The Important Association Between Customer Value And Marketing
There are many different factors that contribute to marketing in order for a business to be successful in its marketing ventures. Brands such as Lululemon must be aware of it’s marketing environment, including the microenvironment and macroenvironment. The microenvironment refers to “All those other organisations and individuals that, directly or indirectly, affect the activities of the organisation” (Sharp, 2013, p.185). The microenvironment includes organisations and individuals such as suppliers, customers, competitors, community and so on. In particular, Lululemon should be aware of their customers both current and potential. Knowledge of customers will allow Lululemon to create a defined target market. Further, Lululemon should identify who their major competitors are. Unger (1981) suggests that awareness of competitors is increasingly important. As mentioned earlier major direct competitors of Lululemon include Nike & Adidas. Knowledge of Competitor’s will allow Lululemon to identify changes in price, marketing or if there are any gaps in competitor’s product range. Overall, monitoring competitor’s will ensure Lululemon can ensure their marketing is unique and successful. Additionally, the Macroenvironment refers to “The larger, wider forces that have influence over companies and economies” (Sharp, 2013, p.185), including political, economic, social, cultural, technological and natural factors. In respect to social and cultural factors Lululemon should be aware of any changes regarding fitness and health in society, as a new product opportunity may arise. Lululemon should also be concerned with the state of the economy in regards to interest rates, employment and income. As Lululemon is a high end brand with premium prices it could be beneficial for Lululemon to release marketing campaigns for new product ranges when economic activity is stable and disposable income is high. This would most likely result in higher response to the marketing campaign increased sales. Largely, Marketing is a key aspect to an organisations success, in which many factors must been considered and analysed.
Creating customer value is essential to marketing (Hunt 1999), according to the Smith and Colgate model (Smith & Colgate, 2007) Lululemon must consider functional, experiential, symbolic and cost value factors. Utilising the Smith and Colgate model Lululemon can create customer value through developing a marketing strategy, improving products, creating new products, thus overall generating customer value. Functional value refers to the extent to which a good or service has desired attributes and performs successfully. Organisations such as Lululemon should undertake constant research in order to excel in product innovation (Wiersama, 1993), thus always aiming to provide better products that meet higher standards of performance. Lululemon has met functional value through Providing a high quality durable product that is superior to that of competitors. Furthermore, Lululemon provides an extensive range of apparel to customers in order to meet a variety of desired performance outcomes, such as yoga, running and cycling. Moreover, Experiential value focuses on the experiences and emotions of customers. Lululemon should focus on their relationship with customer’s in which they should provide high quality customer service, hence generating trust between the customer and the brand. As Lululemon promotes a healthy, balanced and active lifestyle, they can further encourage this desired lifestyle to be achieved socially through group fitness. It is also essential that Lululemon reflect this lifestyle through their stores by creating a fresh ambience utilising inviting music and colours, hence creating an environment in which customers feel comfortable to embrace a healthy, balanced and active lifestyle. Symbolic value involves customers attaching meaning to a good or service or even brand. As Lululemon is a high end brand this can appeal customer’s self-worth of owning a product associated with luxury. Through the development of a broad product range Lululemon allows customers to express themselves and have a part of their own personality included in the apparel they wear from the variety of colours and patterns to choose from. Cost value includes the different types of costs that may be associated with purchasing a good or service; such as economic cost, psychological cost or perceived risk. The high quality of Lululemon’s products means that although prices are at a premium, the products are durable. Henceforth, customers will have reduced psychological stress, as the need to search and buy new apparel will be less frequent, compared to if the customer bought low quality cheap apparel. Likewise, customers will not have to waste time constantly buying new apparel. Lululemon should further aim to have a flexible return policy both in store and online in order to reduce the perceived risk customers associate with a purchase. Hence, with a flexible return policy consumers are more likely to purchase a product from Lululemon as risk is subtracted from the purchase, because even if a product does not fit or if a customer changes their mind they can return the product. Utilising the Smith & Colgate framework can be a useful tool for generating customer value in identifying new opportunities, providing direction for research and illustrating brand.
Both Marketing and customer value are important aspects of a businesses focus. The success of a business can be associated by the link between marketing and customer value, Cooper (2001) suggests that “products offering superior customer value are more successful”. Marketing influences the decisions consumers make in regards to purchasing goods and service. Consequently, if organisations considered what customers value most and interlace these factors with their marketing campaigns; consumers are more likely to respond positively and boost sales for the organisation. Therefore, through utilising the Smith and Colgate framework organisations can implement identified customer values into marketing, producing a prosperous business. Lululemon has been able to successfully recognise that customer value and marketing are two important aspects that are complements of each other. Subsequently, Lululemon have distinguished what factors customers place utmost importance on and have incorporated these values into their marketing, thus resulting in global success. Marketing is a fundamental technique of communication between an organisation and consumers, hence it is beneficial for an organisation to utilise marketing to ensure consumers are aware of the importance an organisation places of customer value. The link between superior customer value and marketing is crucial to maintain an ongoing relationship with customers (Webster, 1992)