Friday, February 01, 2008

Which customer is more important?

How to recognise the strategic customer is a big challenge for the business managers. Most of the time what we concentrate on are not the strategic customers but the end customers of the product we are producing or the service we are delivering. It is always not easy to recognise the strategic customers.
In the retail industry in developed countries most of the sales to the end customers is though the retails chains (Wal-Mart in USA and Tesco in UK). Now all manufacturers, big or small, need to go through these retails chain to reach the end customers. In this kind of environment, the strategic customer is the retail chain rather than the end customers. A manufacturer can do lot of market research and develop a fantastic product but if retail chains refuse to keep on their selves, no end customer will ever see this product. Sometimes these big retailers are so powerful that they even dictate the size, colour and delivery package size on the manufacturers. In happens even with big manufacturers like P&G. To avoid this pressure, manufacturers wants to become bigger and bigger. This was the motive behind the merger of P&G with Gillette.
Other day, one of the senior professors was given the example of the strategic customers for his latest version of the book. He said that for him the strategic customers are the tutors of the course in the universities around the country (and other part of the world too) because if these tutors will not like the book, they will recommend the book to the students and no matter how good the book is it will not be sold. For this reason, he cannot change the content of the book drastically in new version because all the tutors using his book has slides, questions papers etc and they would not like to update them for the sake of new version. And once the book will drastically change they can even look for other books in the market too because for them it will same when they need to prepare teaching material from scratch. It does kill innovations sometime!
Having said this, it does not mean that the end customers (consumers) are not important. They are absolutely important because if they don’t like the product, they will definitely switch to another available product. So for the business managers, it is very crucial task to satisfy strategic customers and the end customers. Not an easy task always.

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