November 30, 2017

MANAGERIAL ECONOMICS

Introduction

As the manager of a company, I would value service innovation, increased competition, consumer loyalty, and quality. Faced with the current economic and social reality in which organizations must manufacture diverse products, offer a wide range of services, and maintain a considerable market share by winning and retaining customers, it is essential to value customer loyalty. This is because loyal customers not only consume branded products and services, they also play an important role as brand advocates (Grégoire & Fisher, 2008). When consumers have a close relationship with a brand of goods or services, they share those brands with their families and friends. This word-of-mouth advertising is effective because consumers value the opinions of those in their groups. As a manager, I would reconcile my decisions regarding customer loyalty and product quality by attempting to mold our services to outpace the competition.

Strong relationships contribute to the perception of quality and increase consumer satisfaction and loyalty to the supplying organization. In other words, clients who have strong relationships with an organization are more likely to perceive the services offered as being of greater quality. This causes the customer to see the service provider as the first choice when deciding what to purchase. (van Rijswijk & Frewer, 2010). In addition, these customers are likely to be Hyun, S. S. (2010). more faithful to the organization. Behavioral fidelity, as far as it relates to customers’ consumption habits, represents what most organizations desire. It was observed that consumers moved by this behavioral disposition usually spend more in organizations for which they have a loyalty card. It is, therefore, necessary to distinguish between customers who are loyal to an organization and those who do not develop a relationship with the organization (van Rijswijk & Frewer, 2010).

For this reason, creating a relationship program, such as a loyalty card, allows organizations to distinguish their customers between those who have the highest value to the organization because they are willing to create a relationship that leads to loyalty and those who have a lower value to the organization because they have no demonstrated interest in building a faithful relationship Grégoire and Fisher (2008). The pharmacies and drugstores segment of the market commonly uses the strategy of relationship, loyalty, or fidelity in which the customer receives a card that provides discounts on medicines and points at the register, which can be exchanged for gifts or exclusive offers that are tailored to the customer’s consumption profile. As a manager, I would adopt this approach since it falls within the sales modality of self-service, which allows the consumer to choose products without the necessary intervention of the provider. Markets are constantly evolving, and competition is growing on a consistent basis. At the same time, customers have access to better and more abundant information and consequently, they increasingly demand better services. Today, customers seek quality and value in the services and products they acquire. These high-quality products and services are the ones that lead to satisfaction and customer loyalty Kheng, L. L., Mahamad, O., Ramayah, T., & Mosahab, R. (2010). Hyun, S. S. (2010). It is therefore essential to analyze and improve the tools and policies adopted by organizations in order to increase customer satisfaction and loyalty (Kumar, Smart, Maddern, & Maull, 2008).

There is no doubt that, today, there is a customer-oriented approach that involves the continuous improvement of all products, services, and processes. However, it has not always been like this. Differing concepts and practices regarding quality have been used and adapted throughout the time. At the beginning of the quality was restricted to the tracking and inspection of defects, but today, other concerns include meeting the needs of customers, continuous improvement, quality assurance, and control with the goal of obtaining a total quality system. This new perspective is based on quality management, which pertains to the aim of meeting customers’ needs as well as focusing on continuous improvement and the best results, which involves all.

Grégoire and Fisher (2008) stated that product success depends on the value and consumer satisfaction, where the value is the ratio between what customers earn and what they give. Value is a product’s mode of utility based on the customer’s perceptions of the service quality and understanding of what has been received in relation to what has been given. Value can be increased if benefits are increased, and quality can create value since the perception of quality may increase the perception of value. Satisfaction is a comparison between customers’ expectations and their perceptions regarding the reception of a service. Since satisfaction is related to the client’s expectations, in today’s increasingly competitive market, organizations need to meet and exceed those expectations. This comparison is based on a model of disconfirmation of expectancy. Satisfaction also depends on the perceived value of a product relative expectations. If the performance lives up to expectations, the buyer is satisfied. If a company exceeds expectations, the seller is delighted.

Conclusion

Producing satisfaction is one way to make an organization more competitive. Yet making a customer feel satisfied is inadequate. It is necessary that, in addition to being satisfied, customers feel the desire to acquire the product or service again. In order to achieve fidelity, it is necessary to know clients, recognize their characteristics, and identify their needs and desires. It is with this information that companies can generate proximity to the customer and, thus, gain their trust and loyalty.