Introduction
Are consumer insights so elusive? This is a question that requires a broad answer. Consumer insights became a trend in 1992 when Lisa Fortini-Campbell introduced the term in her book Hitting the Sweet Spot.
And now with computers and the Internet, Information Technology and globalisation, consumer insights may be a thing to reckon with. It has become complicated however and needs to be refocused to meet the needs and wants of consumers.
In this essay, we will distinguish what consumer insight means, both in singular and plural forms. There are variations to their meanings and usage. In simple terms consumer insight refers to consumer focus, consumer needs and wants and satisfaction, all molded into one. The underlying topics of market research are redirected to this point.
Today’s marketers have the world as their marketplace. It is a bigger place to introduce and sell products but also a wider place to analyze and deal with. Before, marketers could only focus with consumer insights of a particular place and community, now they have the ‘global village’ to deal with.
It was in 1992 when marketing could be done through one-to-one approach. But now with the popularity of the Internet and the information revolution, “mass customization” is becoming a trend.
A question that always seems to linger in the marketer’s mind is: What do consumers think and want? This question cannot be addressed to one group of consumers but to the world, the global village.
Global organisations, or businesses, think of more appropriate terms and strategies in this new, exciting (?) or challenging marketplace. There is more than one way to kill a cat, and marketers have to be flexible and creative in communicating to the outside world. This is the “exciting” world of business in the twenty-first century.
Insights and Theories
Insight can be just another term for market research. But it can also mean many things because of the vast information and knowledge available for organizations and businesses today.
Today’s marketers have to refocus and find new ways of collecting and analyzing marketing intelligence because of the new forces and trends in globalization. Information is the key; there are vast amounts of information about consumers out there that have to be collected and analyzed.
This new wave of information needs broader and creative ‘geniuses’ to arrive at fresh insights for the consumers’ needs and wants to be met. Moreover, a genius is not necessary. What is needed is “insight” and a careful study of the vast information acquired from the literature and from the field collected by sales people.
Globalization has revolutionized many aspects of marketing. Organizations have to adopt and introduce measures and changes in marketing strategies. This includes product orientation, employee management, and other organizational strategies.
Organizations have to refocus and acquire more knowledge since knowledge is a very ‘important asset’. Knowledge is very important in consumer insight. Organizations share knowledge with each other, but there are barriers in this activity. One example is the so-called internal stickiness.
Barriers impede the transfer of knowledge from people to people or department to department within organizations. Experience of organizations proved that it is not easy to transfer knowledge or best practice. This is termed internal stickiness.
Cultural diversity has also become a trend. Adaptation and standardization are also added to product diversification. There is a demand for local products but customers also want global ones, or imported products. Marketers adapt local products to adjust to cultural differences.
Meeting the customer’s needs and wants is a business trend in the age of intense globalization. Marketers aim for customer focus and loyalty. Organizations aim for customer loyalty while keeping cost of production low. This is multi-purpose but difficult to achieve; difficult because meeting the customer’s needs and wants at the same time minimizing cost of production do not ensure quality product or service.
Customer satisfaction is an important strategic part of marketing. Products and services are geared towards customer focus, and customer satisfaction is a goal in a value added supply chain.
In order to address the problem of customer loyalty, firms apply product and service innovations. This is also the main objective of market orientation – customer satisfaction through superior performance of products and services.
Customer relationship marketing (CRM) creates value for the customer. Kotler et al. includes the idea of value in the definition of marketing, which is “the relationship between what is paid and what is received, and can be increased or reduced by marketing activities.”
Marketing involves a lot of issues, including a database of information, data and knowledge. There is the question of the marketing mix that also requires more information about consumers. The marketing concept looks at the depth of selling which is searching for ways to satisfy the needs and wants of the customer.
Organizations have to find out what will satisfy customers, then, create satisfying products. The marketer must continue to apply innovations. This is what they call continual improvement in the company’s product.
There is another trend in marketing and that is, ensuring that the customer longs and wants for a ‘remake’ of the product; in other words, the strategy is to aim for the customer’s coming back to want for more. But customer satisfaction does not necessarily mean loyalty on the part of the customer. Many authors suggest that having continuous communication with the customer is one step to loyalty.
Customers have to be asked to rate the importance of particular attributes and performance levels of the product/s. They have to be asked about their willingness to repurchase and to recommend the products that they had bought. These steps can lead us to the concept of customer loyalty.
Consumer Experience
Marketing research on experience focuses on what the customer wants. Benefits are in the form of satisfaction and customer experience of the product. Consumer behavior for example has three aspects which are: creation of information, behavioral concept theory, and consumer attitude theory. These concepts provide consumer insight on consumer experience.
In response to the complexities of the time, i.e., the existing pressure of globalization, marketers have reformatted the way they collect and utilize market intelligence. Marketers need more information and are redefining goals to suit to the present trend of intense globalization.
In a study by Morash and Lynch, they found that customer closeness is one of the requirements for customer focus and loyalty. It is important in demand-oriented capabilities and performance. Customer closeness is associated with responsiveness to customers and customization. Supply chains can also be aimed at customization. It is a strategy that combines operational excellence with customer closeness.
Flexibility is another important factor in having customer closeness. Flexibility refers to being able to change and react to customer demands, or requests. A flexible organization reacts to quick changes in the product mix. Flexibility has other ‘flexible’ connotations, such as financial performance.
There are many questions that managers and marketers ought to answer about the customer when looking for customer focus and loyalty. A study should be made on how customers behave, how they react to the product, and how they experience the product. Some questions that need to be answered by the marketer are:
- Why do customers want and like this product?
- What attracts customers to my product?
- How do customers receive the information advertising and commercials?
- When is the appropriate time to convince them to buy the products?
An important strategy being applied by global firms in meeting the needs and wants of customers is introducing an approach to supply chain that focuses on the customer. Knowing the customers’ needs have become a foundation for which a company is founded.
A company has to be marketing orientated, and for this, a number of changes have to take place in the organization, for example practices and attitudes. The marketing concept has evolved over the years of business and globalization.
In the study of consumer insights, we refer to behavioural sciences that tell us more about buyer behaviour. But it is more than that. Knowledge, information, technology, these are some of the vast amount of resources needed to know consumer insights and consumer behavior.
A customer can be defined in different ways. An airline company can look at it in a different angle. But for a pharmaceutical company, a customer can be a physician or the patients in the hospital.
Organizations, with their marketers and salespeople, have to manage and integrate their actions to different kinds of customers. Gathering all those information can be laborious and requires a lot of time and resources. But innovations and programs of activities have to be focused along this line of activities.
Organizations can shift focus to analyzing the various information and data, turning it into knowledge and expertise. The company can conduct its own survey, using its own people and resources, in order to know whether customers still want the company’s products, or if they are shifting to the competitors. The information on the customer satisfaction is vital in the improvement of the product or service.
On the other hand, customer focus and loyalty is important to supply chain. The marketer should understand customer experience of the product, and the customer should be able to interpret the customer experience by answering what still needs to be done.
The Meaning of Insight
There is no puzzle about what is insight. We all have this, but consumer insight is unique because only marketers have expert knowledge of it.
Consumer insight is referred to as “voice of the consumer”; it can influence or become a basis for better decision making of a company or organization. Product planning and development, customer relations, department communications and management are more made effective when there is fundamental understanding of the consumer.
Historically, there were some organizations that recognized the need for a separate department to handle the vast information for consumer insights and so concerned CEOs formed the account planning unit.
Other organizations established their own directorships – Director of Consumer Knowledge Development, Manager of Consumer and Market Knowledge, etc. Managers were in charge of interpreting and applying information to the different departments in an organization.
The term insight has two meanings: one is plural and the other singular. The plural form, “insights”, refers to ideas or discoveries that can provide opportunities. The marketer can be aided with tools like customer databases and market research.
The singular form, on the other hand, “insight”, refers to one’s talent or capability to think clearly and deeply. It refers to a marketer’s deep knowledge of the consumers, which can help in decision making.
This type of insight is very important; it is a deciding factor in customer loyalty. Every marketer ought to have it. This is not about knowing some pieces of a puzzle but having all the necessary ingredients to produce a complete picture. Everyone involved in marketing, particularly those who personally deal with consumers, should know and see the picture.
Consumer insight cannot be attained from simple research but from combined sources, such as databases, planning data, reports, market intelligence, feedback from people in the field, even consumer complaints, and everything about consumers.
The importance of consumer insight to marketers has been established. The implications for business and organizational growth with a well-defined and well-research customer insight are significant.
But consumer insight will continually change over time because of the demographic changes and the changes in the market forces. Marketers will have to adjust, introduce new innovations, and continue to need customer insight because of the following factors:
- Customers will not make themselves available to traditional marketing. Brands will be very important as customers will prefer a select few. That is why, it is important that organizations have a database of consumer insights. Customer interaction in websites can help in having more information about customers and their preferences.
- Marketing peers, such as those from the media, will be less cooperative and so there will be resent among the various groups in the media.
- Brands will not be easy to build. Consumers will be more bright and wise and so traditional brand builders will find it difficult to succeed.
- A new demographic of employees will emerge as most of those over fifty years old will remain employed. Another thing is the employee backlash as everyone becomes a customer, and an alienated customer at that. An example is your wife or employee who complains about your product.
Database Marketing and Consumer Insight
Database marketing refers to the relationship of consumer and organization when both are in the process of communicating, exchanging all possible information for a particular and actual purchase of a product or about certain service issues that a consumer wants clarified.
While the traditional characteristics of the marketing mix focus on consumer and relationship with supplier and product, database marketing is narrower. This is focusing on the organization’s desire to sell more.
Database marketing has a lot of good and positive results for an organisation. Its benefits are what businesses expect of market research.
- Database marketing turns interest into profits. It does clear action, also referred as brand advertising. We know how important a brand or name of a product.
- Database marketing upholds brands. Brands are like names of countries; they represent a people, they carry a reputation. Remarkable names or brands are those whose reputations cannot be questioned.
- Database marketing also delivers what is expected. Consumers to good advertising.
- It fosters customer interaction. This kind of communication can be done through the Internet. A company’s website should have customer interaction feature wherein customers can ask question and lodge complaints.
Another focus on this particular strategy of marketing is customer care. Customer care is simply taking care of the customer. This includes everything, or every activity and product that satisfies the customer.
Examples are: a well-polished and beautiful store where storeowner and employees wait and expect the customer’s “orders”, a state-of-the-art website where organization and customer interaction is one of the awaited features and readily available with an administrator providing 24-hour service to customers’ questions and complaints, and everything about good service.
Supplier staff and employees treat well the customers. These are some of the features of customer care.
Database marketing is more focused on the individual consumer but customer care recognizes the role played by people like relatives, friends and neighbours of the customer. In this instance, there is the role of the influencer or the person who influences the customer to buy the product. Another one is the decision maker who has the budget to buy the product.
Database marketing can become a science by itself, as what managers and marketers hope it to be. This is because in this kind of activity, a marketer or a salesman, or anyone who is charged to have direct contact with customers, can conduct experiments and tests and be able to control the results.
Case Study: Getting into Customers’ Insights
Understanding consumers and offering them products they want are one of the most difficult jobs in marketing. But this is the job of marketing research firm AC Nielsen – to understand the behavior of customers who purchase consumer goods in their everyday lives.
AC Nielsen aims to provide clients with knowledge and information on how to meet consumers’ expectations. Nielsen’s clients are big names in consumer retail, such as Wal-Mart, Kraft Foods, Tesco, and more.
These companies are the global ones that invest much on capital and people. Millions of dollars are at stake and they have to target the right customers, the right approach with appropriate insights needed to win their trust and loyalty.
AC Nielsen Homescan & Spectra, a global branch of AC Nielsen, makes use of the latest technology in doing research, such as a software that allows the company to communicate with clients and groups that conduct software development, database management, in order to provide client-centered services.
When a client approaches AC Nielsen, asking for consumer insights and how to increase sales on a particular segment, AC Nielsen studies the target consumers. They know, through previous researches, consumers who buy products in different stores, and they can also forecast consumer attributes through market intelligence and other studies in the market. It is important that they know the client needs.
Their strategy is to work with research staff that compare sales rates to the shoppers in the stores. Through calculations, they could tell which stores were selling more products be determining the kinds of customers the stores served.
The importance of consumer insights is stressed in this case study. A lot of information about customers, the products they want, how and when they want those products were important inputs in knowing how to increase sales of which stores.
Selected Examples
When Zara, an international apparel and fashion firm with a chain of approximately 2000 stores worldwide opened a Melbourne branch, it needed a research company to research on consumer insight in new its new market. The research team should answer questions like: How would the new market increase sales? How and when is the time the industry peak its sales? How should customer focus be dealt with?
The company had to refocus and acquire more knowledge about the new segment and demographic. Knowledge is an important asset to the company. The results of the survey-research helped Zara cope with the new market.
Another example is that of a chain of restaurants known as Darden Restaurants. This company owns hundreds of restaurant brands known as Red Lobster and Olive Garden which specialize in seafood menus. Before opening a new branch anywhere in the world, the company would hire a consulting firm to conduct research-survey on external analysis.
The company is aware that restaurant business is complicated business. Industry competitors use all sorts of strategy in the marketing mix – advertising, promotion, product, prices, and places. The industry is also management- and capital intensive and brings along with it high capital requirements. Because of this strategy, Darden Restaurants has become successful in every country it wants to penetrate.
Conclusion
The subject in this essay can be summarized in two terms – customer insight. This is a simple subject that can lead us to many underlying topics of interest for marketers and consumers (although consumers wouldn’t really care). It is the marketer and the organization where he/she belongs who should look at things in many perspectives.
Acquiring more profits is not anymore the main objective. By making it a secondary one and by understanding customers, a business firm can progress. It is also a difficult job to achieve. With globalization, products are multiplied every minute, every second of the day.
There are more products in the global village while customers are becoming fewer, many are hiding in their ‘global village’ homes. The industrial revolution, the consumerism in America, standardization and adaptation, they have all made products cheaper and consumers never wanting for more.
Customer insight is linked to customer satisfaction and loyalty and focus. Global organizations compete to gain more customers. They try to understand customers, interpret consumer experience, and put this in their program of activities in order to maintain customer loyalty.
It is not enough that customers buy the products; it is important that they pass the word, and subsequently come back. A partnership between the business firm and the customer can make the company happy.
This is about the new strategy in the new world – understanding consumers through consumer insights.
Bibliography
ACNielsen. Consumer-Centric Category Management: How to Increase Profits by Managing Categories Based on Consumer Needs. New Jersey and Canada: John Wiley & Sons, Inc., 2006.
Blythe, Jim. Principles & Practice of Marketing. London: Thomson Learning, 2006.
Boone, Louise and David Kurtz. Contemporary Marketing. Mason, OH: Cengage Learning, 2009.
Callingham, Martin. Market Intelligence: How and Why Organizations Use Market Research. United Kingdom; USA: Market Research in Practice, 2004.
Chan, John. Toward a Unified View of Customer Relationship Management. The Journal of American Academy of Business, Cambridge, Staffordshire University Library, 2005.
Darden. Company History. 2011. Web.
Gamble, Paul, Alan Tapp, Anthony Marsella and Merlin Stone. Marketing Revolution: The Radical New Approach to Transforming the Business, the Brand & the Bottom Line. Great Britain and the United States: Kogan Page Limited, 2007.
Jobber, David and George Lancaster. Selling and Sales Management, Sixth Edition. England: Pearson Education Limited, 2003.
Schmitt, Bernd. Experience Marketing: Concepts, Frameworks and Consumer Insights. Foundations and Trends® in Marketing, vol 5, no 2, pp 55-112, 2010.
Stone, Merlin, Alison Bond and Bryan Foss. “How Customer Care and Database Marketing Use Customer Insight.” In Consumer Insight: How to Use Data and Market Research to Get closer to Your Customer, edited by Merlin Stone, Alison Bond and Bryan Foss, 59-68. United Kingdom and USA: Market Research in Practice, 2004.
Stone, Merlin, Alison Bond, Clive Nancarrow and Sharon Rees. “Consumer Insight and Market Research.” In Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer, edited by Merlin Stone, Alison Bond and Bryan Foss, 111-112. United Kingdom and USA: Market Research in Practice, 2004.
Stone, Merlin, Bryan Foss, Alison Bond, Martin Hickley and Nick Orsman. “Privacy, Risk, and Good and Bad Consumers. In Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer, edited by Merlin Stone, Alison Bond and Bryan Foss, 209-211. United Kingdom and USA: Market Research in Practice, 2004.
Stone, Merlin, Bryan Foss, Alison Bond and Steve Wills. Introduction to Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer. Edited by Merlin Stone, Alison Bond & Bryan Foss, 1-3. United Kingdom and United States: Kogan Page Limited, 2005.
Stone, Merlin, Clive Nancarrow, Bryan Foss, Alison Bond and Nick Orsman. “Using Consumer Insight in Developing and Retaining Consumers.” In Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer. Edited by Merlin Stone, Alison Bond and Bryan Foss, 160-161. United Kingdom and USA: Market Research in Practice, 2004.
Stone, Merlin, Julie Abbott, Bryan Foss, Paul McDaid and Doug Morrison. “Consumer Insights Systems.” In Consumer Insight: How to Use Data and Market Research to Get Closer to Your Customer, edited by Merlin Stone, Alison Bond and Bryan Foss, 228-230. United Kingdom and USA: Market Research in Practice, 2004.
Szulanski, George. Exploring Internal Stickiness: Impediments to the Transfer of Best Practice Within the Firm. Strategic Management Journal, Vol. 17 (Winter Special Issue), 27-43, 1996.
Venkatraman, N and John C. Henderson. “Four Vectors of Business Model Innovation: Value Capture in a Network Era.” In From Strategy to Execution: Turning Accelerated Global Change into Opportunity, edited by Daniel Pantaleo and Nirmal Pal, 259. Heidelberg: Springer, 2008.
Vitale, Dona. How Smart Companies Apply Customer Knowledge to the Bottom Line. New York: Paramount Market Publishing, Inc., 2006.