Zappos:Happiness in a Box
Theimportance of marketing can never be underestimated as far asenhancing the profitability and sustainability of a business entityis concerned. Indeed, marketing has a bearing in the creation of theappropriate image and reputation pertaining to a company and,therefore, underlining the kind of service and goods that consumersshould expect once they get into a particular business entity. Ofparticular note is the fact that the most effective mode or techniquefor marketing in the contemporary human society remains to be theprovision of excellent customer service. Indeed, this is known togenerate so much interest in the wellbeing of a business entity tosuch a point that not only would the current consumers of the companycome back but they would refer their friends and loved ones to it.Indeed, no amount of marketing would rival the effect of a goodreputation as the later underlines the fundamental element of thebusiness entity in the long-term and the short-term. This explainswhy Zappos, an online clothing and shoe shop that has its currentbase in Las Vegas, Nevada, concentrated on creating consumer valueand providing the most appropriate customer service that would beunforgettable to its customers.
Relevanceof theories of consumer and buyer behavior in Zappos
Theorieshave always been a fundamental component of the contemporary humansociety. They underline a collection of interrelated propositions,definitions and concepts that would allow for the explanation andprediction of situations and events through specifying the relationsbetween variables. Irrespective of the assumptions that theories makeregarding a particular concept or entity, they offer a systematictechnique for comprehending situations, events and/or behaviors(Reyna, 2004, pp. 64). The notion of broad application or generalitycomes as extremely crucial, in which case theories, which are bytheir very nature not topic or content-specific but abstract wouldallow for proper comprehension of the dynamics of business entities.As much as the varied theoretical models pertaining to consumer andbuying behavior may be a reflection of more or less the same ideas,every theory employs a distinctive vocabulary and concepts, all in aneffort to articulate the specific factors that are seen as crucial tothe comprehension of consumer behavior (Vantonder, 2003, pp. 34).Theories will always be different in the magnitude by which they areempirically tested and conceptually developed. Nevertheless,testability of theories comes as an extremely crucial components orfeatures of theories.
Consumerbehavior theories and buying behavior theories, like all othertheories, explain the “why” of a phenomenon. In the simplestterms, phenomenon observations would result in an educated guesspertaining to its causes and the manner in which it works. Theeducated guess, also known as hypothesis, would then be testedthrough experiments and other forms of research, with itsconfirmation resulting into a theory (Kotler, 2009, pp. 76). Powerfultheories will not only explain why something is taking place in oneway or another but also predict what could happen next. Of particularnote is the fact that theories are dynamic, in which case they may bemodified or abandoned as researchers acknowledge their failures andsuccesses.
Theoriesof buying behavior for individuals come in handy to businesses thatanalyze them in an effort to figure out the most appropriate andeffective strategies for persuading consumers to purchase aparticular product or service. More often than not, consumers willfeel the desire to make a particular purchase but go through variedsteps prior to making the purchases. Nevertheless, varying consumersoften come to varying buying decisions on the basis of severalfactors such as environmental elements, cultural influences, as wellas their own personalities (Sweeny, 2008, 66). Theories will alwayscome up with assumptions either pertaining to the environment,industry, business entity or even the individual consumers so as toassist the business entities in crafting the most appropriatestrategies for not only capturing the interest of the current andpotential consumers but also getting them to buy their products andservices. Through the incorporation of assumptions, the consumerbuying theories eliminate the number of factors that the businessentities have to sift through so as to create an effective strategyfor reaching out to consumers (Sweeny, 2008, 66).
Comparingconsumer theories of buyer behavior with business buying behaviortheories
Buyingbehavior underlines all the decisions that businesses and individualsmake in instances where they are purchasing goods and services.Numerous theories have been crafted in an effort to predict, as wellas explain the buying behavior of both individuals and businessesentities so as to enable business owners and managers to come up withthe most appropriate strategic decisions that would address the needsand wants of the consumers.
Oneof the key business theories of buying behavior is the rational actortheory, which states that individuals make their buying decisions onthe basis of the rational analysis of their self-interest in theparticular situation. In this case, it is possible to makepredictions pertaining to an individual’s buying behavior throughan analysis of the course of action that would be most beneficial tothat individual. Similar principles, in theory, would be applicableto the purchasing or buying decisions of business entities or evengroups of individuals. This theory has gained immense support fromscholars who state that individuals who take part in the stockmarkets typically have higher financial literacy levels in comparisonto the average populations. Indeed, studies have shown that investorswho have a higher IQ level have a higher potential for investing andsucceeding in the stock market. Of course, this theory would not beapplicable in all situations. Indeed, there have been questions onwhether financial literacy and intelligence prevent investors frommaking mistakes in their investment decisions. This is notnecessarily the case as there exists evidence that investors thathave a high level of financial literacy fail to make use of theirknowledge in the establishment and development of their own portfolioand may be motivated by other behavioral factors as is the case forlay persons.
This,however, may be contrasted to the process theory of consumer buyingbehavior, which seeks to offer an explanation pertaining to thedifferences between the actions that individuals would undertake intheory if they were rational actors and what they would actually doin practice. The process theory underlines the notion that consumersmake some buying decisions from self-defensive perspectives, whileothers are made from opportunistic perspectives subject to theperception of the buyers of the likely losses and gains. In thiscase, consumers may be convinced to opportunistically purchase morethan they would normally do or even more than they can possiblyutilize or need as a result of favorable bulk price. Business owners,on the other hand, may let a particular opportunity pass them even ininstances where it appears like a favorable investment simply becausethey do not find the individuals that are trying to sell it to themtrustworthy (Lilien&Grewal,2012,pp. 46).
Nevertheless,the Dual-Process theory seems to combine the rational aspects ofhuman beings and their intuition. Indeed, the theory embraces theidea that consumer and business buying decisions may be motivated byboth cognitive and intuitive processes. As much as the dual processtheories come in varying forms, they all agree on the differentiationof two fundamental processing mechanisms. First, there is thenon-conscious and speedy process that is linked to intuition (Burrow&Bosiljevac, 2009,pp. 54). The second process is conscious, slow and controlled. Inmaking purchasing decisions, it is common for individuals to beinfluenced by biases and heuristics such as representativeness andframing, which are more or less connected to the first process.However, the second process would intervene and improve the decision.This does not undermine the superiority pertaining to unconscious orsubconscious decision-making.
Howmarketing contributes to Zappos.com bottom-line
Asearlier stated, marketing plays a crucial role in enhancing theprofitability and sustainability of a business entity in theshort-term and the long-term. Indeed, marketing comes as a crucialeffort for obtaining the attention of prospects, winning customersand even building product service and demand. The marketing effort ofa particular business entity amounts to the sum total of theadvertising, promotional, sales and pricing efforts that have beenimplemented in an effort to promote or enhance the flow of goods fromthe business entity to the consumers both prospective and current(Burrow&Bosiljevac, 2009,pp. 56). Of particular note s the fact that marketing incorporatesthe possession of the appropriate service or merchandise, theenactment of effective sales programs, the selection of the rightlocation, and promotion of the business entity and its wares to thetarget market.
Oneof the key contributions of marketing to Zappos revolves aroundbuilding the reputation of the company. Scholars have acknowledgedthat the success, profitability and sustainability of any businessentity usually has its basis as a solid reputation. Marketing wouldbuild the recognition of a brand name, or recalling of a product witha particular business entity. In instances where a company hasreached the public’s high expectations, its reputation would bebuilt on considerably firmer ground, which would consequently promotean increase in the sales and expansion of the business (Burrow&Bosiljevac, 2009,pp. 56). One of the ways in which this would be achieved would bethrough the provision of quality products and services. As noted fromthe case study, the company strived to create the most effective andmemorable customer experience through enhancing the speed andsimplicity with which the needs of consumers were catered for. It isnoteworthy that even when the company was a newcomer in the retailingbusiness, it was already collecting the accolades of consumers (Aaker& Leslie, 2010, pp. 2). Indeed, one of the consumers had obtainedhis order within two days rather than the promised two weeks,something that made him so happy that he thought the business shouldat one time venture into the airline business (Aaker & Leslie,2010, pp. 2). This was a reflection of the kind of reputation thatthe company was building within the market, not through advertisingbut rather the provision of best customer service.
Inaddition, this would get the word out regarding the business and itsproducts, which would increase the sales. Businesses succeed only ininstances where they are known to the potential buyers, in which casemarketing has to be used to create service awareness. Once theservice and business entity has reached the radar screens of itstarget market, it would increase its chances for getting consumers tomake a purchase. Once awareness has been realized, new consumerswould start spreading the word about the amazing products andservices that the business entity offers, thereby creating the groundfor a steady increase in the sales.
Marketingcontribution to other companies
Marketingwould also be crucial to the proactive identification of “at risk”customers. This is particularly the case for sensitive industriessuch as food and beverage retailers, as was the case for Starbucks.There had been protests in the 90’s regarding the use of milk thatincorporated some unhealthy components in its coffee (Statman et al,2006, pp. 1537). Through proper marketing, Starbucks was able tomanage the communication interactions through communicating with theconsumers regarding the steps that had been taken to eliminate suchoccurrences in the future, thereby increasing retention. It is nowonder then that Starbucks is the largest coffee retailer in theworld (Statman et al, 2006, pp. 1537).
Inaddition, marketing would result in an increase in the growth ofconsumers. This has particularly been the case for Apple Inc., anAmerican multinational corporation that undertakes the design,development and sale of consumer electronics, personal computers,online services and computer software. Testament to the success ofits marketing strategies in getting the consumers to purchase itsproducts is the fact that its worldwide annual revenue for year 2014as at the end of October 2010 amounted to $182 billion, since itenjoys high brand loyalty level.
Marketingmanagement underlines the business discipline that concentrates onthe practical application of marketing techniques and the managementof the marketing activities and resources of a firm.
Oneof the key marketing management technique is market segmentation,where marketing managers could use warranty cards incorporatingquestions such as household size, education, occupation, annualincome, age and gender, which would then be used in developing theiradvertising and marketing plans. This information would be used increating customer profiles, which will include traits highly commonwith average customers (Rottenstreich et al, 2007, pp. 462). Theywould then design their marketing to target the “appropriate”consumers. This technique comes as extremely advantageous to Zapposas it would be helpful in focusing its marketing focus, developsvarying and more suitable content for every segment, and allows thebusiness to set more measurable and specific goals. However, it comesoff as extremely expensive and time consuming. The surveying ofconsumers, defining the segments, developing the customer personalsand profiles from the research data would be expensive and divertsthe company’s time from other more pressing tasks (Rottenstreich et al, 2007, pp. 464). On the same note, it is evident thatsegmentation may cause the business entity to miss out on crucialcustomers since considerable customer segments may not fit within theset segments. The inability or failure of the business entity totarget secondary consumers would result in significant losses insales (Shajahan,2006,pp. 76).
Onthe same note, Zappos, could use SWOT analysis, where it analyses itsstrengths, weaknesses, opportunities and threats so as to comprehendwhere it satnds in the market. SWOT analysis entails studying thecompany’s internal factors such as strengths and weaknesses, aswell as the external ones such as opportunities and threats, and usethe information to compare with those of key competitors in search ofways in which it could exploit the strengths against those ofcompetitors and come up with new opportunities (Stanovich & West,2000, pp. 656). SWOT analysis would assist the company in uncoveringthe areas in which it may dominate thereby allowing it to positionits services and products well, compete more effectively, as well asdevelop its distinctive selling proposition. In addition, it wouldallow for the identification of the areas in which the company needsto improve. The careful identification of the organizationalweaknesses provides managers with some actionable items on which heor she can focus the improvement efforts with accuracy and precision(Armstrong&Armstrong, 2009,pp. 73). However, SWOT analysis may make managers too reactive toopportunities and threats, thereby making them react prematurely.Further, the inconsistent utilization of SWOT analysis makesmanagement teams miss out on threats and opportunities making theminsufficiently reactive.
Further,the company may use product positioning tool as a marketingmanagement technique. This revolves around coming up with fundamentalsegments of the market that may be under-served and crafting itsproducts to suit those areas. One of the key advantages is the factthat the company may readily pass its higher supplier costs to thecustomers as a result of the deficiency of alternative and substituteproducts in the market (Baker&Hart, 2008,pp. 74). However, this could also be extremely costly as the companywould be facing the risk of changing the tastes and preferences ofthe consumers.
DynamicMarket Practice (Digital Technologies)
Thedynamic nature of marketing practice has necessitated that companiesre-align themselves so as to strengthen their capabilities andperformances in the short-term and long-term. This has particularlybeen with the advent of digital technologies particularly socialmedia. Digital advertising underlines the use or leverage of internettechnologies by business entities in the delivery of its promotionaladvertisements to consumers (Silk,2006,pp. 46). It would include promotional messages and adverts that aredelivered via social media websites, email, banner ads, onlineadverts in search engines and affiliate programs in websites. As muchas Zappos has found its best branding tool to be the telephone, ithas also used the digital media to connect with both consumers andnon-customers (Aaker & Leslie, 2010, pp. 8). Indeed, it has beenusing Twitter to strengthen its culture. Initially the MD usedTwitter in an effort to keep track of his friends but eventuallyrealized the power that the search engine incorporated in theassistance of the strengthening of culture and facilitating theinteractions of workers outside the workplace. In this regard, thecustomers started following the employees, thereby increasing theamount of time that they spent with the company’s brand and,therefore, bringing them closer to the company.
Inaddition, it used Twitter in delivering happiness to its consumersboth current and potential through the tweeting of inspirationalquotes and endorsement to a success that all people could celebrateor even interesting articles that touched on the lives of a widerange of people ((Aaker & Leslie, 2010, pp. 8). This waseffective in getting the company to have numerous followers.
Whilethis is the case, it is always imperative that the company does notlose focus of the fundamental goal, which is essentially profitmaking. Of course, there exists numerous ways of doing this includingthe technique that the company has adopted with regard toconcentrating on making consumers happy after which the profits wouldflow. However, it would be difficult to re-align a company from aparticular facet that is deemed entertainment-focused, to one that issales focused (Sanfey et al, 2006, pp. 112). On the same note, theuse of digital media, particularly social media, has the risk ofmaking crushing down the company in the long-term. This is because amistake of one employee would reach so many people within a fewminutes, thereby ruining the reputation of the company (Stanovich &West, 2000, pp. 656).
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