Lecture 7 Customer Empowerment Flashcards
What are the two main forms of empowerment?
Individual perspective- as a choose with personal notions of value, in pursuit of happiness and well being
Social perspective- as a citizen with influence on social and cultural impacts of markets, marketing and consumption
What are the ethics that support customer empowerment
Ethics of customer sovereignty Ethics of non malifence Ethics of social justice Ethics of human development and quality of life Ethics of stakeholder theory
What is customer empowerment?
The subjective experience of control over ones choices
Links to customer sovereignty
What are the conditions of customer sovereignty
Perfect competition Complete information Inclination- the ability and skill to gather and evaluate information Access to options and choices Adequate time
What does customer sovereignty consider?
Anti trust- policies discouraging monopolies and encouraging competition
Consumer information- policies encouraging consumers to acquire and process information about the quality and price of competitor brands
Customer fratility- policies to help customers understand quality price attributes
Globalisation- policies to enhance and preserve globalisation
What factors have caused growth in consumer power? Urban (2005)
Access to more independent information on companies and their products
Easier comparison- price spy, go compare
Access to more suppliers
Information on company and brand citizenship
Control exposure to marketing efforts e.g ad block
What are the business responses to customer empowerment
Amplify traditional push pull models of marketing
Strengthen relationships with customers
Embrace customer advocacy- become a faithful representative of customer interests e.g John Lewis
What is bakers definition of customer vulnerability
A state of powerlessness that arises from and imbalance in marketplace interactions
Occurs when control is not in the individuals hands, creating a dependence on external factors
What are the primary reasons for disempowerment
Physical restrictions
Social restrictions
Psychological restrictions
What are the external reasons for consumer vulnerability
Structural restrictions
Financial restrictions
Stereotyping and discrimination
Unfair, misleading and deceptive marketing
How can customers be protected
Policies to decrease risk and threat of harm
Protection of children, young and elderly
Policies to increase consumer choice
Customer information/ education policies
Policies concerned with deceptive marketing should be based on an understanding of what makes people vulnerable
What does George and Lenard (2007) say?
Public policy and company practices frequently fail to address the nature of customer vulnerability either treating them as homogenous or vulnerable by definition
Markets evolve so rapidly many struggle to keep up with change e.g 33% of over 60’s are interested in smart home tech but don’t fully understand it
Designers and producers have a tendency to place their own needs above that of accessibility and use ability
Been a ratcheting up of customer expectations, expected to make more decisions often with no clarity of the product
Marketers frequently target typical consumers
Companies often use price discrimination to cherry pick customers
Need a more thorough understanding of customer vulnerability
What does urban (2005)! Say about customer advocacy
From consumer reports to third party information customers have more access to information
Old style marketing has become less effective
Consumers can research company claims
Simplified transactions mean lower switching costs
Prospective consumers can find out if a company has mistreated customer
Global reach for the disgruntled
Push messages are likely to earn ire of customers than profit
94% distrust pop ups
30m installed ad block
50m signed up to no call protection
What does survey (2008) say
By the same token, customers collective action of buying goods at the lowest prices serves to weed out firms that are not cost efficient or produce high quality goods
Tell me about tripadvisor
Over 190,000,000 reviews
6-12 review read before people decide to book
Tell me about Martin sknelli
Bought rights to Darapim and raised the price 56 times the original value
