Describe about the Case Study of Pegasus Airlines and TESCO?
Needs:
What the Pegasus customer wants more service in terms of social network relationship. In the social networking sites, they provide various gaming options which give their customers additional facilities like free tickets and discounts. What customers want is the better quality of service and nor facilities to be provided.
The want of the customer of Pegasus is that the company must provide safe travelling along with economically affordable price of ticket. The customer wants their airline to provide types of facilities like good food, easy check post etc. Apart from these the customer also expects services that would be time saving without trouble and solving their grievances as earlier as possible.
What the customer demands from Pegasus is low cost of travelling, safe journey and effective services. In order to serve their customer Pegasus provides certain services like E-tickets, communication via internet like messaging or mailing.
Differentiating the needs wants and demands
The needs are what the company must provide, the want is what the customer wants and the company should think of it, and the customer demand is what the company should look after. What customer wants are facilities from Pegasus even without travelling in it. What customer demands and need is the minimum service that Pegasus provides (Shaw, 2007). Safe journey is not only what customer wants but they also need to have a safe journey.
The implication of need wants and demands for Pegasus practices.
Pegasus is the first Airline of Turkey that was of low cost. They have credit card that reduces their insurance rates. Apart from that they provide Electronic Ticket policy which gives information via text message and email in order to make communication with customers effective.
They provide facility similar to the procedure followed by other flights. Here the customer gets relatively low price cost for the tickets if they book as early as 60 days before travelling. They offer Cards for credit loyalty that help the customers to decreases the insurance rates (Pegasus.co.uk, 2015).
Amenities such as Hotel partners, parking facility, discounts & offers, in plane bulletin, etc are also provided. Their main aim is to provide efficient hospitality with their potential customer crew.
They try to maintain relationship in Social networking sites in order to remain in touch with their customer for efficient CRM and increasing customer loyalty.
Pegasus provides all kinds of supplementary, like an operation of one class interior configuration where the customer can pay small premium price. 10% discount to passengers of International flights. It has Pegasus Flying café where a various range of refreshments are available.
Production Concept:
This is one of the earliest forms of notion in business marketing .This perception is based on the fact that customers prefer only those products which are economical in price and are available widely. This type of concept is thriving in almost in every developing country, where the prime concern for customers lies in acquiring more form the product than in its features. Pegasus has a yield management strategy for pricing of tickets, where those who books the flight 60 days before they receives savings (Glowed & Smyczek, 2011).
Product Concept:
According to this concept the customers favor simply those services and products which present the increased quality, effectual performance or possess innovative features. Like the system of Pegasus electronic policy is well appreciated by the customers. This can be considered as one of the quality of Pegasus Airlines.
The Selling Concept:
The selling concept of marketing is based on the reality that the businesses and the customers, if left unaided, will typically not purchase sufficient amount of the products. The company should therefore carry out an adamant promotional and selling strategy. The Supplementary provided by Pegasus along with their travelling service proves to be efficient strategy to attract more customers.
The Marketing Concept:
The marketing concept is more effectual in the communication, deliverance and creation of standards to its target customers and in the success of managerial objectives which also helps to have competitive advantage over others. The Marketing Concept focuses mainly on the requirements of the customers; Pegasus is one such company who are truly customer focused and loves their customers. They have provided various facilities for their customers.
The Societal Marketing Concept:
The concept of societal marketing is that the role of the business group is to decide the wants and necessities, preferences and tastes of the target market. Pegasus has partnership with hotels and they also provide parking facilities to their customers, this idea was initiated after conducting various surveys and getting customer feedback.
The value created by Pegasus for its customers is that they promote well being of all. They provide integrity in their service, q good quality of their products and services, on time delivery valuing the time of their customers and provide a safe communication (Pegasus.net.au, 2015).
Pegasus is likely to continue being successful in building a good customer relationship because Pegasus service and product is totally customer oriented. They provide service and products according to customers’ needs, wants and demand. Because it ensures successful service, engages creative communication policies and uses efficient management techniques (Customer Relationship Management, 2011).
A: the general 5 steps in buyer’s decision making are (Pride and Ferrell, n.d.):
According to the above process of decision making of customers, the first three stages are considered when a customer faces a complex or new situation of purchasing (Otnes and Tuncay-Zayer, 2012). But Porche is already a known and reputed product among its customers. Due to this reason customers skip the first three stages they decide to purchase form Porche followed by the next stage of post purchase behavior.
The basic difference between a Porche model and Cayenne is that Cayenne is a crossover mid-sized model which has 5doors and 5 seats utility sports vehicle where Panamera is luxury car of full sized which has fastback 5 doors (Porsche AG – Dr. Ing. h.c. F. Porsche AG, 2015). These differences makes the decision making process of marketing different. In that case the first three steps are applied. Both the customers of the companies have the same need recognition but at the second step, they already know about the product. In third steps the customers prefer new models over old. Porche is one and only automobile which is highly distinctive. Finally the fourth step is followed by customers of both the companies (Taneja, 2010).
In order to Change the buyers decision making process Porche had differentiated their products. The process of adoption defines the achievement of Porche for its high scale within a certain time.teh adoption process starts with first hearing about the product till final adoption. At first the consumers becomes well aware of the models then they learn about its new features. (Hall-Geisler, 2015) Thirdly they assume about the worth of trying the product and fourthly they take a trial. After trying the products the consumers adopts the models, which ultimately results in good sales for the models.
In Porche the negative attitudes are the production image becoming numerous but not niche, and the higher price availing certain people to buy (Hill and Jones, n.d.). The Positive attitudes are the separation of upper and lower class for the Upper middle class section and to maximize the utility satisfaction and create exclusivity.
Porche manages to keep both positive and negative attitudes in balance and emphasizes over the image of high performance due to its known exclusive worldwide brand name and feature.
If the customers of the cars are divided into two groups then there are the Upper class people who belongs to high income group and high social status and the other group will be people with low income and from lower social status. Since the beginning of production of exclusive cars, Porches target customers had been the upper class. If the prices do Porche were affordable to everyone then it would have destroyed the high social status of the brand which can be considered as negative attitude of the upper class (Leffingwell, 2011). Instead of doing that Porche aims for a very narrow section of people who are financially successful as due to high quality the price is high. Without any argument or criticism Porche creates a brand of uniqueness and exclusivity and elevate their buyer under their own class category.
The John Lewis brand means as one stop that gives almost every type of product that a customer is looking for. It also means that the quality of the products of John Lewis is distinguished for their customers. They claim that their customers are well acquainted with the fact John Lewis doesn’t compromises with the quality of their product (Cook, 2015). The service quality is also a remarkable feature of John Lewis as the customers are attracted with it song held promise that assures “never knowingly undersold” by rivals. This is due to the ownership structure in John Lewis (JLP Careers, 2015).
This brand is strength during tough economic conditions of the high street as because the customers are loyal to its quality and product availability and services (Themarketer.co.uk, 2015). That is why in the first half of recession the company was able to hold the loyalty of its customers.
What John Lewis is actually selling is their unusual ownership structure. Even the outsiders agree that the structure of the organization had played a major role to it success. The ownership also provides a strong and effective customer service (Knowledge, 2015).
The Service is the core product that provides after sale service and good customer service where they are known for being the best advisor to their customer. The Actual product is the availability of various ranges of product at one stop and the augmented products are the warranty of their product (Blythe, n.d.).
John Lewis requires expanding their business in global forum which would generate higher revenue for its sales. This can be achieved with partnerships with known brands. John Lewis needs to bring their brand closer to their customers. They need to have better partnership with brands but then there is a fear of disagreements. Thus it would be better for John Lewis to go for companies that would support for a long run. Presently with its idea for expanding their business in Europe, Victoria Gate seems to be a better place for its expansion.
The Lewis model can be very much applicable for the public sector employees (Baxendaleownership.co.uk, 2015).The Lewis business model provides to its employees a part ownership to its company, a share of its annual profits. The department of British Government has become an emblem of new capitalism according to the politicians. The Staffs of John Lewis gave an effective lesson to the police of the British Government in order to be more considerate and professional while dealing with crime witnesses and victims. It is difficult to establish the John Lewis model in public sector but it is not impossible (Cave, 2014).
Following the Lewis model hospitals can be like a John Lewis shop but there are certain limitations. The shares can be distributes to the employees of a hospital but that is not because the employees should have the thought of becoming affluent. The sole purpose for shares being distributed to the employees of a hospital should be to have control over the organizations. The Lewis model is an initiative for employee engagement. Thus such kind of employee engagement is very much required for hospitality sectors which majorly depend on Service.
If the service is considered then service provided in John Lewis shop and in a hospital differs. The services provided but John Lewis is not a compulsory part for the customers whereas the service in a hospital is a compulsory part. The customer of a hospital needs a good quality of service for his survival and good health. If a hospital follows the John Lewis shop style structure then it might turn out to be difficult for a hospital to survive.
Generally in hospital the profit earned is not used for benefit of the shareholder but for investing in the business. The profit dividend is not shared among its shareholders (North, 2014). There are systems of providing incentives and bonus which is considered sufficient for employee motivation. In john Lewis, 69,000 staff owns John Lewis, Green Bee and Waitrose (nibusinessinfo.co.uk, 2015).
Providing ownership to the staff of a hospital would result in low generation of fund. It is because the staff would receive dividends as a part of their profit or share but they would not easily invest for the organization.
Cohen’s intention of Pile them high and sell them cheap is a strategy of Selling products is offers like Buy One get One free etc. what the Big Price drop campaign assured its customers a price cut over 3000 essential products across their stores making the consumer shopping cost more cheaper. This was one of the promotional strategy of TESCO that had brought over 500 million Pound in their fund. Cohen’s motto was successful with the big price drop as it also followed the strategy of pile them up and sell them high.
Tesco understood that the consumers are more attracted to low price availabilities and for that they started introducing various schemes like free offers on essential items then offering other types of accessibilities etc. It was clear that Tesco wanted to recycle wastage but then after being criticized they changed the offers from buy one get one free to buy one get one free for the next week.
In providing additional offers TESCO found that typical consumers goes from supermarket to supermarket looking for the best deals, so what TESCO reduced gross costs for their consumers in supermarket.
The Club card system is a kind of loyalty card where points are earned after continuous purchase of items from Tesco. Using the services the customer earns one single point for every 1 Euro. The card holders can also get extra points on special offers (Loyaltysquare.com, 2015). These Club cards help the manager in developing pricing strategies like:
The club cards help the managers to understand the general tendency of expenditure of the customers. This means they can estimate the average money spend by their customer for their products. This helps them to set their product prices which come under the budget of their customers.
Since 1919, the biggest successful pricing strategy had been the Club card. It is so because not only it created a loyalty among its customers but it also helped the managers to find the customers need and understanding their wants. Tesco had been one of the foremost companies to introduce club card system. It started with the investigation of potential loyalty of the customers of Tesco.
The scheme was designed and launched in 1990 which finally made a big impact to its customer. This was the most effective price strategy of Tesco since 1919.
When Tesco introduced a price strategy the big price drop, it introduces a £5 off with a £40 voucher where the tagline suggested that it is a way of showing gratification to their customers. Their competitors criticized this strategy as a short term attention-grabber. To this concept Cliona Lynch an analyst of retail stated that Tesco will focus on Quality and variety (Sarbah & Sarbah, 2010). This is because the pricing strategies are no more competitive and innovative to compete in the market. No recent strategies have brought enough change in the sales and revenue pattern. So now for Tesco improving their variety of product range and quality should be prime target.
Price deals had always played a big role for promotional strategies for any retail market. The retail market has to survive with changes in the market and cut-throat competition with its competitors. The retailers had to find out daily promotional strategies in order to compete. Price deal is the most effective promotional strategies. Tesco definitely needs innovative strategies but the price deals should also run parallel. A number of multinational retail and grocery are growing and thus the survival of Tesco would not only lie to its customer’s loyalty but also how far Tesco can move to create attractive price deals for its customer (Lambard, 2014).
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