Pires, Guilherme
Transcrição
Pires, Guilherme
Towards a Preliminary Model of Consumer Empowerment Guilherme Pires, Newcastle Business School, University of Newcastle, John Stanton, School of Marketing and International Business, University of Western Sydney, Patricia Stanton, Newcastle Business School, University of Newcastle, Abstract Internet technologies have the potential to promote a power shift from sellers to buyers. Consumers may be empowered because they are just ‘one click’ away from a plethora of global competitors, all vying for their business. Because consumer empowerment may imply switching suppliers in search of better value propositions, it checks competitive advantage hence business cannot afford to ignore it. This paper develops a model of consumer empowerment enabled through the growth of information and communication technology that links the sources of consumer empowerment as an interactive process involving marketing activity. Introduction Digital technology, particularly the Internet, has been described as a facilitator of a global marketplace, characterised by “perfect information for all”, or at least, “equal access to information about products, prices, and distribution” (Strauss and Frost, 2001: 157-63). Combined with global connectivity generated by the widespread adoption of information and communication technology (ICT), technological convergence in consumer markets underpins a structural shift in business orientation towards price convergence (Hodkinson and Kiel, 1996). In this situation, competitive advantage is likely to derive from marketing strategies refocussed on consumers’ perceptions of value (ITGI, 2005), delivered through supplementary benefits targeted to consumers. Many of supplementary benefits are ICT based (Faes et al. 2000; Slater, 1996). The global reach of the Internet facilitates consumer access to more market information that involves larger choice sets, consumer ability to exchange information and opinion with peers, and the ability of consumers to change their own perceptions and consequent behaviour in a rapid and unchecked manner. Since more knowledgeable consumers will feel more powerful (Foucault 1977: 27), ‘customer empowerment’ reflects consumers’ enhanced ability to access, understand and share information (Deshpande, 2002), and to complete transactions more simply (Urban 2004). This realignment of competitive focus towards consumers’ valuations pushes consumer-driven production processes, with potential implications for the power relationship between consumers and suppliers. Hence, market knowledge that was once controlled by business is being relinquished to consumers, who are increasingly empowered in their decision-making (Wathiue et al. 2002). Since any business is unable to restrict consumers’ search processes and choices available by using ICT, business opportunities afforded by the Internet come with a sting of unintended and largely uncontrolled consumer power. Hence, if the growth of consumer empowerment is structural, relatively permanent and difficult to control, then there are possible major implications for marketing strategies that focus on market oriented organisational capabilities. This paper seeks to develop a model of consumer empowerment enabled through the growth of ICT, a model that links the sources of consumer empowerment, not as disparate forces, but as an interactive process that involves marketing activity. ANZMAC 2005 Conference: Strategic Marketing and Market Orientation 80 Empowerment: enablement with or without delegation The term ‘empowerment’ has been traced to 1788 in the US Constitution, to convey the idea of investing authority in a role or person, implying acceptance of personal responsibility or accountability (Maccoby, 1999). Linked to the paradox of empowerment, whereby effective empowerment means letting go and taking control (Baker, 1994), employee (internal customer) empowerment means controlled delegation, involving clarification of the mandate and expected performance (enablement) making available to the employee whatever means are required to achieve particular performance. Transferring these concepts of empowerment to external customers, consumer empowerment is about increasing value for consumers by providing additional access, content, education and commerce to wherever they are located (Turnquist, 2004). It involves helping consumers choose what they want, when they want it, and on their own terms (Wathiue et al. 2002). These descriptions imply empowerment as controlled enablement, but they are very vague on what delegation is concerned. Examples include Polar Air, which seeks “to meet its customers' needs while reducing the amount of stress placed on its call center, as well as the costs related to handling calls” (Martin, 2001), a utility company Puget Sound Energy (PSE), in the US, which empowers their energy consumers by disclosing time-of-day pricing as well as providing more ways for consumer contact (Aspect, 2005); and Victoria Electricity, in Australia, which offers an alternative dispute resolution procedure designed to empower consumers ‘who may otherwise have had to simply accept supplier’s decisions about their complaints’ (McLeod, 2002: 2). It is apparent that consumer empowerment may entail more services being made available as well as consumer self-service, but what consumers are allowed to do is clearly determined, regulated and controlled by the supplier. Power remains on the supplier side. Extent of ICT empowered consumers The Internet transformed “information scarcity’ into ‘information democracy’ (Sawhney and Kotler, 2001) or ‘transparency’ (Despande, 2002). Because empowerment derives substantially from the knowledge derived from the Internet and from other sources, the extent of empowerment will depend on consumers’ ability to discern useful information for evaluating competing offers and to satisfy their needs with the least waste of time and effort. More systematically, applied to the exchange process, the degree of consumer empowerment depends on: [1] how ‘connected’ consumers are; [2] the extent of choice on offer (i.e. number and quality of value propositions available); [3] consumer market knowledge (i.e. value propositions the consumer knows of); [4] consumers’ ability to search for and gather new market information; and [5] consumers’ ability to take advantage of alternative value propositions (e.g. ability to assess what is on offer, economic, time and logistic constraints). Empowered consumers manifest their power during the supplier selection process, either by selecting one particular value proposition or by rejecting the offer and continuing their market search. Previous use of consumer power (i.e. successful searches rewarded by value propositions with better perceived quality) reduces a consumer’s willingness to compromise and settle for propositions below their expectations. Hence, the significant difference that consumer empowerment makes is based on higher perceived quality expectation thresholds fuelled by consumer power; that is, power empowers. This effect is implicit in descriptions of “new consumers” (Traulsen and Nerreslet, 2004) and of consumers becoming more demanding (Koco, 2000) but the argument for a rising expectations threshold can be found in the work of Parasuraman et al. (1991) and Zeithaml et al. (1993). Arguably, “if customers perceive that ANZMAC 2005 Conference: Strategic Marketing and Market Orientation 81 they have alternative suppliers from which to choose, their zone of tolerance is likely to be smaller than if they don’t feel they have this flexibility” (Parasuraman et al. 1991, p.43). The more the power of the consumer, the more likely the rejection of value propositions of unsatisfactory quality. Borrowing from the terminology used by Tehan’s (2003) assessment of e-commerce retail purchases, a value proposition may involve particular amenities for the consumer (e.g. convenience of shopping from home, more information on the service-product, or lower prices) or deterrence (e.g. frustration at lengthy downloads, inability to examine an item, or service deterioration). The greater the consumer’s exposure to the amenities, the greater the demand for those amenities and the unwillingness to compromise for less, and the more likely the decision to search further. The spread of consumer empowerment may be inferred based on statistics of Internet users, indicating a sustained growth of at least 30 million users per year, to a current level of 888.6 million as of March 2005 (SEO, 2005). This represents 13.9 per cent of the world population (IWS, 2005), indicating substantial growth potential. In terms of revenue from sales, in North America alone revenues were expected to surpass US$133 billion in 2005 (eMarketer, 2002). Finally, the number of websites available has grown steadily from approximately 600 in 1993 to over 15 million by mid 2000 (Netcraft). These statistics indicate that an increase in the number of Internet users prompts an increase in demand for service-products and in sales revenue. Markets become more attractive for entrants leading to increases in the number of available websites and value propositions. Competition intensifies when these new and improved propositions compete with existing ones, increasing amenities and decreasing deterrents, hence increasing consumer power, raising consumers’ quality expectations thresholds and, ultimately, empowering consumers. While there are a lack of statistics regarding the number of value propositions, the fact that Amazon, for example, used to sell books but now offers a much more varied product selection (Tehan, 2003), suggests that growth in this area must be substantial, fuelling consumer empowerment. Finally, the spread of consumer empowerment can also be assessed by considering that the increasing numbers of users indicates increased consumer ICT literacy. Because it is through the use of search engines that Internet users find out about the websites that they purchase service-products from, empowered consumers can be expected to increase demand for effective search engines, with provider competition improving search engine effectiveness. More effective search engines should enable greater consumer choice, hence greater consumer empowerment. Reportedly, Google currently services as much as 76 per cent of web searches, but competition for the patronage of web searchers is increasing (SEO, 2005). Consequently, consumer empowerment is also likely to increase. Overall, the potential growth of the Internet is tied to an increase in the number of consumers and suppliers, increasing demand and supply as well as the quality of search engines available to both. Because of network synergies, connectivity expands further. The increase in supply increases competition and the stock of value propositions available to consumers. Greater choice and better means to choose, fuels the demand increase. Because electronic networks are characterised by intense connectivity and are amenable to the development of online consumer networks, the degree of consumer empowerment of an individual consumer may also increase. Online consumer networks allow consumers to share information about suppliers and their value propositions with other consumers, thus reducing consumer dependence on suppliers’ communications to form their own expectations about quality. In certain cases, consumers may gain countervailing power by forming collective buying groups, able to negotiate better terms with suppliers (Hirschey and Pappas, 1993). These forces may push expected quality thresholds ANZMAC 2005 Conference: Strategic Marketing and Market Orientation 82 even higher. However, the more demanding consumers become, the more their uniqueness may prevail with preferences for value propositions that more closely match this uniqueness. This is the rationale for the argument that, rather than forming a global market, the Internet is giving way to consumer market fragmentation (Yancey 2000; Turnquist 2004). But fragmentation need not imply less empowered consumers. It creates the opportunity for suppliers to devise customised and/or personalised marketing strategies that heighten consumers’ selective perceptions, leading to a preference towards the supplier. Competitive advantage may be as sustainable as this preferred status. Hence, ‘becoming the preferred supplier is the goal’ (Deshpande, 2002: 228) and power is on the side of empowered consumers. Strategic approaches to consumer empowerment Business has been using more consumer-centric (-empowerment) marketing strategies (ITGI 2005). Responsiveness to changing consumer needs may explain Seven Eleven becoming ‘Always Open’, or banking changing from 'you come to us, on your time' to limited capability at an ATM at any time, to 'access any of our services 24/7, by phone or Internet'. Other examples include the Citizens Charters (IDS 2005), introduced in the UK public sector to empower customers by creating a mechanism for their complaints about maladministration and providing comparative performance information relative to other providers; the Ritz-Carlton Hotels’ customer focused empowerment, which asks staff to be responsible for, and act upon, customer complaints (Mosely 2005); and the ‘Ask once, promise’ marketing communications recently introduced to Australian banking, whereby the bank employee that is first approached by a customer with an inquiry, ‘owns’ the inquiry for the duration of the transaction, saving customers from the need to repeat their requirements to any other bank employees. Consumer-centric marketing strategies also are often associated with customer relationship management (CRM) advocacy. Consumer-centricity, however, depends on whether the wants at their core are determined by customers’ actual wants or by managers’ perception of what they ought to be. Disregard for this condition arguably justifies that many marketers fail to realize that ‘a lot of the benefits that are claimed for CRM are really benefits that accrue to the enterprise, but have nothing to do with the customer” (Newell 2003). Provided suppliers ‘know’ their customers, consumer market fragmentation allows for yield management of the market, encouraging consumer empowering, personalised strategies that combine greater customer control over operations including what is done where, to whom and how. However, businesses apparently understand their increasing attention to consumer wants as controlled strategic concessions given to consumers due to increasing competition, as illustrated by current approaches to customer self-service (CSS) and CRM. The idea of CSS is that consumers should be, and feel they are, in charge of their experience, while suppliers benefit from reduced operational costs. However, the question is whether consumers have their say in regard to CSS, or whether unwanted CSS is imposed upon them. Misunderstanding of the customer has been shown to have led some banks in Australia to develop services (such as ATMs) that some of their customers do not want (Rugimbana and Iversen 1994). The notion that consumers will be grateful to suppliers for the power they enjoy from CSS (BusinessTown 2005), contrasts with the view that empowering involves not forcing consumers to do anything they are unwilling to do (Greenberg 2001). ANZMAC 2005 Conference: Strategic Marketing and Market Orientation 83 Towards a model of consumer empowerment generation The factors, discussed in this paper as leading to a change in the relationship between consumers and suppliers and a growing unintended consumer empowerment, are drawn together as a preliminary model, depicted as figure 1 below. Figure 1: Preliminary Model of Consumer Empowerment Generation Consumer ability to search and gather new info Consumer past choice experiences Quality of Value Propositions in the market Number of Value Propositions in the market Consumer market knowledge Consumer Choice Consumer-centric marketing strategies (CSS; CMR, employee empowerment, ..) Customisation Personalisation Responsiveness Consumer Empowerment Countervailling Power Contextual Constraints (Assessment; Access; Economic; Logistics; Time; Product; Transaction complexity) Consumer empowerment is presented as both a structural condition (reflected in the technologies and access to that technology) and a psychological condition in which consumers perceive receding constraints in their search for value. The role of marketing strategies in engendering growing, controlled consumer empowerment is presented on the right hand side by the consumer–centric marketing strategies that seek to enable and also control delegation. In addition to the dependence on ICT familiarity and use, such strategies feed into increased supply as well as consumer ability to search and gather new information, emphasising the uncontrolled nature of consumer empowerment. While the model presents the factors contributing to the changing consumer empowerment process, clearly more amplification of the linkages is required. Implications Consumer empowerment in its current form is in its infancy. Combining ICT with CSS and enhanced consumer empowerment could lead to the development of virtual corporations only staffed by customers. While this is an unlikely scenario, it provides a portent for a future where enhanced relationships with consumers substitute for managerial prescriptions of consumer behaviour. The emphasis, however, may be not on traditional CRM approaches but on CMR, the customer management of relationships (Newell 2003). Overall, the literature paints a complex picture of consumer empowerment and its impact on marketing strategy. Common threads in this literature emphasise business intelligence and consumer management based on their value to the business. Preferred consumers receive full attention and businesses make every effort to satisfy even the least of their desires. These preferred consumers are empowered by their ability to pay for the extraordinary service. Non-preferred consumers are allowed (directed) to serve themselves, more or less effectively, usually on a restricted and highly controlled range of transactions. Consumer empowerment in both these cases is enablement without delegation. Nevertheless, there is also evidence in the literature that consumer empowerment may ensue from business endeavours to take advantage of e-commerce opportunities. While power is not deliberately delegated to consumers, control of consumer ANZMAC 2005 Conference: Strategic Marketing and Market Orientation 84 choice appears to be beyond any one business. This paper supports a view of consumer empowerment as an important and enduring structural change in the business environment. 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