Going a la carte
The live class had a conversation that briefly mentioned cable providers and their struggles in surviving against places that offer on demand material without the hefty price of subscribing to an all inclusive service. Just before this lecture was recorded, I watched a piece on my local news about cable companies making a change to accommodate this customer demand. Rather than forcing customer's to pay for a variety of channels, many or more likely a majority of which are never viewed, customer's would now be able to pick and choose which channels they would like to receive. This "a la carte" option would be much more consumer friendly and allow them to avoid paying for the aspects of the service they have no interest in. As a consumer and a cable customer, I would love having an option like this as the majority of channels my family subscribes are simply part of the package and have no real benefit to us. I would be impressed to see a cable or satellite provider offer this to customers. I think it would be a great marketing campaign that would attract many customers, wouldn't you?
Apparently, this is not something that marketers were forecasting as a new business strategy as this concept is not something being brought on by companies but rather being pushed for by government. Connecticut Senator Blumenthal recently signed on as a co-sponsor on Arizona Senator McCain's "a la carte" bill that is trying to put pressure on companies to switch to this approach to benefit consumers. The bill now has bipartisan support but is likely to meet resistance in Congress.
In my opinion, this is a great opportunity for a company to jump ahead of the competition and offer this service without being mandated to do so. On the local piece that I watched, every person interviewed supported the bill and said they would much rather choose their TV programming in this manner. This seems like a concept that can be researched very easily and would satisfy many customers. So why not look for a competitive advantage in the industry and make this a la carte dream a reality? I'm talking to you, Comcast.
Customer Loyalty
What I'm about to suggest is quite radical. Don't give up on it too early. There may be a problem with too much customer loyalty.
As this marketing class was quick to establish, the goal of a business is to gain repeat customers. Customer retention is hugely crucial to a company's success, making customer loyalty essential. I am not disputing the importance of keeping customers, but some of the class discussion centered around technology got me thinking a bit. Certainly, a company wants brand loyalty. The ultimate goal of Apple is for all of its customer's to choose Apple products over any competitors. What I begin to question is where does that loyalty need to stop? Does a company want that to stretch to product loyalty?
Let me further explain. If a customer becomes absolutely loyal to a product, that means they are likely in love with everything that product has to offer. Couldn't this lead to a customer becoming satisfied with only a current offering and not at all intrigued by a new model coming out of the same product. Perhaps a customer loves the iPhone 5 so much that they'll have no interest in the new offerings that come along with the iPhone 6. Or what about those users who have an iPhone 5 and love the multiple purposes it serves. Because of their ultimate satisfaction with the product, they see no use for the iPod or iPad whatsoever. What I am suggesting is that you certainly want brand loyalty but not necessarily product loyalty. If a consumer becomes to enveloped by one particular product, they may not see or even care to see the benefits of another.
So how much brand loyalty is too much? Maybe I'm getting carried away a bit, but this concept would only come into play in certain situations. During this week's lecture, there was a lot of discussion regarding Samsung and Apple and their different offerings. One student made a point that the latest iPhone is rumored to be complete with a larger screen, reminiscent of the Galaxy S3 and S4 offered by Samsung. This is showing that Apple is currently chasing their competitors when it comes to their market planning. But is this a good thing for them to do? Thus far, Apple has survived on doing things their own way and have built a loyal customer base that expects them to continue doing what they do well in their next products. With a very strong sense of brand loyalty, would it make sense for Apple to alter their brand to match their competitors? If they do choose to change based on their competition, their strength in brand loyalty may turn into a weakness as the consumer's who prefer Apple for being Apple may no longer be satisfied with their new product offerings.
In the end, customer loyalty is still the ultimate goal as it is the key to customer retention. These two ideas were merely suggestions and help lead me to two conclusions. One is that a company must be strong in marketing all of its product to its consumers, showing the specific benefits of each offering so as to not have one constantly overshadow another. Secondly, a company must be smart in sticking to their competitive advantage and providing their loyal customer base with what they are demanding which us ultimately defined by conducting quality market research.
Unforeseen Competition
One topic that was covered quite a bit within the week's material deals with identifying competitors. Different levels of competitors were discussed and it was pointed out that they can be in different industries altogether from what a specific product or service actually is. It was also brought up that often times competitors arise that are completely new and were never anticipated to be competitors. This is the case for the cigarette industry.
The above link brings you to the NBC Nightly News story about e-cigarettes. They are becoming increasingly popular among today's cigarette smokers. Some use this product as a safer alternative to cigarettes while others use it as a tool towards quitting. Regardless of the intended use, there a certainly benefits to the product as mentioned in the video. More importantly for the cigarette industry, they are taking market share.
Because of the growing popularity, the top cigarette companies should now view e-cigarettes as competition. Indeed they are doing so as the industry leaders are now showing interest in either developing their own version or becoming involved with pre-existing products. This is a perfect example of an industry being introduced to a new competitor and being forced to respond accordingly in order to maintain their market share and not lose their competitive advantage.
Moving Forward
No matter the approach a company decides to take in regards to viewing its competition, it is important that they continue to look towards the future. In doing the same, I am looking forward to connecting this new knowledge to Pharmasim and better analyzing my competition for decision making. I continue to find connections between the course material and the simulation that will enhance my decision making and overall experience. It's almost as if the course was designed that way.
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