Marketing Model based on Customer Value Creation through Market Sensing and Learning
We are living in revolutionary times where the outdated and outmoded thinking about economics, business and virtually every sphere of life is being challenged by newer ways of thought.
Gone are the days when businesses and marketers had certainties about the marketplace and customer preferences and tastes. Instead, what we have now is a fast changing marketplace where change is the only constant and the ability to respond to changing market conditions becomes the prerequisite for success.
In this context, it is worth noting that businesses can only survive in these times by anticipating what the customers want and by getting into the minds of customers instead of post facto response that has been the hallmark of marketing till now. What this means is that instead of focusing on transactional, brand or relationship marketing, marketers need to move up the value chain and focus on value based marketing.
What are Market Sensing and Learning ?
Market sensing and learning is the first stage towards creating a path of transforming the firm into a highly competitive one that does not merely react to market trends but instead sets the market or is a trendsetter in its own right.
The point here is that to succeed in the uber competitive marketplace of today, companies need to get the pulse of the market before their competitors and as explained in the previous section, they need to be psychic in this endeavour where they get into the minds of the customers and learn to gauge what the customer wants next.
To achieve this goal, firms need to enhance their marketing research capabilities to extend beyond data based analysis to a stage where advanced sensing and intelligence about the market or Market IQ drives the learning process.
Market Sensing and Learning Strategy
First, to introduce what is meant by market sensing and learning and how it differs from market research, we need to consider the analogy of a Black Swan (a concept popularised by the famous business expert Nassim Nicholas Taleb).
According to Taleb, till the first black swan was sighted, we took it as gospel that swans are white and hence discounted the other possibilities. Only when explorers sighted the first black swan in Australia did people consider the possibility that Swans can be black.
What this analogy tells us is that there is lot of information in the market that is simply not known to marketers and unless they change their perspective and way of looking at information gleaned from customers, they would be like the proverbial swans are only white kind of people.
The analogy serves the purpose of this discussion in so far as appreciating the fact that businesses tend to discount the improbable simply because it is beyond the comprehension of their managers. Unless businesses develop the art of knowing the unknowns they cannot succeed in delivering value to the customers.
Hence, the takeaway from this example is that market sensing and learning goes beyond conventional ways of market research and instead presupposes a radically new way of enhancing our knowledge of the market.
Recent trends have shown unless firms raise their Market IQ substantially, they tend to fall behind in the race to the top. Market IQ can be enhanced by using sophisticated techniques like ethnographic market research, study of internet trends, neuro marketing, and by recourse to futurology where marketers can collate the information at their disposal to arrive at an extrapolation of these trends to peer into the future.
Unless marketers develop the art of sensing the direction in which the market is headed and learning from the customer by going beyond conventional market research, they cannot deliver value to the customer simply because they are not in a position to know what the customer wants.
Pathway to Customer Value Creation
We have seen how market sensing and learning represent the first stage in creating a pathway towards customer value based market strategy. To expand on this further, one needs to consider the fact that once the businesses understand the customer and the market well, they are in a position to deliver value to the customer which is the overall aim of the strategic transformation that businesses seek in todays world.
Once the businesses understand and know the customer, then they can evolve beyond responding to changing market conditions and instead pre-empt what is going to happen next and tailor their strategies accordingly.
The point here is that raising ones IQ leads individuals towards anticipating future trends and the enhanced intelligence allows for better analysis of complexity. Customer value is arrived at after combining a host of factors and variables, which interact with other variables, raising Market IQ is needed to make sense of the market trends and customer preferences.
This process of getting to know the customer needs and aspirations is essential to delivering value and hence the ability to sense and learn from the market is the first step towards creating value for the customer.
However, it needs to be mentioned that achieving market sensing and learning capabilities envision a break from conventional thinking and what marketers need to understand is that the emerging fields of complexity and systems thinking have to be harnessed to develop broad based market sensing and learning capabilities.
Once the businesses are in a position to gauge the market mood, then they can go to the next steps of making strategic choices and decisions that create customer value and drive the value based marketing strategies of the businesses.
The turbulent and chaotic marketplace of the 21st century needs capabilities that go beyond mechanistic modes of thinking and hence what is needed is an ability to create value by understanding complexity and behaviour of the customers.
Customer value is created only when the expectations of the customer and the product features or the service delivery meet or when these exceed the expectations of the customer. Hence, to achieve this, the first step is to know what the expectations of the customer are and then to tailor the marketing strategies accordingly.
And to know what the customer expectations are, businesses need to have processes in place that aid them in this endeavour. And the first steps in establishing these processes that can aid them in this pathway are market sensing and learning.
In conclusion, as businesses evolve into a phase where customer value is paramount as opposed to merely customer service, they need to reorient their strategies and the discussion so far has shown how to create customer value, one needs to first understand what the customer wants.
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The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
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