The Importance Of Marketing And Customer Value

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Marketing is a complex and dynamic area of business that is defined by experts and businesses in countless different ways. It motivates and allows businesses to achieve their business objectives, which is to connect the customers and the organization by creating value for both sides. Customers are an essential asset of a business and so customer satisfaction is undoubtedly a focal point for companies. This essay will explore marketing concepts and philosophies, the meaning of customer value in relation to marketing, with examples from the well-established athletic apparel company ’Lululemon’.

Marketing is a complex multifaceted matter in the field of business, hence there are infinite definitions of what marketing is. Kotler and Armstrong (2010) define the marketing concept as achieving organizational goals which depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. Although Kotler and Armstrong’s definition may hold valuable insight in order to deeply understand what marketing is from the view and attitudes of a business, fundamental parts of the definition need to be explored. In relation to determining needs, marketing analyses and understands the needs of customers related to their organization, and by providing the appropriate and necessary goods or services (Chez, 1985). Furthermore, marketing plays a major role in the creation of utility, allowing consumers to obtain usefulness and productivity out of what they have purchased. Thirdly, marketing is also about exchanging relationships in order to satisfy consumer needs, where the buyer receives something of value to them and the seller receives something of equivalent value in exchange, namely sales income (Gabbott, 2004). Marketing is an ever-changing area in business, yet its impact does not differ. Research has proven that organizations that put marketing in the spotlight have greater improvements in organizational performance than those that treat marketing like any other organizational function (Day, 1994).

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Customer value is a fundamental contrast in marketing theory. Understanding customer value is extremely important for organizations to determine what features their goods and services required in order to provide the most suitable product to their target customers. There are two main aspects in relation to customer value, this consists of desired and perceived value. Woodruff (1997) explains that desired value refers to what customers desire in a product or service, whereas perceived value is the benefit that a customer believes he or she receives from a product after it was purchased. At the same time value can be interpreted very differently by each individual or customer group. Arslanagic-Kalajdzic and Zabkar (2017) explain that some people may prefer “value for money” or “money for value”. ‘Value for money means consumers may be more inclined to purchase price sensitive products, whereas ‘money for value’ means consumers are willing to spend more money on products that they believe are of better quality and will have a guarantee of longevity. A common understanding from a customer’s perspective is that customer value involves what they “get” positively (benefits) relative to what they have to “give up” negatively (costs or sacrifices) (Zeithaml 1988). To expand on this concept, Smith, and Colgate (2007), designed a framework to collectively summarise the different aspects of customer value. The framework has identified four major types of value that can be established by companies, functional/instrumental, experiential/hedonic, symbolic/expressive, and cost/sacrifice value. These dimensions of customer value can be thoroughly explained through examples in relation to the highly successful athletic wear brand ‘Lululemon’.

Lululemon is currently celebrating almost 20 years of success and their triumph can be accredited to the company’s understanding and use of customer value to guide their marketing campaigns. When Lululemon first began, it started as a design studio by day and a yoga studio at night which soon after transitioned into a standalone store. In their standalone stores, their early designs were only made for women to wear during yoga. Upon receiving feedback from their customers and various elite athletes, Lululemon (2019) had implemented changes whereby they now also design for running, cycling, training, and most other sweaty pursuits for both men and women. Lululemon (2019) offers various innovative lines such as the ‘Silverescent’ which involves stink-stopping fabric technology, the ‘Ever cool, everlux’ line which has a cool-feeling and is super-fast drying and the ‘Natural blends’ line which includes breathable fabric blended with natural fibers and yarns for extra softness. The above innovations satisfy the functional aspects of customer value as the fabric technology specifically targets the needs of their target customers who partake in physical activities, allowing them to achieve maximum performance. To satisfy symbolic needs, Lululemon’s (2019) creative concept director takes inspiration from the iconic city streets of New York to form bold prints and ‘splatter reflective’ designs. They have also been involved in collaborative projects with designers, seen in projects like ‘feather prints’ by Janaina Milheiro. These features allows their consumers to make a statement on their own personal style and express their self-identity through Lululemon’s athletic wear. For the experiential value, Lululemon is seen to be a prestigious and more luxurious athletic wear brand, their logo is easily identifiable, allowing for customers to feel excited and special when purchasing and wearing the brand. Lululemon (2019) also achieves the experiential value by introducing their various ‘sensation’ lines including the naked, hugged, and relaxed line which allows consumers to feel a particular way when wearing the various fabrics. In relation to cost and sacrifices, this identifies the customer’s perception as to whether the value the product has brought to them is worth the sacrifices they have made (Shanker 2012). Lululemon is considered a designer brand, meaning their athletic wear is more expensive than some other brands in the market. This shows that Lululemon is marketing their products to consumers who believe ‘money in value’, their consumers consider purchases that are more expensive to be more valuable from experiencing its quality of luxurious fabrics and longevity. Therefore, Lululemon needs to make sure customers are receiving more benefits than the costs they have paid, whether monetary or non-monetary.

Marketing allows producers and consumers to exchange relationships as a tool to satisfy not only the needs and wants of a customer through products and services, but also the needs of a business through revenue. Marketing has not always involved customers and customer value; this was gradually developed and focused on over time. After the 1960’s, marketing began to focus on their consumers and what their needs and wants were, this came to be known as the consumer era, where more organizations began to adopt a consumer oriented market (Solomon et al,. 2011). Most modern companies have now come to the conclusion that marketing begins and ends with the consumer (Keith, 1960). By using in depth research and evaluating customer values, companies are able to confidently produce quality goods and services, as they now know how to suffice customer needs and wants. Although marketing has developed over the years due to demanding customers, globalization and many other factors, companies still use the evaluation of customer values in order to achieve competitive advantage and remain dominant in the market. Marketing is dynamic, linking customer value into a company markets has always been as a key constituent of marketing strategy development and implementation (Ulaga, 2011), successfully implementing customer value strategies could essentially be the help companies needs to achieve the competitive advantage they desire. To demonstrate how the relationship between marketing and customer value allows for a successful business, Lululemon shows incredible success. Lululemon has successfully understood what their consumers desire and value, it is evidently able to successfully gain competitive advantage by listening to the customers’ demands and producing according to their target consumers. The company began with only women’s yoga clothing but has introduced menswear and athletic wear in general for all sorts of sports and activities. Lululemon developed and began to cater to everyone’s desire for stylish and expressive athletic wear by achieving the incorporation of customer values by producing comfortable and luxurious sportswear their consumers, making them feel that their money is well-spent.

In conclusion for a business, understanding the customers’ needs and delivering value accordingly is essential for the success of an organization. Without customer value, organisations wouldn’t have a clue as to what to bring to their customers to satisfy their demands and to achieve revenue. Ultimately, a business cannot survive without the line of connection to consumers which marketing creates, understanding and implementing customer value in marketing enables companies to not only survive but gain a strong competitive advantage.

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