The aim of this report is to create an understanding of Customer Experience and its associated factors, and to examine the possible measures that can be adopted to enhance this experience by engaging more with the customers. In this process, the organization under scrutiny will be ‘Unilever’, which has its headquarters in the UK. The article will engage in a critical analysis of the organization’s quality processes, and examine its effectiveness in meeting the customer requirements. The article will also attempt to critically evaluate a range of factors that determines the customer value. A proper assessment of these factors and addressing them accordingly and taking adequate remedial measures would help to maximise the customer value. Customer experience refers to an interaction between the organization and its customers through a number of touch-points, thereby enhancing their relationship and the business of the company (Lemon and Verhoef 2016).The bond is strengthened through various agencies like media, web, and direct interaction, maybe over the telephone. Thus, customer experience encompasses actions that helps to improve customer value and meet their requirements. Since the area of discussion in this paper is based on the company ‘Unilever’, a brief introduction of the company must be provided here. Unilever is the world’s largest consumer goods company with its business stretched across 190 countries in the world (Fisher 2018). It has its headquarters in London, UK and Rotterdam, Netherlands. It was founded in the year 1929 by a merger of the leading British soap makers ‘Lever Brothers’ and the Dutch margarine producer ‘Margarine Unie’ (Steenkamp 2017). The name ‘Unilever’ indicates a combination of both these names. With its product ranging across Domestic Care, Personal Care and Food and Refreshments, it owns more than 200 brands on a worldwide basis, all of which, together deals with an annual revenue of around 62.5 thousand billion US dollars at present. Currently, it has a net income of around 7.5billion US dollars. With a worldwide customer base, Unilever is always proactive towards enhancing their customer value and offering them with newer varieties of products. Some of the major brand names owned by Unilever are Dove (Body Soap), Lipton (Tea), Knorr (Soup), Kwality (Ice cream), Surf (Detergent), and many more. The article would try to explore the arena of customer value and customer requirements with the help critical theories involved in this discipline, assessing the possible measures that can be adopted to improve its business.
Definitions and Differences:-
Both ‘customer value’ and ‘customer requirement’ emerge from the same core concept of customer experience management, and assessment of the quality of services offered and actually provided to the customers. Also both of them apparently appears to mean the same. However, there is marked difference between the two.
CUSTOMER VALUE – It refers to the amalgamation of both quantitative and qualitative benefits which the customers receive from the purchase of a product. It has got two aspects to it – desired value and perceived value (Leroi-Werelds et al. 2014). Thus the evaluation takes place based on the difference between the total benefits received by the customer to that of the total investment made by the customer for the benefits he/she had expected. The yardstick is usually how much the benefits exceed the investments. These benefits can be in several forms, like the quality or quantity of the product, the post-sale service benefits, the warranty, the cost for repairs or deliveries, customer-friendly attitude, and the like (Kumar and Reinartz 2016). Similarly the total costs paid by the customers are not limited to the financial expenditure. Besides the financial aspect, it involves an accumulation of time, energy and thought spent by the customer for buying that product. The defining attributes of customer value involves certain key features like the how much the product conforms to both the standards of the industry, its brand value, as well as the customer expectations. This also takes into consideration the choice of products, its price, brand, the value added services and the establishment of customer relationships.
CUSTOMER REQUIREMENTS – This can be defined as the total expectations of the customers from the product and its associated services/benefits. This includes the characteristics or the specifications of the product that is deemed fit and desirable by the customers (Ellis 2018). This also takes into consideration the satisfaction of the customers. Customer Requirements can be of two types – Service Requirement and Output Requirement.
Interrelation:-
Customer Value goes hand in hand with Customer Requirements. It refers to the taking of necessary steps to meet the satisfaction of the customers. In order to meet the demands of the customers, a company must modify its internal chain of action, which includes sourcing, operations, processing, marketing, sales and adequate customer services (Brito 2016). Besides taking care of all these internal aspects, a company must ensure that all these aspects ensure the establishment of a proper connection or relationship with the customer. This is ensured when the perceived value comes close to the desired value for the customers. This value refers to the benefits offered by the company or its products to the customers. Loyalty and reliability of the customers are also important in this case (Kaur 2016). This, in turn, depends on certain key features like – the functioning of the product, the points of difference from its competitors, how it offers better quality and service than those, attaching a brand value to it, adopting correct means of marketing by projecting the evaluation of the price based on the quality of services offered – all these, along with the existing goodwill of a company like Unilever, can help in ensuring the satisfaction of the customers. The deliverance of value to customers, in relation to their requirements, can also be explained in the form of a short cycle of activity – Discovery of adequate opportunities pertaining to customer value, creation of a fair market offering, delivery of the value, communication of the value (Osterwalder et al. 2014). Based on this communication, the customer feedback is to be received and again the cycle continues.
Customer Value (Unilever)
There certain interconnected determining factors that goes in to the optimization of customer value of Unilever for a better business of the company:-
Customer Engagement – This refers to the engagement of customers with a company in a structured manner, encompassing the work ethics at different levels of the organization (Jaakkola and Alexander 2014). Unilever engages with its customers via the various online platforms to create strategies which they can implement and produce in future. This, in turn calls for an understanding of the variety of customer by charting out an efficient customer segmentation. Customers can be segmented on several basis like Demographics, Geographical locations, Gender, Financial Status and Psychographic elements (Brito et al. 2015). Unilever makes adequate use of all these dimensions in segmenting their market, based on which the customers are engaged and products are developed accordingly. For Unilever, segmentation and customer engagement is also done based on that of the four broad categories of products:-
PERSONAL CARE: The target customers of this segment are developed along a line of different brands. For example, the target of Dove soap is a group of existing customers, whereas Lifebuoy targets a developing market all across the globe. The premium skin care segments is aimed more at an affluent class of people (Steenkamp 2017). With a wide range of products ranging from soaps and deodorants to oral care, this segment fetches has a huge customer base and deals with a high rate of operating profit of 48% of the company’s total revenue.
HOME CARE: This constitutes the major business part of Unilever and caters to a customer base of different classes of people. They are priced at a cheaper rate primarily for this purpose, and this strategy turns out to be masterstroke for Unilever. This allows the possibility of widening their customer base. Domestic Care products mainly includes powders, detergents and a number of products means for cleansing (Nacchia and Massaro 2017). Some of the major brands are Surf, Domestos, Omo, and Comfort. 19% of the company’s total turnover comes from this sector.
FOOD: The target market of the food items produced by Unilever spans a cross both developed as well as developing nations. The quality being maintained, it provides items primarily for everyday household use like Knorr soup. The revenue generated from sale of such items are growing at a huge rate, of about 6-7% per annum. The major food items used on almost every household on regular basis are those of soups, sauces, mayonnaise, cheese spread, and snacks (Dacosta 2017). This segment also provides food items to hotels and restaurants for professional use.
REFRESHMENTS: This segment caters to both everyday as well as occasional use for different financial classes of customers (Do 2016). The widespread use of Lipton tea across various households can be a case in point, and it is marketed accordingly as a household item. Conversely, expensive items like Magnum Ice Creams are made chiefly for the comparatively more affluent customers.
Value Proposition – Unilever’s value proposition mainly lies on its identity as the provider of quality consumer goods at reasonable price. Its large-scale distribution allows it to maintain the low cost without having to sacrifice on the quality of its products (Kostelijk 2016). Besides developing countries like UK, USA, Netherlands, and Ireland, it also caters to various developing countries around the world. This wide coverage provides a strong brand image for Unilever, thereby driving up its scales. Besides, Unilever is also the owner of a large number of brands which has their own significant value proposition. The price range of each of these brands varies from expensive to inexpensive rates, nevertheless providing high quality of products which are designed effectively and priced in such a manner that allows Unilever to make profits from various sections of the society (Morioka, Evans and Carvalho 2016). Thus the customer experience is enhanced, more so due to a strong brand image that helps to evoke a deep emotional connection with the customers.
Customer Relationships – The business of Unilever is hugely driven by cultural motivations, mainly based on the country where it works. Unilever makes use of this cultural aspect in developing innovative marketing approach and promotion of its products in a likewise manner. It heavily makes use of the platform of website and social media for this purpose. In this process it adheres to the changing trends of the respective culture as well as that of the digital marketing platform, and tailors its marketing strategies accordingly (Trott and Simms 2017). Sometimes, it also works in collaboration with celebrities and other media personnel for the purpose of brand promotion (Dodrajka 2015). This helps to strengthen their relationship with the customer and enhance their brand image. However, it must be noted that the customers usually acknowledge and appreciate the brands under Unilever by their names. The name Unilever is hardly named by them. Thus, inadvertently they raise the scales of the mother company, enhancing the brand equity of Unilever in the garb of several other brands. In this way, Unilever, with its shadowy yet all-pervading presence, establishes a healthy relationship with a wide range of customers both nationally as well as internationally.
Channels – In order strengthen the brand equity, Unilever makes use of a multi-national approach. However, these channels are hugely culture-specific and depends on that of the country where it is operating. It maintains good trading relationships with multinational customers for the purpose of physical retail. For business in developing countries across the oceans like Thailand and India, small traders are accessed through the distributors. As mentioned above, the digital marketing platform, along with E-commerce facilities, sometimes through online sites, also proves favourable (Salvioni and Bosetti 2015). Thus, the company makes well use of the modern technological advancement to meet its targets.
Customer Journey / Customer Journey Mapping – This is one of the most efficient tools for maintaining a high customer value. This refers to a series of interactions between the company and its customers, based on their segmentation. This process is simultaneously followed by an assessment of the customer’s journey with the company towards a better living. The journey map helps to identify and address the touch-points preferred by the company and develop their products accordingly (Westerman 2017). It also helps to anticipate the demands of the customers and the interactions that they would be able to establish with the products. The final objective of this mapping is to assess the maintenance of goodwill of the company with respect to those interactions. It depends heavily on a study of the observational data received as customer feedback for over a period of time. Through various pathways, Unilever engages in obtaining a holistic as well as detailed view of its customer journey. It engages in constant interaction with its customers through the various channels, as mentioned earlier, and attempts to learn the various points of value that matters to the customer. It also studies the dimensions along which those values are perceived. Then the company tries to develop a market based on those points of value, at the same time, identifying opportunities for creation of new value propositions. Thus after, analysing the desired need of the customer, based on an observation of the customer’s environment and lifestyle, along with changes in them, Unilever proactively engages in delivering more than the required value, which helps to give the company an edge over its competitors (Ganguly, A., 2015). The company does so by taking the customer feedback into consideration and experimenting with a combination of the current resources and capabilities. Thus, customer journey mapping helps Unilever to optimize their customer value and improve customer experience.
Based on the above value judgement, a critical understanding of the customer requirements of Unilever, and the company’s efficiency in meeting up to those demands may be studied. An assessment of the present state and future prediction of customer needs and behaviours helps to enhance the customer experience. The large-scale area of operation of Unilever allows it to meet the requirements of its customers on various levels. However, Unilever engages in certain common methods assessing the requirements of the customers and shaping their business trends accordingly:-
A critical understanding of Unilever’s quality processes and its efficiency in meeting the customer requirements take into consideration a well-defined ‘Customer Analysis’. It is a systematic way of defining a target market and trying to understand their needs. The segmentation of Unilever’s market helps to address this phenomena. This helps Unilever to address the issues of product development, pricing, brand promotion and sales in a strategic manner. This takes into consideration certain key features like Customer Expectations, Customer Preferences, Customer Persona, and Cultural Context.
Customer Expectations
These are the basic idea that the customers form about a particular brand, its services and products. Ability or disability to meet up to these expectations by the company shapes the customer’s opinions accordingly, and has a relatively direct positive or negative impact on the business of the company (Mukiira, Musau and Munyao 2017). Unilever, with its wide array of products in its repertoire, successfully meets out to the expectations of different kinds of customers. There are certain aspects based on which the customer expectations are formed –
Customer Preferences
Customer preferences are the aspects which motivates the customer to decide whether to by a particular product or not. They are complementary to the expectations and needs of the customers and go a long way in shaping the behaviour of the customer in relation to the purchased product, especially in case of Unilever. The preferences of the customers contribute to customer experience through the implementation of proper marketing techniques like branding, development and distribution of products as per the preferences (Dunmade 2017). The major areas of customer preferences and their handling by Unilever may be outlined as –
Customer Persona
This segment involves a risk factor. It is an assumed customer segmentation, which is also based on the demographic structure, which goes in to the formation of efficient market plan. It is a generalized assumption of the actual customer needs, their behavioural patterns and emotional attachments, and associated customer goals set up by the company (Le 2018). This also risks the creation of a fictitious persona such that it adheres to the business plan. However, Unilever, craftily makes use of interviews and surveys to determine the persona of their customer base which helps them to create future plans.
The determination of these personas include a careful and critical consideration of the characteristic traits, the values, needs and aspirations of the customers along with their behavioural patterns expected from them from purchase to final usage of the products. This also takes into consideration the skills, understanding and limitations in terms of usage of the product.
Cultural Context
This involves the lifestyle and shared traditions followed by the different groups of customers. This has a significant bearing on the development and sale of products. Unilever caters to customers belonging to several traditional backgrounds. However, most of its products are commonly used by people from all sorts of culture. Therefore, Unilever finely develops its products some of which are culture-specific, while most of them being universally used by all.
Unilever pays adequate attention to the changing trends of consumer behaviours. By bringing new innovations, the company attempts to develop new products that would enable the customers to use various resources wisely. In this process the company is faced with certain challenges like changes in lifestyles of the people in developing countries. Also the widespread degradation of the environment has pushed the company implement low-cost power generation. Similarly, on the other hand, the developing nations are demanding facilitates which the developed countries enjoy. This puts a huge pressure on the ‘Research and Development’ wing of Unilever, which has expanded over the years and found ways to grow products in a more sustainable manner, without hampering the quality as well as the goodwill of the company (Jansen, 2018). The company is subject to various schemes which ensures the maintenance of safety and quality of its products.
The business model of Unilever has always been driven by a sense of purpose of contributing to remit the challenges faced by the world at different times. They believe this motto as the only way of attaining success. In the year 2009, they launched a programme named ‘The Compass’ which addresses strategies of sustainable growth, thereby looking forward to maintain a sustainable business in the long run.
In a similar vein, the Unilever Sustainable Living Plan was established in the year 2010 which contained a detailed blueprint of sustainable development through their business plans (Jansen 2018). It aims to counter the environmental impacts of their existing business functioning as much as possible, thereby taking actions to improve the health conditions and wellbeing of a lot of people, presenting them with a better livelihoods. Unilever also aims to reduce the rate of environmental pollution by reducing the rate of plastic use as much as possible in the near future. Thus, the company attempts to strengthen their bonds with the people by making a difference to the lives of millions.
A recent international study shows that almost one-third (33%) of the customers of Unilever have started to use brands which are aimed at some social or environmental good (unilever, 2018).
Conclusion
Therefore we may conclude by saying that for a company like Unilever, which deals with consumer goods and thereby, largely depends on the demands and requirements of the customers, the customer value, rather the customer experience is of utmost importance. The manufacture of goods are largely based on the demands of the consumers, whose opinions are used in formulating product strategies. Unilever aims to reduce the use of water and electricity as much as possible, and implement changing ways of using energy in a more sustainable manner. Therefore Unilever caters to the well-being of the people not only through its products but also by its eco-friendly and sustainable methods of production and increase of cost effectiveness. The company focuses to expand the customer base by increasing the number of products which are in demand on a fairly large scale. It also aims to improve certain customer service facilities based on the idea of sustainable development.
Thus an assessment of customer experience, with special focus on customer value and customer experience helps Unilever to hold an upper hand in terms of the competitive market of consumer goods. Such assessment is critical to the success of any company, and Unilever is not an exception in this case. It helps a company to strengthen the customer’s preference of the brand through engaging them with a variety of experiences. It helps to increase the revenue income by increasing the amount of sales both among the existing customers as well as a new set of consumers. One key area of customer experience enhancement that takes place is the improvement of customer loyalty and brand equity by engaging in valuable interaction with the various segments of customers. Thus a time to time delivery of more personalized experience of the customers can help improve the customer experience of a company.
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