It is about Customers, Not Products: A Change of Vision

Cor Molenaar

Chapter 7 in The End of Competition:The Impact of the Network Economy, 2020, pp 131-144 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In the supply economy, it is all about selling more. Marketing was used to bring about transactions. There was a competition between providers vying for the attention of customers. Market positions, market shares, sales, profit margins and the distribution channel were important indicators. The customer is the endpoint in the supply economy, as can be seen in the various customer journeys. At the very most, some aftercare is given after the purchase, but this is often regarded merely as an expense. This can be seen in the lack of a contact button on websites, the long queues on the telephone and the lengthy wait for an answer to an email (and sometimes no response at all). Sometimes, this aftercare, the customer contact centre, is outsourced to a third party, which invoices the company for the costs made, such as the number of calls and the duration of the calls. Efficiency is the aim, not the quality of the answer or support. Sometimes, there is no strategy involved in this at all (or this has to be paid for). This approach centres upon a constant battle for the buyer, despite years of evidence showing that it is much cheaper to retain a customer than to find a new one. However, this does not fit in with the supply model and the marketing. Marketing is regarded as a support function that costs a great deal of money. In times of declining profits, companies often look for cost savings in the marketing department, while a countercyclical approach would be better. If sales decrease, it is important that companies focus more on their existing customers. Competition increasingly will shift to one based on the loyalty and strength of one’s customer base. The approach, based on the supply economy, is a short-term strategy whereby companies seek to set themselves apart from the competition. The purpose of marketing can be defined as: creating, communicating and delivering ‘value’ to a target group (Fahy and Jobber, 2015).

Keywords: Network Economy; Supply Chain; Technology; Customers; Marketing; Asia; Platform Strategy; Multisided Platform; Collaboration (search for similar items in EconPapers)
JEL-codes: M31 O32 (search for similar items in EconPapers)
Date: 2020
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