The Customers Has Escaped

Traditional go-to-market strategies don’t work because they assume customers will stay in the channels that were designed for them. Time for a fresh look at how

shoppers really behave.by  Nunes, Paul F. and Cespedes, Frank V.

Article Summary

Previously, customers used to accept and receive advice on the size, style, or purpose of a product from the store sellers.

They always make the decision to buy almost immediately.

If they were looking for personalized service, they chose stores that offered it and paid premium prices for it.

Article Summary

If they were bargain hunters, they would find out no-frills shops, and they would wait for the sale of the products was made.

Now the trend has changed, today’s customers are searching and looking for information and channels that will help them to buy products cheaper.

The channels that the customers used can be through a catalog or called a travel agent for advice about airfares.

After comparing the price, the customers will then either bought the tickets on-line or purchased them directly from the airline to get a better price.

The result is that companies are left with “stranded assets”—physical and organizational capabilities, typically developed at great expense, that become more useless by the day.

Article Summary

It also results in having highly trained but underused salespeople, lightly trafficked retail floor space, and obsolescing inventory dedicated to displays and immediate fulfillment.

Forrester Research analysts suggest that half of all customers now shop for information in one channel and choose to buy from cheaper channels.

This situation happens in both consumer goods and B2B markets.

Article Summary

This situation is not new for the companies. They should be rethinking the core logic of

their go-to-market strategy. They need to adapt and redesign the

channels in order to capture targeted demographic segments and support unfettered buyers’ behaviors.

Article Summary

Customers did, in fact, tend to stay reliably in their boxes.

They tend to repeat their purchase from the same channel only if the channel provide some additional values to them.

For example, the company creates a set of product and service components that customers were thought to value and best suit their needs.

Thus, a channel that served demographic groups with little discretionary income offered a fairly stripped-down combination of goods and services, resulting in having difficulty of finding knowledgeable salespeople in a discount megastore.

Article Summary

A channel designed for busy, affluent customers charged higher prices but threw in “freebies” like fittings and personal advice and product testing.

As a result, company strategically subsidized a few components of the buying process that added particular value to maintain a more attractive value proposition than its competitors.

Article Summary

Previously, Merrill Lynch and other money managers segment their market based on demographics.

They separate sales channels for young, technoliterate customers and older, high–net worth customers.

The transaction costs for the older customers were higher on a trade-by-trade basis, but those customers had free access to research and advisory services.

Later on the older customers group adapt by taking enough advantage of the company’s advice and research, then making trades elsewhere on the cheaper channels.

Article Summary

Customers have become detached from the channels that used to claim them.

They have become more adversarial shoppers, hunt, and search for better deal more aggressively.

Moreover, customers become more sophisticated about how companies market to them. Therefore, they’ve become more strategic.

For example, studies have shown that holiday shoppers tend to buy later and later with each passing year, factoring in the probability of eleventh-hour sales.

Article Summary

Finally, customers are better equipped with information and technology to make advantageous decisions.

They can company companies’ products’ quality, availability, and prices via on-line price searches

Moreover, they also gain access to experts in virtually any field.

Article Summary

Meanwhile, channels have proliferated. The marketer has to adopt by increasing their own

channels through Web sit and catalog. Nevertheless, we can still see the expansion of new

channels and the former channel in consumer banking.

The industry saw not a shift of transactions from one channel to another, but an explosion of transactions in both of them. In the past decade, the FDIC reports, the number of bank branches in the United States rose by 29%, right alongside increases in on-line banking and ATM use.

What I thought of the Article?

Article's writing style The authors tried to show to the reader that

there is the change in the trend of consumer’s buying behavior.

Therefore, they took the example of the previous trends to show what, how, and why the consumers make their purchasing decision.

They also provide the examples faced by many industries and how they try to solve the problems.

What I thought of the Article?

This article has been written in a good logic by separating the information into three paragraphs.

Each paragraph has been given both the examples and how the company tries to cope with the changing trend.

What I thought of the Article?

However, the language and the vocabulary that the authors used is a bit difficult for the reader to understand.

They may improve this article by using less fancy vocabulary in order for the reader to understand the message that the authors tries to send to the reader.

What I learned from it?

From this article, I have learn the past trend of consumer purchasing behavior through the fixed channels, which is controlled by the company.

The consumers are also loyal and do not tend to change or bargain for better price as long as they are satisfy with the company’s product.

What I learned from it?

However, there is the change in this trend that affect the company a lot.

The consumers are looking and searching for better deal either through Web site, catalog, or shops. They do not stick only to one source of marketing channel like before.

What I learned from it?

As a result, the marketers of the company cope with this changing trend by adapting, changing, and increasing the company’s channel into Web-based channel, catalog, and etc.

They also need to try to reduce the costs and expenses in order to be competitive with other companies.