

American society is intrigued by image. Consider this related word – imagine. Disney is all about the customer experience and emotionally and magically transports guests to another time or place. Image is often associated with entertainment, fashion, and technology markets. Corporate image is the reputation of an organization viewed by its various stakeholders – investors, employees, customers, business partners, communities, etc. All companies have a singular corporate personality that differentiates them from their rivals. The communication challenge is to manage and enhance the firm’s identity over time.

A perceived image is based on two components: 1) what the company does and says, and 2) what the customers/market say about the organization - this is more important. Companies must manage a strong IMC (integrated marketing communications) program consisting of advertising, selling, sales promotion, online, social media, and public relations activities. Customer-generated content such as Facebook posts, tweets, blogs, and online communities can dramatically impact organizational performance.

Perhaps your company is not a global giant – does image research make sense for you? Consider these seven queries as you revisit your marketing communications strategy: 1) How important is image in your value proposition?, 2)  Should it be even more important?,  3) Does your image clearly resonate with your target market?, 4) How can you get your customers and the market to share more positive messages about your company?, 5) What is your main point of differentiation from your competitors?, 6) Should coolness be a major or minor part of your IMC strategy?, and 7) How can you best tell your business story to communicate value?

This blog post is the 6th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4^th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information contact Art Weinstein at artweinstein9@gmail.com, 954-309-0901, www.artweinstein.com 

A Customer Value Mindset in Asia’s Airlines Business by Michael Santonino * [8]

                      Photos by Michael D. Santonino III/Kim Pei Lu travel photography

Asian airports are transforming the airlines industry by creating value for customers in convenience, availability, and access with a multitude of services. The top airports in the world offer customers a travel experience with a “Disney-like” park feeling as airports display picturesque rainforest waterfalls, lush landscape, open glass designs, cultural artwork, sustainable operations, luxurious amenities, connectivity, and selection of dining and shopping preferences for passengers. Airports (and airlines) are creating value in the Now Economy with Speed, Service, Solutions, Selection, and Sociability (the 5-S model) in many Asian countries (i.e. Singapore, South Korea, Japan, and Hong Kong). 

The United States with its aging airport infrastructure has not been a passenger’s preferred choice in comparison to these Asian countries airports, as many of the service quality performance measures used by the various industry rating agencies exclude the aged US airports. The airlines have equally transformed their businesses with new aircraft, new cabin configurations, and extended ancillary services/fees (baggage, seat upgrades, fast-boarding, in-flight meals, WiFi, cancellation/changes, etc.).

Maximizing Value Attributes in Airport Layouts 

Suvarnabhumi Airport, in (Bangkok) Thailand, offers an excellent example of convenience, accessibility, cultural art, open-glass design, and luxurious amenities. It is strategically designed with seamless passenger movement flow to gates, multiple access points for shopping and tax refunds, and cultural art photo stop points, and is one of the most tourist-friendly airports in the world.

What a Jewel!

The Jewel located at Changi Airport in Singapore is creating value in the Now Economy with airport solutions and product selection for customers. The Jewel has an amazing sustainable architectural design with an integrated nature-themed entertainment park known as the Canopy and a retail mall complex. Value attributes of experience differentiations (product/services that tap into the five human senses) can be found throughout this airport complex with its customer interactive activities (walking trails, explorer slides, water mists, flower garden, and other family-centric fee paid services). 

The Jewel is strategically designed between terminals with seamless passenger movement flow to gates, shopping, dining, scenic photo taking areas, play-stations for kids, and interactive-themed park experiences for visitors, passengers, and local Singaporeans. Changi is ranked the number one airport in Asia and the world for its outstanding customer service. 

Changi Airport provides a mere glimpse of the future with technology and innovation as it relates to products (or services) in the pre-introduction stage of the product life cycle with artificial intelligence (AI), robots, virtual reality (VR), blockchain, and real-time data analytics. Expect fully autonomous aircraft or other global transportation vehicles as the technology evolves.

Creating Value with Technology for Better Passenger Experiences
Airports and airlines are incorporating technology to improve the overall passenger experiences. The use of virtual assistant holograms are being utilized by more airports to help arriving passengers make that transit to the next departure (or arrival hall) a better experience. Airlines are increasingly offering more extra room seating cabins for better comfort, as Air Asia Behad offers “hot seats” (with red headrest seats) for an upgraded fee. Tray tables and cabin bins are prime shelf-space designs for airlines (from the traditional supermarket shelf-space for products) as airlines expose passengers to new routes, tours, and other advertisements to its captive audience. Airlines are transforming cabins with newer aircraft designs that include the blue-red-yellow mood change lighting for improved cabin comfort. Airlines are upgrading the in-flight entertainment (IFE) systems to offer more TV channels, movies, games, and other IFE services for improved in-flight experiences throughout the entire journey.

The Now Economy is dominated by the services sector with an emphasis on creating exceptional customer experiences for the digitally-savvy customers. Sustainability, holistic perspectives, and personalized platforms are value attributes that digital-native customers are sensitive toward the future of airports and airline travel. The airline industry in Asia and worldwide is rapidly changing to build a competitive advantage through flexible production, innovative business models and strategies, hiring the best people, speed-to-market, and collaboration with the right business partners.  

 * Dr. Santonino is Associate Professor, College of Business, Embry-Riddle Aeronautical University Worldwide. Contact him at Michael.Santonino@erau.edu

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Ethnographic Research Uncovers What Customers Value by Herb Brotspies * [7]

Now, more and more marketers are turning to ways to find what customers value—why consumers buy the products they do, how they use them, and importantly, how they relate to products in ways big data or conventional market research surveys cannot.  They are increasingly using techniques used by anthropologists called ethnographic research, studying consumers where they live, where they work, in the kitchen, in the bathroom, in the stores, restaurants, concerts, malls, or college campuses.  This observational method helps marketers by showing how products are used, the meaning of products in their lives, and the lifestyles that influence purchase decisions. 

Ethnography evaluates consumer behavior in detail, identifying important patterns through observation of people engaging in activities such as browsing, buying and trying products, or using services.  Based on ethnographic findings of consumer value, recommendations are made to conduct quantified market research, develop new products, add features to existing products, or change advertising approaches.

Intel, the computer chip maker, uses ethnographic research to understand how teenagers, who grew up with smart phones, use their devices differently than baby boomers, how television and PC technology converge, and how smart phones are taking over most of the functions of personal computers.  J.C. Penney looks in women’s closets to see the brands and styles of clothing they purchase for work.  Clairol, the marketer of hair coloring, watches how women apply hair coloring at home to improve the ease of product use.

5 Ethnographic Case Summaries by Consumer Research Associates

> Abbvie Pharmaceuticals, a marketer of a drug for HIV, wanted to understand the patient journey to identify opportunities for innovation in packaging, messaging, and service.  Researchers observed physicians with patients and conducted in-home interviews with patients to learn how drugs are used.  As a result of the research, new techniques were developed to help patients comply with their therapies and to help physicians communicate and personalize treatment solutions for patients.  
> Miller Lite wanted to understand how brand updates would be received and understood by their current customers.  Researchers conducted in-home qualitative studies to gauge user reaction to marketing ideas being considered.  Interviews were conducted in stores and bars with different brand concepts in a natural setting to gauge consumer reaction.   Using a variety of ethnographic methods, the project culminated in the successful update of all Miller Lite branding and marketing materials.
> Best Buy, a leading consumer electronics retailer, wanted to explore expanding its selection to include a health and fitness department.  They were interested in how well customers would accept this brand expansion with a particular appeal to female shoppers. They wanted to understand the consumer product research and decision-making processes and to identify value triggers for investing in home fitness equipment. Ethnographers collected stories among women who recently purchased fitness equipment learning about stores the participants liked including Best Buy.  Researchers accompanied consumers on shopping trips for fitness equipment to understand the purchase process.  The ethnographic research helped Best Buy design the fitness department and provided direction in product selection.
> Ethnographic research is also useful in business-to-business situations.  Bosch, a manufacturer of production equipment, wanted to determine how to gain a competitive advantage over rival companies.  They first conducted interviews with production managers and then went into the manufacturing plant to observe how production-line staff used competitive equipment.  The observations revealed there were customer needs that were missed by competitors such as awkward adjustments and difficult maintenance procedures.  The result was a line of Bosch manufacturing products that overcame the shortcomings of competitive products.  Observing the use of competitive products, an ethnographic technique, gave Bosch the market insight they needed.
> Miele, a German household products company, wanted to investigate the cleaning needs of people with allergies.  They sent researchers into homes of people who had children with allergies to observe cleaning practices.  Through ethnographic research, they discovered, parents spent extra time vacuuming mattresses to remove allergens.  Parents could not be sure the mattresses were allergen- free, so they kept vacuuming.  Miele developed a vacuum cleaner with a series of lights that indicated when the item is dust-free.  This reduced the time and uncertainty of parents vacuuming their child’s bed, adding value consumers desired.  Based on this research, Miele also introduced a washing machine with special features to thoroughly clean pillows and bedding of allergens.

Big data, finding unusual relationships in structured and unstructured data, will always play an important part in marketing to understand what is happening.  But to develop insight as to uncovering consumer value, marketers use ethnographic research and visit people in their homes, watch how they use products, listen to stories about how and why they buy, what they buy, and gain deep insight into the purchase decisions. 
Perhaps, you should incorporate ethnography into your marketing research toolbox?  

* Herb Brotspies is an Adjunct Professor of Marketing (Retired) at Nova Southeastern University. For further information, contact Dr. Brotspies at hvb95@aol.com or (561) 302-3060.

Segmenting Business Markets - A New Approach by Herb Brotspies * [6]

Market segmentation is a fundamental concept in identifying profitable business opportunities.  Market segmentation divides markets into subsets of consumers or businesses who share a similar set of needs and wants, evaluating the subset segments, and then implementing strategies to target high value segments. 

Segmentation is widely used in consumer marketing. This becomes very obvious walking down the aisles of your local supermarket seeing product form segmentation such as liquid laundry detergent or powder, special shaving products for African American men, or easy to prepare food products targeted to the working parent.

In sharp contrast is business to business (B2B) where recent research shows limited use of market segmentation and where it is used, little value is received. It may be that segmenting business markets is more complex than consumer markets because business to business marketing is much more than a simplistic approach of finding customers who may be interested in your product.

Historically, B2B was viewed as the segmentation between the seller and buyer using a variety of segmentation bases including demographics, sometimes called firmographics, operating variables, purchasing approaches, situational factors, and buyers’ personal characteristics.  Simply, whoever bought from you was the focus of the segmentation analysis.

Today, B2B marketers recognize there are situations where the company buying your product is not the ultimate user or consumer. So, segmentation is more than just B2B. At times it is B2B2B or even B2B2C (consumer), thus segmentation requires a different approach.

B2B

B2B in its simplest form is when a business sells its products to another business who uses the product themselves.  For example, B2B is selling commercial dishwashers directly to restaurants.  The restaurant market may be segmented by large restaurants or hotels depending on segmentation criteria.  Based on analysis, the commercial dishwasher company decides to focus sales on restaurants with seating capacity of at least 150 people. 

This is not to be confused where a business sells products to business intermediaries who resell the product. When Coca Cola sells soft drinks to Wal-Mart, Coca Cola segments the market on the basis of consumer use of soft drinks and uses the B2B intermediary as a channel of distribution. However, Coca Cola may also segment the carbonated drink market by outlet type, food stores, drug stores, mass merchandisers, small grocery stores, convenience stores, and other outlet types.

B2B2B & B2B2C

But what happens when a business sells its product to a business customer and that customer incorporates the product into its own product for resale to either another business or to consumers? Does the segmentation method change? Do they look at segmentation differently?  Do they attempt to segment the market on the basis of their customer or do they also look at the business segments of their customers?

B2B2B

Several examples can help clarify this. XYZ Company manufactures electric motors. Electric motors have widespread application for use in other companies’ products. They are used as components in elevators, escalators, water pumps, oil industry pumps, even electric motors for aircraft.  XYZ segments the market not on the customer purchasing their product as a component first, but rather on the application of XYZ’s capabilities. They develop segmentation criteria for different industries using pumps taking into consideration their own capabilities and strategy.  Once they determine that the market for elevator motors and aircraft electric motors are growing but oil industry pumps and water pumps are not, they then focus on segmenting the suppliers to these industries.  In essence, the demand for their products is derived from the demand of their customers’ products.

B2B2C

This is also evident in the high technology industry. Chip makers sell to Apple, Lenovo, Compaq, HP, Samsung, and Dell, for use in consumer products such as cell phones, computers, and tablets and now smart televisions. Consumer behavior drives demand for these products.  So, a chip maker must understand their customer’s customer. A chip maker will also sell chips to companies for application for cloud computing such as Dropbox, Amazon, and HP Enterprises.  The sales for the cloud businesses of Dropbox, Amazon, and HP Enterprises are driven in part by consumer demand for cloud storage or cloud applications. Companies in the B2B2C business must develop segmentation skills in the consumer market such as psychographic and behavioral bases for segmentation. Thus, additional segmentation skills are required beyond the B2B segmentation skills for B2B2C companies.

In a recent report to analysts, Intel revealed they are reducing investment spending in software, personal computers, and phones and tablets while investing more in data centers with cloud computing, retail solutions, transportation and automotive, smart homes and buildings, and industrial and energy. These are consumer driven segments. They will then focus on companies who are strong in the growth segments they identified. 

Qualcomm similarly looks at the end user of their customers in deciding product developments, sales, and marketing priorities. They have identified segments where consumers drive demand including technology for the automotive market, smart homes, mobile computing, and wearables.  

Segmenting business markets is no longer just looking at your company’s customers or potential customers. With the recognition of B2B2B and B2B2C, segmentation is now focusing on the market segments served by the customers to drive investments in product development, sales, and marketing effort.  

* Herb Brotspies is an Adjunct Professor of Marketing (Retired) at Nova Southeastern University. For further information, contact Dr. Brotspies at hvb95@aol.com or (561) 302-3060.

Creating Better Customer Experiences [5]

[There are no traffic jams along the extra mile.  Roger Staubach]

The dominance of the service sector, global competition, rising labor and technology costs and demanding customers forces companies to create excellent customer experiences or fail. In the Now Economy, Companies must know their customer’s definition of service quality (SQ).  Organizations have to provide service experiences that meet or exceed customer expectations at a reasonable price.

It’s all about the service experience! Research has found that about 70% of customer defections are due to service problems. Customers evaluate service encounters to assess the quality of a firm’s offerings and whether they will continue do business with them in the future.  

Improving service quality is like taking vitamins, eating healthy and exercising regularly. Although the results may not be immediate, long-term benefits are significant. Managing service quality is not a “quick fix,” but rather a way of life for companies who are serious about improvement (e.g., Disney, FedEx, Ritz-Carlton, Singapore Airlines).

So, How Can We “Wow” Customers? 

Here are 10 recommendations that lead to superior customer value:

1. Co-create services with customers. Learn what customers value by incorporating the voice of the customer into the service development process.

2. Focus your improvement programs outward, on market breakpoints. By defining and mapping customer journeys, you can see the service experience as the customer sees it. Realize that customers view service as a totality, not an isolated set of activities.

3. Create a tangible representation of service quality. Hertz #1 Club Gold service communicates a premium, value-added bundle of services to business travelers seeking a hassle-free car rental experience.

4. Use teamwork to promote service excellence — service workers who support one another and achieve together can avoid service burnout.

5. Create a culture of service obsession based on key SQ determinants such as professionalism, attitudes/ behaviors, accessibility and flexibility, reliability/ trustworthiness and service recovery.

6. Develop metrics that are specific in nature, such as a 99% on-time delivery rate or an average customer wait time for telephone orders of less than 20 seconds. Benchmark best practices for each service metric employed.

7. Employee selection, job design and training are crucial to building customer satisfaction and SQ. The ability to respond quickly, competently and pleasantly to customers needs to be a priority.

8. Reward quality efforts in marketing. Seek opportunities to reinforce quality behaviors when they occur. Reward employees on the basis of commitment and effort, not just sales outcomes.

9. Think of service as a seamless process, not a series of independent functions. Service quality occurs when the entire service experience is managed effectively and efficiently and the organization is aligned to respond to customer needs whether it’s at the pre-sale, sale or post-sale.

10. Integrate customer information across all sales channels. The information made available to online and offline service representatives should be consistent. 

Checklist — How to Improve Service Quality

□ Does your company really listen to its customers? Give a specific example of how good listening improved the service experience.

□  Reliability means performing the promised services dependably and accurately. On a 10-point scale, where 1 is unreliable and 10 is perfectly reliable, rate your company and explain why.

□  How well does your company perform the service basics?”

□  How effectively does your company manage service design — systems, people and the physical environment? Provide an example of how lack of planning in one of these areas resulted in a “fail point” during a customer encounter.

□ Service recovery refers to how effectively companies respond to service failures. Cite an example when a service failure occurred and how it was handled.

□ Teamwork is an important dynamic in sustaining service workers’ motivation. How can you improve teamwork in your organization?

□ Internal service is crucial to service improvement, as customer satisfaction often mirrors employee satisfaction. To what extent does your company assess internal service quality?

This blog post is the 5th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4^th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .     

Enhancing the Value of Segmentation [4]

[You can drive your business or be driven out of business.  B.C. Forbes]

Does your company suffer from any of the following marketing deficiencies – fuzzy business mission, unclear objectives, information that is not decision oriented, lack of agreement as to segmentation’s real role in the organization, products/services that reflect corporate desires rather than customer needs, unfocused IMC strategy, and/or failure to attack niche markets and customize offerings? 

Over the years, many top B2B marketing executives have asked me how to build and implement a true segmentation-driven culture in their organizations. Based on my more than 20 years of experience as a professor, researcher, and consultant, here are a few of my thoughts on how to get the segmentation process in high gear.

1. Create a 1-day segmentation training workshop for the marketing group to generate excitement and stimulate project development. This will lead to a set of specific, market-based strategic initiatives and research opportunities. Bayer Diagnostics, Citrix Systems, Motorola and other companies have implemented such a plan. 

2. Begin with 3-5 small, focused and low-cost initiatives to demonstrate success and build enthusiasm. Realize that all segmentation projects may not be a resounding success (good news -- most will be if properly designed and executed). Cordis, a Johnson & Johnson company, benefited from the strategy of hitting many singles rather than going for grand-slam homeruns.  

3. Review previous segmentation studies and make sense of the summary reports. Via a meta-analysis methodology, a fresh set of objective eyes can add significant value to good work and extend segmentation reports buried in computer files or file drawers. At one time, Blue Cross Blue Shield of Florida had undertaken 18 segmentation studies with no synthesis, integration or strategic analysis.

4. As Intel learned, segmentation audits with marketing managers, channel members and customers can pinpoint current and potential problems as well as overlooked market opportunities and niches. 

5. Successful segmentation means being able to answer these 6 “what” questions -- what do you want to accomplish? (e.g., find new markets, get better customers, upgrade business relationships, align products to customer desires, create a segmentation model/typology, etc.); what methodologies will help you get the necessary information?; what is unique about your segmentation view of the world?; what is your budget?; what is your timeline?; and, what are reasonable expectations for the work?

I leave you with 5 thoughts to share with your management team to get them inspired and on-board to invest in segmentation thinking.

> I am convinced that market leadership is dependent upon how successful firms are at defining and selecting markets appropriate to their capabilities, resources and competitive situation.

> Segmentation findings provide a systematic basis for controlled market coverage as opposed to the hit-or-miss, random efforts of mass or unfocused marketing.

>Segmentation-based marketing is the essence of sound business strategy and value creation.

>Segmentation will continue to grow in stature as a fundamental marketing tool and foundation for marketing strategy in business organizations, large and small.

> A more thoughtful approach for market selection can assist marketers design winning target marketing strategies.

Realize that firms in all industry sectors are discovering the power of strategic segmentation as a marketing tool for attracting and retaining customers in fast changing, globally competitive markets. How about you?

This blog post is the 4th in a series from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .