Tuesday, January 03, 2006

Marketing Theory: Pros and Cons

One of the main issues of consternation these last few years, has been my didactic arguments over the values of Marketng Theory, and it's areas of weakness.

One of the issues that had really consterned me, at one of my previous positions, is how they seemed to be out of touch with their customers. And as I am reading different MBA books these days, it seems to me there is a clear confrontation between the two different perspectives.

Marketing Theory indicates that, the best way to make decisions regardin promotions, packaging and sales was thru segmenting the prospective/current customers into their different demographics and analyze how the best path to encourage new and repeat sales.

However there are several holes in that theory, that will become obvious as I continue to tell my story.

Company X, continued to look for new sales and promotions to advertise, based partially on inventory, to indicate which items we needed to get rid of, and partially on finding the next hot new item, that our customer would want.

However, basing our promotions on those two sounds well, but what if your customers, have certain expectations of the online/offline store inventories that are not being met.

For example, when you go to a Paint Store and they sold lots of nice varying colors, but none of the basic colors were in stock, nor were there any brushes. For each industry there are some basic items, that customers expect you to keep in stock. Because they don't always visit the online/offline stores for new items or what's on sale. Sometimes they need a paint brush, and if your a paint store, and they don't find what they would naturally expect you to carry, why would they come to you again?

I am not saying to not analyze your customer base, what products hot n not, shape your promotions on inventory. But if you don't plan to cover the bare essentials a customer expects you to have what's the point?

You can have the highest sales, but still be losing repeat customers. Because although they may have bought during a sale, why would they come back again, unless you had what they needed and expected from your type of retail industry.

And yet, Company X, would rather not be in contact with the customers directly, to hear what they thought. It's not easy, and this isn't simply about blaming, but how we as an ecommerce/retail industry can make sure we're delivering good service, products and even more importantly a good experience.

Mark Hurst, of GoodExperience.com, has been one of mailing lists, I read weekly/monthly, he has been a fount of common sense, and good advice. He talks and re-emphasizes the importance of delivering a good experience to the customer.

It sounds complicated but it's not.

You have to really understand your customer, to help provide them what they want. You can suggest new things, trends and changes in products and services. But if you aren't deliverying what they'd expect on a daily basis, very well, why would they bother with you?

This reminds me of an earlier experience I had in Company Y. I was working in a Mail Order Department of a Video Game Used/New Buy/Seller. They had 1 central warehouse at their headquarters. Other departments if they had a connection to the upper management, got priority in inventory.

Let's say I took an order on Tueday.

I am waiting for the order to ship, but the last item in inventory was taken by someone in another department on Friday, even though I had already an anxious customer awaiting their order.

Inventory is a very key aspect of ecommerce, if not managed wisely, it will manage you.

For example, imagine making a huge online/offline promotion of a new product, only to find out weeks later, that inventory is out of stock, or didn't place any orders or enough orders for supply.

If ecommerce is gonna become a stable industry, we must become a well-oiled industry of best practices...

Well that's been what's on my mind...

Think about it.