Importance of Customer Satisfaction and Needs in Strategic Marketing

The study aims to understand how by focusing on customer needs and expectations, businesses can maintain their performance as well as market position. The study also aims to increase the knowledge base on the subject that can support future researches made on the topic. Several studies have shown that focusing on customer satisfaction and needs is one of the most important factors for any business conglomerate that can allow them to understand the needs and expectations of the customer and develop products and services accordingly. The studies by the authors show that segmentation of customers is an important aspect through which the customer base can be understood in a structured and strategic manner and feedbacks can be collected from each segment separately. The authors suggested that the importance of interactive orientation that can support better performance of the organization which in turn can be supported from the centrality of the customer concept in the business decisions. From the study of Amazon and its corporate strategy the various factors that supported its success in the maintenance of customer satisfaction could be understood and the understanding of how customer satisfaction and customer experience has considerably enabled the growth of the business and its position as a market leader.

Running head: STRATEGIC MARKETING
Strategic Marketing
Name of the Student
Name of the University
Author Note

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Executive Summary
The study aims to understand how by focusing on customer needs and expectations,
businesses can maintain their performance as well as market position. The study also aims to
increase the knowledge base on the subject that can support future researches made on the
topic. Several studies have shown that focusing on customer satisfaction and needs is one of
the most important factors for any business conglomerate that can allow them to understand
the needs and expectations of the customer and develop products and services accordingly.
The studies by the authors show that segmentation of customers is an important aspect
through which the customer base can be understood in a structured and strategic manner and
feedbacks can be collected from each segment separately. The authors suggested that the
importance of interactive orientation that can support better performance of the organization
which in turn can be supported from the centrality of the customer concept in the business
decisions. From the study of Amazon and its corporate strategy the various factors that
supported its success in the maintenance of customer satisfaction could be understood and the
understanding of how customer satisfaction and customer experience has considerably
enabled the growth of the business and its position as a market leader.

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Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
-Aim of the study...................................................................................................................3
-Importance of customer satisfaction and customer needs....................................................3
-Introduction to the company.................................................................................................4
-Importance of customer voice in the company.....................................................................4
Discussion..................................................................................................................................4
-Focusing on customers experience to develop a customer driven organization...................4
-Using framework for innovation to develop customer oriented organization......................7
-Focusing on customer satisfaction to support success in internal market............................9
-Focusing on market driven product strategies....................................................................11
-Customer retention practices..............................................................................................14
>retaining dissatisfied business customers.......................................................................15
>customer retention management....................................................................................16
Conclusion and recommendations...........................................................................................17
References:...............................................................................................................................18

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Introduction
-Aim of the study
The aim of the study is to evaluate and explore the importance of a customer centric business
model that keeps the voice of the customers (their expectations, needs, grievances, and
perspectives) while making strategic marketing decisions within the organization. The study
aims to understand how by focusing on customer needs and expectations, businesses can
maintain their performance as well as market position. The study also aims to increase the
knowledge base on the subject that can support future researches made on the topic. A critical
evaluation of academic literature that discusses the importance of customer centric business
models has also be made to support the key findings from the organizational analysis with
relevant theories and practices. The study therefore aims to support the view that “The best
marketing strategies aren’t top down; they are outside-in starting with customer needs and
wants”.
-Importance of customer satisfaction and customer needs
Several studies have shown that focusing on customer satisfaction and needs is one of the
most important factors for any business conglomerate that can allow them to understand the
needs and expectations of the customer and develop products and services accordingly. A
study of market that provide a deeper understanding of the market patterns and trends
provides a more in depth understanding of the customers’ expectations and how it impacts it
market patterns (Hussain et al. 2015). Focusing on customer satisfaction not only helps to
increase customer loyalty but also retain as well as increase the customer base for a business.
Factors such as the purchasing power, quality of product, need for the product, the current
trends and availability of product substitutes should be taken into consideration while

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understanding the product market and understand the needs and expectations of the customers
in a better manner in order to have more customer retention (Ren et al. 2016).
-Introduction to the company
Amazon is an American company that specializes in technology and retail and is one of the
four biggest companies in the world along with Facebook, Apple and Google. In terms of its
revenues, Amazon is the largest internet company in the world and in terms of the number of
employees it is the biggest employer in USA. The company is therefore a leader in the market
and attracts significant loyalty from customers. Company has net revenue of 232.98 billion
USD and operating income of 12.54 billion USD as of 2018. The organization has a number
of subsidiaries through it can attain better market capture.
-Importance of customer voice in the company
The significance of the voice of customers is integrally related to the vision mission and goals
of the company that aims towards the maintenance of customer expectations. The mission of
the company is to be the world’s most customer centric company and develop a platform for
the people where they can discover and find anything they want to purchase thereby showing
the importance of customer focus and their obsession with product acquisition. In order to
make the products and services easily available, Amazon has adopted various technological
advances within its operations to simplify and structure the product line into various
categories (Qazi et al. 2017; Engler et al. 2015).
Discussion
-Focusing on customers experience to develop a customer driven organization
Studies by Donovan and Samler (1994) titled “Delighting Customers- The ten step approach
to building a customer driven organization”, focuses on the importance maintaining customer

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expectations as well as exceeding them by developing an organization that is driven by
customer needs through a ten-step process. This involves setting a clear vision towards
customer orientation and customer centricity, gaining commitment from the employee and
leadership towards the improvement of customer experience, making strategic decisions to
improve the experience, developing customer segmentation, outlining the criteria for success,
developing feedback systems for customers, analyzing the results, managing changes within
the organization, communicating the change and identifying scopes for further development
(Rahimi and Kozak 2017). This strategy can help a business to understand how to get started
towards the development of customer experience, understand the factors which are important
for the customers and thereby implement the strategies that can delight the customer. Amazon
uses these strategies to not only maintain a high level of commitment within the organization,
starting from its CEO ( jeff Bezos) to all the employees to maintain the best experiences for
the customers but also develop a strong understanding of the customer market through
successful segmentation outlined of criterion for success in the company policies and reports
and using a strong system through which the company collect customer feedbacks (Lee et al.
2016). This not only helps Amazon to understand the customers’ needs and expectations but
also to cater to a large number of customer base through a huge diversity of products
allowing the customers to find virtually all kinds of consumer products online (Kim et al.
2015).
The studies by the authors show that segmentation of customers is an important aspect
through which the customer base can be understood in a structured and strategic manner and
feedbacks can be collected from each segment separately to understand how the differential
mindset of each segment influence the overall market trends (Agnihotri et al. 2016). The
drive for Amazon to delight its customers not only stems from its vision and mission but also
from its objectives towards strategic customer segmentation and market analysis that prevents

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the organization to take shortcuts and perform a holistic research and review to understand
the market in a better manner (Pitt et al. 2016). The methodology of research used by
Amazon focuses on certain important factors through which it can effectively understand
aspects which the customers think are important a thereby effectively cater to their needs.
This factors include the specific scope for improvement in the products and services, the
future expectations and needs of the customers, comparison of the ratings provided by the
customer for Amazon against its competitors , focusing on ratings of the customers related to
product reliability, ease of use and cost, levels of satisfaction of the customers on specific
functions such as sales, after sales support, logistics and training and the overall satisfaction
levels of the customers from the product lines (Ali et al. 2015).
It has been suggested by Shi et al. (2016) that factors such as taking appropriate actions on
the customer retention strategies can support positive results through which the shortcoming
of service and products are addressed and overcome using action plans that improve the
strategic and tactical design of the product. This can allow an organization to continually
achieve as well as exceed the customer expectation, thereby ensuring their delightment.
However, it has also been pointed out that such centricity towards customer experience can
often result in higher expenses for the organization for the investments in market analytics,
maintenance of robust customer service divisions and continually adapt the business
operations to the needs and expectations of the customers to maintain their loyalty (Felix
2017). These functions therefore represent a significant part of the operational expense of
Amazon, through which it has been able to maintain its strong customer centric business
operations and maintain its leadership position in the global market. The significance of a
continuous development approach in order to maintain customer centricity and exceed
customer expectations has been supported by several studies on customer centered business
designs, and supports Amazon’s strategic decisions and directions through which it aims to

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maintain and increase the experience and satisfaction of the customers, making it one of the
most customer centric companies in the world. It can also be implied that the customer
centric business strategies of Amazon therefore represents the outside in approach of the
business, starting with the needs and concerns of the customers, which has supported the
growth and success of the business, thereby supporting the central argument proposed in the
study (Habel et al. 2016).
-Using framework for innovation to develop customer oriented organization
The study by Mukherjee (2013) in the article titled “ Customer-oriented organizations a
framework for innovation focuses on the importance of customer orientation through the
development of a culture that can understand and capture the needs and expectations of the
customers more effectively. The authors suggested that the importance of interactive
orientation that can support better performance of the organization which in turn can be
supported from the centrality of the customer concept in the business decisions, an
improvement in the capacity to interactive response , empowerment of the customers and
importance of customer value management the authors also suggested three initiatives that
can be taken by organizations to improve its customer orientation (Lun et al 2016). This
includes increasing an understanding of the factors and aspects that customers consider
valuable, tracking the satisfaction of the customers after promoting the delivery of those
identified factors and aspects and offering rewards and promotions I order to retain the
loyalty among customers as well as their profitability. Amazon utilizes strong market
research methods to understand the valued factors for the customers and maintains the
satisfaction of customers by delivering its services and products at par with those values and
expectations. The discounts promotional offer and loyalty bonuses offered by Amazon
moreover help the customers to get a profitable deal and thereby promote better customer
retention (Ding et al. 2017).

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The framework of developing a customer oriented organization can help to understand how
businesses like Amazon, can develop an organization that is oriented toward customer needs
through three steps which have been identified above. Empowering the employees to engage
with the customers in a more effective manner and identify their values and aspirations as
well as analysis of the customer interactions in order to develop customer profiles based on
the aspirations and needs of the customers can help to support the development of
understanding of customers and their values (Zameer et al. 2015). Integration of the
departments to create a unified experience for the customer and using formal as well as
informal methods to capture customer voice can help businesses to track whether their
customers are satisfied and deliver the desired outcomes to them. The changing needs and
expectations of the customers can be tracked through the triggers of innovation and
individual customers can be personally rewarded to suit their likes and dislikes as an
approach to promote customer loyalty and customer rewards. This approach has been utilized
by Amazon by providing strong employee training programs on customer satisfaction,
effective market profiling and customer segmentation, based on customer needs that informs
the product delivery methods, maintain an integration between its various departments to
ensure seamless experience for customers, utilizing research interviews and surveys to
understand the voice of customers (VOC), using different triggers of innovation to address
the changing preference of the customers through better products and also providing product
discounts rewards and promotions to suit individual customer likes and dislikes thereby
helping to retain their loyalty to the company. Mukherjee (2013) pointed out that effective
customer value management can be achieved through the three step approach mentioned
above as well as through the perspective of treating individual customers differently
according to firm’s values and goals which can ensure that the customers are delivered the
products according to the expectations (Khalid et al. 2018).

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Coyles and Gorky (2005) in their article titled “ Customer retention is not enough”, however
pointed out that most of the companies understand that retaining customer is more effective
than acquiring new ones which have led to the development of the concept of customer
retention as a “ holy grail” of marketing and business. However, the authors suggest that the
problem of the customers defecting is of a far lesser concern than customers who are
changing their patterns of purchase (Paul et al. 2016). The current practices and traditional
matrix that measure customer satisfaction as well as defection are not adequate to inform the
companies the susceptibility of the customers to change their spending patterns. From the
study, the authors suggested that the organizations should focus on the smaller changes in the
spending patterns of the customers to understand how susceptible they are to change their
buying habits which can provide more value to the organization in its market analysis
compared to focusing on the defection rates alone. Amazon uses this approach to evaluate
the customers’ behavior by understanding their patterns of behavior that influences their
buying habits (Matzler et al. 2015).
-Focusing on customer satisfaction to support success in internal market
The article by Piercy ( 1995) titled, “ Customer satisfaction and the internal market-
marketing UT customers to our employees”, aims to show the importance of customer
satisfaction as a central focus to various management approaches and strategies, understand
and evaluate academic literature and use measurements of customer satisfaction for the
management of businesses showing its relation with analytical techniques through which
customer satisfaction strategies and approaches can be developed. The authors also aim to
show the practical application of such approaches for the organization within its internal
market and promote the satisfaction of the external customers by promoting the satisfaction
of internal customers (Askariazad and Babakhani 2015). Additionally, the author’s tries to
demonstrate the practical reality of the complexity involved in measuring customer

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satisfaction and the problems of implementing customer satisfaction strategies in practice.
Focus on important concepts such as the marketing concept, the pursuit for excellence,
market orientation, service quality, a process that is market driven, relationship marketing
and marketing control have also been made by the authors on the study (Pizam et al. 2016).
The customer satisfaction dimensions in the internal and external markets can be understood
from the analysis of the external as well as internal market issues that correlate to the
dimensions of customer satisfactions which includes the expectations, the perceived product
or service delivery, level of disconfirmation or confirmation and their complaining behavior.
The external issue in the market of anticipated characteristics of the products and services
and the internal issue of stereotypes or anticipated priorities and preferences of the customers
can be influenced by the dimension of customer expectations. The external issue of pint of
sale capabilities and use for products and services and the internal issue of the internal
criterion and priorities in context of the external issues are influenced by the dimension of
perceptions of product delivery and services (Hao et al. 2015). The external issue of delusion
or disappointment among customers compared to the positive outcomes from the services and
products and the internal issue of the customer’s judgment and attitude that influences their
behavior , product ambiguity as well as role stress are affected by the dimension of the
disconfirmation or confirmation of the customer. The external issues of the cooping capacity
and overcoming negative feedback and the internal issue of a hostile mindset towards the
feedbacks of customer leading to antagonistic behavior and rejection of customer opinions as
a form self-protection are influenced by the dimension of the complaining behavior of
customers. This framework of understanding customer satisfaction dimensions helps to
understand how the issues from the internal as well as external market can influence the
customer satisfaction levels and by addressing the specific internal and external issues in the
market in a strategic manner by which organizations can improve the expectations of the

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customer, their perceptions of how the organization delivers its product and services, develop
confirmation towards the brand and mitigate consumer complaining behaviors (Adams et al.
2016).
Amazon utilizes this framework to manage customer expectation through which it prevents
stereotypical views and focuses on important priorities within its products and services to
promote better service expectation. The company manages its external and internal priorities,
integrating point of ales services to improve the perception of its product delivery and
service. High level of focus on the behavioral modification for customers to support their
loyalty and enabling a positive outcome from the external marketing strategies helps the
organization to maintain confirmation to the brand. Moreover, Amazon has strong strategies
to address and manage customer complaints and negative feedbacks in a timely and
responsive manner to prevent and minimize complaints by customers thereby improving
customer satisfaction (Mkpojiogu and Hashim 2016).
According to White & Yanamandram (2007) in the article, “ A model off customer retention
of dissatisfied business services customers”, presents a theoretical framework that can
influence dissatisfied customers to continue using the brand and its services instead of
switching over to alternate service providers or in order words defecting from the brand. The
authors suggested that interpersonal relationships, service recovery approaches, provision of
alternatives and attractive deals and brad inertia can significantly contribute to the
maintenance of brand loyalty and prevent brand defection. The study therefore shows that it
is not only necessary for companies to focus on customer satisfaction but also on customer
dissatisfaction through which it can retain its dissatisfied business customers through service
recovery and customer retention strategies (Atapattu et al. 2016).
-Focusing on market driven product strategies

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Cravens et. al. (2000) in the article titled developing market driven product strategies
suggests that companies that are successful can encounter various unique competitive
challenges and there are different strategies as well as initiatives that can support the
development of market driven strategies such as leveraging the design of the business,
understanding the mandate for growth, deleting a vision for the market, addressing a match in
the organization capacities or organizational values, understanding the strategic relationships,
developing a strong brands, leveraging brand value and proactive cannibalization . the
authors studied brand such as Coca-Cola and Dell to show how its organizational strategies
were built around its flagship products that helped in the process of the business design
through a cycle of brand building, brand leveraging, proactive cannibalization , growth
mandate, market vision, capabilities value match and strategic relationships. The study
evaluated the components that are associated with organizational capacities such as the skills
of cross functional teams, accumulation of knowledge on new product experiences, assets in
the form of brand image and the internal coordination and communication within the
organization which influences the organizational processes, help in the development of new
product and services which in turn supports better value for the customers thereby showing
how key capabilities of the organization can guide the organizational components towards
better customer experience and value (Canfield and Basso 2017). It is important that
organizations examine the match of the organization’s capabilities to these values so that it
can execute and deliver those values effectively, by taking into account the differential needs
of the customers and focusing on multiple customer groups. Businesses can also create
capacities that are hard to copy and can provide a unique experience to the customer thereby
gaining competitive advantage and matching those specific capacities to superior
opportunities for customer values. Amazon utilizes the approach of increasing value for
customers through the extensive products and services that are offered and available through

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its online platform and through its centricity on customer preferences through which it
maintains strong and skilled cross functional workforce, develop significant knowledge about
the different customer segments from its market studies, coordinates its marketing activities
to ensure best communication approaches and use its strong brand image and goodwill as an
asset to promote customer satisfaction (Zablah et al. 2016).
The strategies to promote relationship with the customers in order to develop customer driven
business model and product design, is a key dimension according to the authors through
which the company can maintain a collaborative relationship with the stakeholders. Using the
example of computer industries, the author suggested that the relationship strategy can help
the organization to leverage their capabilities through a collaborative relationship that can
help the internal departments to manage its processes such as customer service in a more
effective manner. This approach has significantly assisted Amazon to develop strong
relationship with the customer and partnership with its suppliers and manufacturers, creating
a positive community that promotes overall growth of all the businesses (Zailani et al. 2016).
The author suggests that in order to develop a more customer centric design for business,
understanding of the customer should be developed through customer targeting and
segmentation that can help to understand the differences in the key belief s and attitude of the
customers that influence their purchasing behaviors. It has however been pointed by Wright
(1996) in the article , “ The dubious assumptions of segmentation and targeting”, that studies
the process of market targeting and segmentation and can lead to wrong assumptions through
ineffective setting of priorities and segmentations that can lead to a bias in the analytical
process thereby misinforming strategic decisions. The authors suggest that the basis of
segmentation, the variables used for measuring segmentation, strategies for identifying the
segment solutions and the number of segmentations that is aimed to be developed from the
marketing research can lead to biased results and therefore organizational need to focus on

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these matrix more thoroughly while developing market segments (Greenland et al 2016). It can
therefore be suggested that Amazon should also follow these recommendations to prevent its
market segmentation process giving misleading ideas to the management. It can also be
evaluated that from the adoption of this approach organizations can not only promote market
driven strategy for products but develop a key brand image that can help it company to
leverage the brand to promote customer satisfaction .The strong brand image of Amazon as
the market leader has moreover been very advantageous to develop relationships with the
customers and promote successful strategic brand management (Al-Msallam 2016).
-Customer retention practices
The customer retention practices have been considered to become of the most important
factors to promote the growth of the brand and increase in market capture. This not only
includes the retention of the existing customers who are already loyal to the brand but also
the customers who are dissatisfied and have a high change of switching the brand . Shiner
(1988) in the article titled, “ Marketing’s role in strategic and tactical planning”, focuses on
the confusion related to the idea of marketing strategy and tactics and evaluate the traditional
theories of marketing that are utilized by line managers to maintain and retain customer
expectations . the author suggests planning in advance before taking an action and planning
based on interdependent decision through the implementation of decision making systems
and focusing on the development of multiple future states in the planning process to increase
the range of options for the businesses can provide marketing managers various opportunities
through which it can retain its customers through strategic planning (Askariazad and
Babakhani 2015). Amazon uses these approaches to create a traditional marketing strategy
and tactical plan that aligns the strategic activities with the customer concerns. The retention
of customers as a strategic approach can be further understood from to other factors such as

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retention of dissatisfied customers and maintenance of customer loyalty which are outlined as
below:
>retaining dissatisfied business customers
White and Yanamandram (2007) suggested that retaining dissatisfied business customers is
an important concern for the business managers that can not only promote better brand
image, but prevent customer defection, brand switching and deterioration of the brand image.
The authors conducted a review of literature investigating the factors that cause the customers
to switch services and service providers and the factors associate with customers defecting
the brands. Factors such as uncertainty costs, pre switching costs, set up costs, post switching
costs, benefits-loss costs, interpersonal relationships, attractiveness of alternative options,
distributive justice, procedural justice, interactional justice, brand inertia, calculative
commitment and brand dependence were integrally associated with the intentions of the
customer to repurchase from the brand thus promoting brand loyalty (Paul et al. 2016). The
authors proposed that the factors that can cause dissatisfaction among the customers are the
main reasons customers tend to defect from bands and switch service providers. This can be
associated with the significant loss of the market capture of Amazon to some of its key rival
companies such as Flipchart and eBay.
According to the authors, the nature of relation between the business and the customer is the
key factor the promotes customer experience or causes customer dissatisfaction, and the
moderating characteristics of the customer-business relation can be used to effectively retain
dissatisfied customers. It was however also pointed out by Coye’s and Gokey (2005) that
businesses should also focus on the downward migration of the customers in terms of their
lifestyles deliberative approaches as well as dissatisfaction with the brand. The overall
profiles of customer loyalty should also be developed by the brand according to the authors to
retain dissatisfied customers. Amazon focuses on this approach to ensure that it does not lose

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its dissatisfied customers by implementing strategies to improve the customer experiences
and win back their trust on the brand (Khalid et al. 2018).
>customer retention management
Ahmad and Buttle (2002) in the article titled, “ Customer retention management: a reflection
on theory and practice”, studies the importance of customer retention as a management issue
through relationship marketing and customer satisfaction in the increasingly increasing
saturation in the customer market. the focus of the article has been on the retention of
customer than on the acquisition of new customers as the authors promote that is always
more profitable for the company to try and retain existing customer than taking expensive
measures to acquire new customer market. this approach however, starkly contrasts with the
studies by White and Yanamandram ( 2007) and Coyles and Gokey ( 2005) both suggesting
that the companies should step beyond the scopes of customer retention as a traditional
approach and focus more on approaches to acquire new customers as well as create new
market segments thereby helping to increase customer base. It can still be assumed that the
approaches of customer retention management as suggested by Ahmad and Buttle ( 2002)
that the retention of customers can help in improvement of service marketing and industrial
marketing as well as general marketing and support the six dimension of the marketing mix
through a company can develop effective service and product design, maintain effective
pricing, promote sales and advertisement activities, advertising, distribution and direct
marketing that an support better elation with the customers and market entry for the business
(Ding et al. 2017).
Amazon uses these six dimensions in marketing mix to focus on multiple aspects through it
can promote and increase retention of its customers through competitive pricing, sales
strategies, advertisement , direct marketing options and product distributions approaches.
Approaches such as using premium service delivery options that provides customers with

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chosen products through express delivery services helped the company to affectively retain
its large customer base preventing brand defection or brand switching (Habel et al. 2016).
Conclusion and recommendations
From the study of Amazon and its corporate strategy the various factors that supported its
success in the maintenance of customer satisfaction could be understood and the
understanding of how customer satisfaction and customer experience has considerably
enabled the growth of the business and its position as a market leader supports the initial
hypothesis of the study about the importance of focusing on the customer needs and
expectations as a key responsibility of business managers to promote business growth thereby
suggesting an outside –in approach of management instead of a top-down approach. The
following recommendations can be made that can further enable businesses such as Amazon
to maintain its market position as a leader by engaging with the customers in a more effective
way and maintain best experiences:
 Using advanced technologies for faster product delivery such as drones and
automated vehicles.
 Implementing green and agile practices to maintain operational sustainability.
 Focusing on investments in renewable resources to promote environmental
sustainability for the business and better brand image.
 To give adequate focus on both acquiring new customers as well as retaining the
existing customers.
(Pizam et al. 2016; Khalid et al 2018)

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