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Customer orientation

NOVEMBER 22, 2010


in SALES/MARKETING MANAGEMENT
A good mission statement reflects the anticipations of customers.
Rather than developing a product and then trying to find a market,
the operating philosophy of organizations should be to identify
customers’ needs and then provide a product or service to fulfill
those needs. Good mission statements identify the utility of a
firm’s products to its customers. This is the way AT&T’s mission
statement focuses on communication rather than telephones and
ONGC’s mission statement focuses on energy rather than oil and
gas. The following utility statements are highly relevant in
developing a mission statement:

1) Do not offer me things.


2) Do not offer me clothes. Offer me attractive looks.
3) Do not offer me shoes. Offer me comfort for my feet and the
pleasure of walking.
4) Do not offer me a house. Offer me security comfort and a place
that is clean and happy.
5) Do not offer me books. Offer me hours of pleasure an the
benefits of knowledge.
6) Do not offer me records. Offer me leisure and the sound of
music.
7) Do not offer me tools. Offer me the benefits and the pleasure of
making beautiful things.
8) Do not offer me furniture. Offer me comfort and the quietness
of a cozy place.
9) Do not offer me things. Offer me ideas, emotions, ambience
feelings and benefits.
A major reason for developing a business mission is to attract
customers who give meaning to an organization. A classic
description of the purpose of a business reveals the relative
importance of customers in a statement of mission.

It is the customer who determines what a business is. It is the


customer alone whose willingness to pay for a good or service
converts economic resources into wealth and things into goods.
What a business thinks it produces is not of first importance,
especially not to the future of the business and to its success.
What the customer thinks he/she is buying what he/she considers
value is decisive – it determines what a business is, what it
produces, and whether it will prosper. And what the customer
buys and considers value is never a product. It is always utility,
meaning what a product or services does for him. The customer is
the foundation of a business and keeps it in existence (Drucker).

Components of a mission statement

A good mission statement reveals an organization’s customers,


products or services markets technology concern for survival
philosophy, self concept, concern for public image and concern fr
employees . These nine basics components serve as a practical
framework for evaluating and writing mission statements (David)

1) Customers: who are the firm’s customers?


2) Products or service: What are the firm’s major products or
services?
3) Markets: Geographically where does the firm compete?
4) Technology: is the firm technologically current?
5) Concern for survival, growth and profitability. Is the firm
committed to growth and financial soundness?
6) Philosophy: What are the basic beliefs, values, aspirations and
ethical priorities of the firm?
7) Self concept: What is the firm’s distinctive competence or major
competitive advantage?
8) Concern for public image: Is the firm responsive to social
community and environmental concerns?
9) Concern for employees: Are employees a valuable asset of the
firm?
Business Definition

A business definition is a clear statement of the business the firm


is engaged in or is planning to enter. It answers the question:
What is our business, in a precise way . Consider the statements:
We are in the beauty enriching business (Helen and Curtis) We
are in the business of computer technology (Intel) We are watch
makers to the nation (HMT) , we are in the transportation
business (TELCO) . These statements define the space that the
business wants to create for itself in a competitive terrain. They
broadly specify the opportunities that the business may exploit
within that space and the threats it may encounter from rival firms
in course of time, Of course the firm , has to define its business in
a broad way keeping changing customer tastes and aspirations in
mind.

D F Abell suggested defining business along three dimensions:


customers groups (who is being satisfied), customer needs (what
is being satisfied) and alternatives technologies (how the need is
being satisfied).

Improving customer orientation - becoming a customer-oriented


company!

We support you in improving your customer orientation with


• a service concept — conception of customer orientation
• a service check — monitoring implementation
• service training — improving behaviour and attitudes

On challenging markets customer orientation is a decisive factor in providing a company


with a competitive edge in positioning. Accordingly improving customer orientation
as a strategic measure is the key to the development of the company.

For the success of such a strategic initiative it is decisive to follow an all-round


approach. Slogans and superficial behavioural training of the "...What can I do for you"
kind are not enough.

On the contrary, it is important to identify those key factors in customer orientation


which allow the company to differentiate themselves from the competition. This
requires an examination of the company's strategic positioning, the expectations of
target customers/customer groups and the company's own performance.

The starting point for an overall concept of customer orientation is a customer


orientation concept to be developed within the management group. This has to be
activated decisively and implemented within the company with the right measures —
across all hierarchical levels. This makes it clear that customer orientation has to be
regarded as a management responsibility.

In order to really make progress the customer orientation concept has to be anchored
in overall strategy. Processes within the company have to be examined and subjected
to development along the internal customer-supplier chain. Implementation is
supported by suitable monitoring instruments with which the achievement of the
relevant targets can be systematically tracked.

In addition the leadership and feedback system (key data, management appraisal etc.)
should be oriented towards the concept. This then means integrating customer
orientation in the development of executive staff and the workforce, the agreed goals
and recruitment policies.

A tested procedure for improving customer orientation:

• choice of location for customer orientation within the company


• developing a customer orientation concept with the management
• communicating the customer orientation concept — involving the workforce
• integrating the concept in the training of executives and other employees as well
as in HR processes
• developing a measurement instrument (customer satisfaction index)
• measuring customer orientation internally and externally
• defining measures for improving customer orientation
• linking the initiative for customer orientation with the CIP process
• interface workshops for improving internal cooperation
• directing processes in a customer-oriented way
• regular reviews on the status of customer orientation

Customer orientation can very much be regarded as a long-term and complex subject
for corporate development. When consistently and comprehensively approached it
equally covers strategic, cultural and behavioural aspects, as well as operational and
methodological factors. Such a holistic approach is necessary if real results are to be
achieved and provide more than just a few polite slogans on the telephone.