2.4. Internal factors
2.4.2. Customer focus
Customer focus as a market-driven strategy is “a component of market orientated firms that focus on putting the customers at the centre of strategic focus” (Yaacob 2014:2). Lengler et al. (2016:708) argue that “as firms begin to invest in customer-oriented behaviours, export performance will increase as they become more knowledgeable about related needs and demands.” Similarly, Verhoef and Lemon (2013) assert that firms which are customer focused not only provide products that meet customer specifications, but also place overall attention on the whole supply chain operations such as seeking qualified suppliers, designing customer tailor-made products, timely delivery to the customer, reasonably priced products and well thought of after-sales service. Egonsson, Bayarsaikhan and Ly (2013:3) state that
“after-sales services for manufactured goods encompass the set of activities taking place after the purchase of the product, devoted to supporting customers in the usage and disposal of goods.” The above researchers highlight that there are three main drivers aimed at supporting customers after the purchase namely, market technical support, service parts, distribution and customer relationship. On the other hand, Saccani, Johansson and Perona (2007:54) argue that “after sales service is a set of activities taking place after the purchase of the product devoted to supporting customers in the usage and disposal of goods and is arguably a component of customer focus.” Nivethika and Yoganathan (2015:1) highlight that “after- sales service plays a pivotal role in strengthening the bond between the organization and its customers.” The aforenamed researchers state that customers have shifted from just asking for a product but require a composite solution, and are therefore “increasingly moving away from requesting for a specific product to requesting for a certain service package (including
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the original purchase and all aftermarket needs) instead.” This clearly indicates that the modern customer has become sophisticated therefore, “companies must work much harder in order to capture and understand how to market to their customers more efficiently and effectively,” (Liu, 2010:72). Furthermore, the Liu (2010: 73) argues that “the growth in the sophistication of consumers makes it mandatory for companies to understand the advanced needs and desires of their customers, and how to harness their new found power.”
Verhoef and Lemon (2013) highlight that organisations need to be customer focused, through ensuring timely delivery of the product to the market. Gilaninia, Monsef and Mosaddegh (2013:10) indicate that “timely delivery of products to the market is one of the key tangible factors indicating that the firm is customer-focused and has an impact on a firm‟s export performance.” Export pricing as a variable of customer-focus has received considerable attention in literature and a case in point is that “a number of research studies focusing on the determinants of exporting success found that pricing plays a critical role in export performance” (Sousa & Novello, 2014:3). The aforementioned researchers highlight that
“pricing decisions are particularly important for SMEs, as they have been identified as one of the key strategic decisions that managers have to make to ensure export profitability.” The pricing strategy adopted by a company is paramount for the sustainable export performance of an organisation and therefore needs to be contingent to the environment in which it operates (Tan & Sousa, 2011). It is argued that “competitive pressures may force managers to adapt their strategies to better meet consumers‟ personalized demands in foreign markets, as well as to match price levels of local competitors” (Sousa & Novello, 2014:7). Furthermore, Junaidu (2012:557) argues that “offering satisfactory prices to customers is another factor that is hinged on the marketing function of the firm and insufficient resources could limit the ability of the firm to offer suitable prices compared to competitors, thus affecting the performance of the firm negatively.” Similarly, Tuu and Oslen (2013) assert that organisations which fail to match prices to those of competitors are deemed to fail in the international markets.
In view of Tajeddini, Elg and Trueman (2013:459), “customer-focus requires firms to continuously update and improve all processes associated with improving the total welfare of the customer, since customer needs are continuously changing due to the dynamic nature of the environment, processes and products to meet those customers‟ needs also have to change.” As a result, “the benefits accruing from being customer-focused have been reported
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to be an increase in a firm‟s performance and cost related benefits” (Yaacob 2014:2). This view is supported by researchers such as Anaza and Rutheford (2012) and Alam (2013).
Although many researchers have failed to give an account of the benefits that accrue to a firm that focuses on the customer, Yaacob (2014:2) provides evidence on the impact of customer focus and states that, “customer focus has four attributes of performance namely, customer satisfaction, employee satisfaction, and innovation and costs benefits.” In line with the above, Mukerjee (2013) highlights that innovation increases a firm‟s performance and is arguably more prevalent in firms which put more emphasis on customer focus. Nevertheless, this previous view has been criticised by Pan, Sheng and Xie (2012) who argue that customer focus compels firms to commit huge amount of resources for a long time, to satisfy the needs of customers and this creates tension for managers who have to satisfy the financial performance of the firm, especially if the results of customer focus do not provide immediate positive results. Steven, Dong, and Dresner (2012) are of the view that the implementation of customer-focus to less performing sectors becomes very de-motivating and unsatisfactory for managers. Nevertherless, the implementation of customer focus as a strategy has received wide attention from various sectors of the economy across the globe (Alam, 2013; Mukerjee, 2013), and customer-focus has been ranked high by most firms who aim to attain sustainable performance (Mokhtar, 2013). Yaacob (2014:3) states that, sustainable performance refers to the capacity of an entity to rapidly and efficiently respond to customer related issues.
Therefore, in order to respond swiftly to customer related issues, “the organisation needs customer data, this provides information to the employees so that they can act accordingly”
There are so many new entrants into the market every day, with great innovations, with the objective of increasing their profits. When faced with such a scenario, it is ideal to adopt customer focus strategies, which entail creating relationships with customers who are loyal to the business and this is done through focusing on handling consumer complaints and making follow-ups where appropriate (Krivokapic, Vujovic, Jovanovic, Petrovis & Pekovic, 2013).
Strokes (2010) argues that customer satisfaction and customer orientation are strongly associated with the success of SMEs, and it is thus vital that SMEs value personal relationships with customers (Kotler, 2008), which relationships can be achieved by a process of elimination, instead of using classical strategies for example, segmentation, targeting and positioning (Cummins, Gilmore & Carson, 2010).
Although the idea of being customer focused is very noble, it is not quite relevant for SMEs in developing countries, since it is difficult to achieve to the fact that “SMEs have unclear
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view of the customer, commitment with the status quo, ignorance of market orientation, lack of competitive differentiation, limited resources, perceived inappropriateness and short-term focused” (Mahmoud, 2011:242). This researcher further argues that “the fact that market orientation concept was developed largely from studies of large organizations makes it timely to examine the appropriateness of the construct to SMEs,” (Mahmoud, 2011:242).