Customer is King: Evolution of the Retail Food Industry

Topics: Retailing, Sales, Marketing Pages: 7 (2279 words) Published: April 21, 2012
Customer is King

It is common understanding that you cannot have a business if you do not have customers to buy the product you produce or services you deliver; therefore customer is an integral part of every business. There was a time when customers was treated less critical and vocal by the businesses and markets was treated just as dumping grounds for the products, however this situation does not prevail anymore because of the tremendous transformation happening in the retail food industry since last five decades. Today customers have more choices than ever before, through more diverse channels. Even the expectations of customer are higher than ever before. Companies who fail to leave up to the expectation are finding hard to get or retain the customers- Majority of the unsatisfied customer do not complain they just change the suppliers. Therefore retailers have realised that the only way to sustain in the competitive market is by being customer centric.(Barnes & Glynn, 1993)

Today every businesses treat customer as king and aware that only exceptional level of customer service can differentiate them from the competition in an increasingly saturated marketplace. Customer is often treated as the asset of the company and considered in the strategic level decision making. Therefore I certainly agree with this frequently used marketing cliché “customer is king”. To better explain my position I have presented my views based on two contexts. The first being how customer is king? This is explained by describing the customer’s role in the evolution of the retail food industry and its implications. The second being why customer is king? This is explained by detailing the significance of customers in the retail food business.

The evolution of the retail food industry and its implications:

Retail food industry has undergone a tremendous transformation in the last five decades, these transformations can be classified into four different phases- Predevelopment, Development, Saturation and Decline phase (Terbeek, 1999). During the predevelopment phase shopping was a social event, relationships between the customer and grocer was important. Shopping experience was logical, retail was more of a personalised business where the customer was treated as an individual and his or her needs were well known and understood by the businesses. Also there existed a long term personal relationship between the businesses and the customer (Steidtman, 2005). Therefore during this phase more emphasis was given to the customer and customer service, however this situation did not prevail long. During the development phase, small and neighbourhood stores started to decline due to the raise of supermarket. Customers were no more trusting grocer rather they started to trust brands. No longer there existed a personal relationship between the businesses and the customer. Even management was centralised and employees were ignorant of the customer behaviour, old values which existed during the predevelopment stage relating to employee and customer relationship almost disappeared, the customer becomes a consumer. However due to logistics efficiency and introduction in new model of central buying and distribution of standard products to standard stores led in the decline of product prices. Even though retailer was the ultimate connection to the customer but manufacturer had more control over the market demand and retailer was just acting as distributor. Manufacturer assumed that every market was standard and started using push marketing model to sell his products, therefore emphasis on customer was neglected and customer service was taken a backseat (Terbeek, 1999)

During the saturation phase the competition between the retailers intensified, there was a rise of many stores even the products increased from 8000 to 30000 items and above, which resulted in making a decision making stressful for the customers. However the growth...

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