- July 27, 2012
- Posted by: essay
- Category: Sample essay papers
In the contemporary business environment, companies need to maintain the interests of customers to their products in order to maintain high sales rates .However, the modern market is characterized by the growing competition that forces companies to change their strategies and marketing approaches to customers. In fact, today, the competing position of a company is of a paramount importance but a company can hardly achieve positive results in the competitive struggle if it fails to gain the confidence and loyalty of customer. At the same time, customers’ loyalty may lead to a company to progress and guarantee its stable future giving the basic advantage in the competition with its major rivals. At any rate, today, customers’ loyalty is one of the most efficient tools which helps companies to make customers buy their products since the acquisition of products of certain company or certain brand evolves rather into a kind of habit than into a conscious choice of the product to the extent that loyal customers can by products of specific brands, even though they do not need these products very much. However, today, along with customers’ loyalty, it is necessary to develop new effective approaches to customers in order to stimulate them to buy products, especially if products are stocked because of the decreased buying power of consumers and growing saving trends.
In fact, nowadays, customer loyalty is one of the basic conditions of the commercial success of any company. The reason for such a situation is quite obvious and is closely related to the changes that occurred in national and world markets. In this respect, it should be said that the rapid development of the process of globalization led to the fast penetration of different companies in new markets (Breneman & Taylor, 1996). As a result, markets, including markets of such well-developed countries as the UK, faced a serious problem of the growing competition in which national companies should take into consideration not only its traditional rivals but also foreign companies that entered the market.
On the other hand, the situation proved to be quite good for customers who got a chance to benefit from the growing rivalry between various company which naturally focused on the satisfaction of customers needs and interests providing the higher quality of services at lower price targeting the development of a positive customer experience.
In such a way, companies defined customer loyalty as their major priority in their strategic development. In this respect, it is possible to mention one of the largest UK’s retailers M&S which targets becoming the UK’s best and number one retailer (Volti, 2005).
In fact, it was quite a logic decision. The abundance of companies operating in different markets leads to the situation when customers need to deal with reliable companies they can trust to. In such a situation, the role of the brand has increased considerably since customers proved to be loyal to brands they knew and were confident in.
Obviously, the development of customer loyalty gives a company strategic advantage compared to its competitors.
Firstly, it should be said that customer loyalty means stable sale rates since customers traditionally acquire certain products or use services of the company they are loyal to that occurs when customers have positive experience of using the company’s services or buying its products. Secondly, customer loyalty contributes to the enlargement of the number of customers since through loyal customers a company is promoted without direct investments in this promotion (Wilkins, 1999). What is meant here is the fact that loyal customer share their opinion and positive experience they have with other potential customers and of the company manages to meet the interests and needs of new customers, the number of its customers, including loyal ones, increases. Finally, increasing sales rate and growing number of customers contribute to the popularization of the brand of a company. As a result, the company improves its position in the market since the brand constitutes a substantial part of the market value of a company now and often determines the choice of customers in favour of a company. Consequently, the company may increase production and continue the market expansion.
Obviously, the popularity of the brand is a very important factor that stimulates consumers to buy products of the company, which has a renowned brand and which is able to form customers’ loyalty. At the same time, today, companies, including those which have popular brands, need to introduce addition stimuli to make customers increase the consumption of their products because the current economic recession led to the decrease of the buying power of people. As a result, they prefer to save money instead of spending them irrationally (Pine and Gilmore, 1999). In this regard, clothes often become subjects which customers prefer to save their money on. In such a situation, fashion-oriented companies have to introduce effective strategies to increase their sales rates.
In this respect, it is worth mentioning the fact that many companies tend to use traditional strategies to attract customers’ attention and increase sales rates. For instance, one of the most popular strategies is discounting that often leads to the growth of consumption of products which are sold at discount prices. At the same time, this strategy has become practically a norm during the holiday season, when discounts reach their peak, as well as the consumption. In fact, discounting is really effective strategy but it cannot give a strategic advantage to a company over its competitors because practically all companies tend to apply this strategy, especially during the holiday season.
In such a situation, companies prefer to focus on the quality of services to increase sales rates. In fact, many companies offer new services oriented on the larger satisfaction of customers’ needs and interests and minimizing customers’ time they spend on purchases. Hence, today, many companies, including larger retailers, develop e-commerce and online sales which allow them provide customers with ample information on their products and deliver the products in a possibly shorter period of time to ensure the maximum customers’ satisfaction. As a result, customers can save their time as well as costs, if companies provide free shipping of the product.
Furthermore, in order to increase sales rates and to maintain high profitability large retailers tend to increase the volumes of sales by means of the enlargement of the trade space and amount as well as types of products they sell. In such a context, it is possible to speak about the growth of large trade centres where customers can buy any product they want. Moreover, the major goal is to offer consumers products which are difficult to sell at the first turn. In this respect, it should be said that trade centres often use the location of products to attract customers’ attention and make them buy these products. For instance, often products, which have not been sold for a long period of time, are intentionally placed just at the reach of customers, while products that do not have problems with high demand levels can be positioned in the background. In such a way, customers, who are unwilling to spend much time on shopping but products that are directly at their disposal, instead of searching for specific products they would like to buy or they get used to buy. The placement of products being very important can be enhanced due to the use of discounts that stimulates customers’ buying inclinations. What is meant here is the fact that considerable discounts stimulate the growth of customers’ spending, but what is more important, being under the impact of the general agitation, customers can buy products in a hurry without much considerations whether they need this specific product or not or whether this product meets their needs and interests or not. They just buy and, as a rule, they buy the products which are most available at the moment of large discounts.
In addition, it should be said that modern trade centres are the places where customers can not only buy products but trade centres also entertainment centres which are often oriented on children. The latter is very important because many companies and large retailers tend to provoke customers to buy products by means of their children.
What is meant here is the fact that companies use active promotional campaign oriented on children, they make products and pack them in such a way that they draw the attention of children. In general, they attempt to create a positive image of a product which they have to sell to the extent that children believe they need this product above all. As a result, parents often prove to be unable to resist to their children and buy them what they want, though it is actually an effective marketing and promotional strategies conducted by companies that make children want specific products and, hence, influence customers’ choices and behaviour.
Thus, taking into account all above mentioned, it is possible to conclude that, in the contemporary business environment companies use all possible means to increase their sales rates. In this respect, customers’ loyalty is very important since it provides a company with ample opportunities to increase sales and attract a larger amount of customers that leads to the growth and higher profitability of companies and increase of their sales rates. In addition, many companies attempt to use promotional campaigns, discounting and creation of comfortable ambiance along with efficient placement of products to draw the attention of customers and make them buying products. Moreover, often companies focus their promotional campaigns on children to influence their parents’ choices. Finally, companies often use new approaches, including the development of online purchases to increase customers’ satisfaction and their sales rates