This document discusses the shift from traditional product-focused marketing to customer-targeted marketing. It notes that as the global economy becomes more turbulent and competitive, companies are realizing that customers are their most important asset. To survive, companies must satisfy customer needs and wants. This has led many organizations to rethink their marketing strategies and focus on developing customer-centric approaches. The document also discusses how the rise of technology and internet has empowered customers and increased their expectations, driving further need for companies to target marketing efforts towards individual customers.

1. Prepared by: Babar Mushtaq
Assistant Professor
Al-Barkaat Institute of Management Studies,
Aligarh. (U.P.) India

2. In a world economy that is in constant flux and
undergoing turbulence, more companies are realizing
that their most precious asset is their customer base.
An even more important realization is the need to
satisfy the whims and fancies of these customers in
order to survive in these increasingly competitive
markets. Organizations that do not act on this dictum
have suffered the loss of market share or worse, total
annihilation(completely destroying). Such dire (bad
or serious) consequences have awakened many
organizations to rethink the way they see marketing.
Thus, there is urgency for an organization (be it
products or service providers) as a whole to develop
appropriate holistic customer-focused strategies to
ensure that the customer remains at the core of their
organizational thinking.

3. With the rapid advancement of information technology
(especially the rise of the Web) and the increasing
difficulties of meeting customer’s needs and wants (for
example, their expectations of 24 / 7 customer service
especially for online transactions), there is a shift from a
traditional marketing approach to customer targeted
marketing. Many organizations and marketing consultants
are emphasizing the need to allocate more funds to apply
new-found knowledge of consumer behavior in new
products development, build better customer relationships
through customer loyalty and retention programs.
This purpose of this paper is to raise the awareness of the
need to concentrate marketing efforts towards the
customer rather than the inward-looking traditional
product-focused arrangement. And more importantly, the
paper will shed light on how an organization could go
about in making this important transition in this current
competitive market.

4. The marketing mix or what is commonly known
as the 4 Ps is a framework for marketers to
implement a marketing concept. It consists of a
set of major decision areas that a company
needs to manage in order to at least satisfy
consumer needs. According to Kotler et al.
(1999), the mix is a set of 'controllable tactical
marketing tools [...] that the firm blends to
produce the response it wants in the target
market' (p.8). Hence, in an effective marketing
program, all of those elements are 'mixed' to
successfully achieve the company's marketing
objectives.

5. The traditional marketing mix contains four major
elements, the '4 Ps of marketing'. As defined by Kotler et
al. (1999):
1.Product: Anything that can be offered to a market for
attention, acquisition, use or consumption that might
satisfy a want or need. In includes physical objects,
services, persons, places, organizations and ideas.
2.Price: The amount of money charged for a product or
service, or the sum of the values that consumers exchange
for the benefits of having or using the product or service.
3.Promotion: Activities that communicate the product or
service and its merits to target customers with a view to
persuading them to buy.
4.Place: All the company’s activities that make the product
or service available to target customers.

6. With the rapid changes surrounding organizations, the traditional
marketing mix of the 4 Ps has been criticized for being too
myopic in this current market situation. The traditional
marketing mix has also been disparaged for being too product-
focused and for taking an overly inward-looking strategy with
regards to the organization’s resources and capabilities in
production matters. This is antithetical to attending to the more
important organizational goal of satisfying the desired needs and
wants of customers.
In addition, the Web and E-commerce revolution has played a
major role in alleviating customers’ ability to shape their
relationships with the company. This has led customers to expect
companies to market their products and services in ways that
reflect more directly their individual needs.
These changes have prompted enterprises that wish to stay
ahead of their competitors to shift their traditional marketing
approach to customer-targeted marketing.

7. In customer targeted marketing, the customer becomes the central focus
of the organization’s strategy and activities, rather than the product
itself (which is the prime concern in traditional marketing). The
organization’s paradigm shift in marketing requires a company to build a
commitment to quality and to listen critically to the customer to
determine the market needs and how the company can meet those needs
more effectively.
One of the major characteristics of the approach is to focus on each
customer’s interests and interactions with the organization to deliver
targeted, personal messages. This would require the company to be
constantly gathering information about their customers in an effort to
better serve them and, most importantly, to retain them as loyal
customers. As suggested by Peppers and Rogers (1998), the organization
would need to use various techniques and strategies (possibly with the
help of information technology and the Web), such as focus groups, in-
depth interviews, customer surveys, attitude testing and so on to obtain
information about consumers for more effective marketing of a product
or service. With these customers’ data and feedback, the organization
will apply the knowledge to develop more customer-centric products and
services and/ or to improve existing ones. In addition, the information
will be shared within the organization to encourage employees at all
levels to focus on creating maximized customer value and loyalty.

8. In order to have a competitive edge and to satisfy
increasing levels of customers’ desires, companies realized
that they have to see their customers as individuals rather
a homogeneous mass of similar tastes, values and buying
behaviors. Due to such transformation, companies need to
be more customer-focused in its overall marketing
strategy. This has resulted in organizations adopting a
customization strategy to increase customer’s loyalty to
their products and services. For example, in banking and
insurance industry, there has been a move towards greater
customization. Standard products/services have been
given way to a varied menu of features from which
customers may select their own preferred combination.
In view of these changes, companies that understand the
asset value of each customer, and that tailor their
marketing efforts (and their costs) to acquire and sustain
the highest-value assets, will win over less-adaptable
traditional marketing approach of the 4 Ps.

9. In order to strategically change from a traditional
marketing approach to customer targeted marketing, an
organization must be aware of these following areas:
Paradigm Shift. A company must fully understand that
customer targeted marketing requires a shift in the
organizational mindset, and not just structural
organizational changes. They must realize that their sole
purpose is to continuously satisfy customers’ needs and
wants. Thus, to ensure a smooth transition from a
traditional marketing approach to customer targeted
approach, an organization must reflect and ask itself
questions as to what areas need to be analyzed and to
understand the ramifications of such a transition in the
organization. On the other hand, an organization needs to
realize the negative consequences for not willing to be a
more customer-focused marketing organization.

10. As in any organizational change initiative, proper planning is
needed. The objective of planning customer-centric marketing
strategies is to find win-win opportunities with customer and to
identify the best mutual opportunities for your customers and
your company. This requires the organization to see the issue(s)
from the customers’ perspectives and to strategically plan the
organization’s resources around them.
In short, the organization’s shift to customer-targeted marketing
should embrace these three important points:
1. Planning should focus on customer wants and not looking
inwardly at company goals
2. Focus on the honest feedback and suggestions through creating
different channels of communications. Listen to the customers,
rather than forcing them to listen to you.
3. Integrate your customers in every aspects of your business, from
new product design to after-sales services and more.

11. For the approach to be successful, members
need to understand the new philosophy of
marketing and embrace it organization-wide.
Many organizations tend to underestimate
the degree to which every facet of the
enterprise needs to be involved in the
process and to be integrated into the actual
customer relationship.

12. An organization has to assess the roles of all
functional departments interacting with
customers to ensure that they add value to
customers instead of increasing the costs. By
reorganizing the company with the customer
as the focus, many departmental roles and
responsibilities will have to be redesigned.
And when that happens, the employees will
have to adopt new work processes that
would be more customer-centric in nature.

13. There is a need to develop customer-focused
human resource through customer behavior
training, across the functional departments.
By investing in such training at all levels, the
members will be more knowledgeable, more
autonomous, and more efficient in
anticipating and meeting the needs of the
customers.

14. With the advancement and increased
affordability in information technology, more
companies are able to collect available data
on customer purchase behavior more
efficiently. For example, technologies
ranging from checkout scanning to Internet
cookies are commonly used to track
customers' buying behaviors. Companies that
employ such technology will be more adept
at acquiring new customers, retaining
existing customers, and cross selling than
those who do not.

15. With the use of the Internet as a medium for
targeted communication, this allows
companies to be in touch with customers at
less than one-hundredth of the cost of more
traditional snail mail, brochures or flyers.
Communication through emails with the
customers is almost free, and the customers
can retrieve communications almost
immediately. However, this has also resulted
in customers having 24 / 7 service
expectations of these companies.

16. An organization must be able to measure and
evaluate the success of their customer targeted
marketing strategy. In most cases, traditional
measurement techniques such as profitability,
market share and profit margins are used to
measure the success. There should be an added
emphasis given to developing measures that are
customer-centric and which are able to assess
the marketing strategy. Customer acquisition
costs, conversion rates, retention rates,
customer sales rates, loyalty measures and
customer share within a brand are some
examples of customer-centric measures than a
customer-focused organization can adopt