Sometimes, a company focuses on too many customers. Is this a good thing? Do you believe it compromises their strategic success? Why, or why not? What changes do you recommend to be made? 200-300 wor

MBA 5841, Strategic Marketing 1 Cou rse Learning Outcomes for Unit III Upon completion of this unit, students should be able to: 3. Contrast different product market strategies. 3.1 Determine how a company uses its competitive advantages and strategies to create sustainable value. 3.2 Develop a s ituation analysis and its associated sections for a marketing plan b ased on a specific company. Course/Unit Learning Outcomes Learning Activity 3.1 Unit III Lesson Chapters 6 and 7 Unit III Project 3.2 Unit III Lesson Unit III Project Reading Assignment Chapter 6: Creating Advantage: Customer Value Leadersh ip Chapter 7: Building and M anaging Customer Relationships Unit Lesson The Customer Decision Journey is the set of stages customers move through as they evolve through a product search involving before -and -after purchase states of mind. This is in contrast to what marketers previously believed. Before the advent of the Internet, online purchasing, and social media, customers were anonymous and often divided into distinct groupings based on their purchasing behaviors, demographics, and psychographic statuses . Within these convenient groupings, consumers were expected to follow a linear decision -making process in their search and ultimate purchase of products. The traditional decision journey consisted of four linear steps that the customer passed through on his or her way to making a product purchasing decision. The traditional purchasing process steps are shown below. UNIT III STUDY GUIDE Competitive Advantage and Creating Sustainable Value Through Product Market Strategies AIDA (Aaker & Moorman, 201 8) MBA 5841, Strategic Marketing 2 UNIT x STUDY GUIDE Title These steps were considered not only linear but also unidirectional, beginning with attention a nd ultimately ending in desire. The Internet and the introduction of new technologies provided more tools for both the customers and marketers. No longer were customers anonymous or was product information sourced only from the marketer.

The Internet enables a voice and preference platform for all customers. In fact, customers now represent the largest interest group for marketers. What makes this incredibly scary for marketers is that they do not control their customers anymore. Therefore, if their product does not perf orm satisfactorily as perceived by their customers, a chorus of negative praise from those unhappy, complaining customers can da mage or derail a brand quickly. Rather than making pronouncements about a brand’s attributes and benefits, marketers must now e ngage in a dialogue with their customers, one that both demonstrates that they hear their customers’ product praise and concerns. Marketers must be prompt in their responses to customers’ critiques, or the company can potentially face customer revolts. Mar keters must now realize their power to persuade and manipulate customers has greatly lessened in ways they previously took for granted. Customers are now speaking directly to other customers about their product experiences and product feedback. This has of ten put the marketer in the role of that of the helpless parent watching their children make important decisions about their parents’ future without their parents’ input. Customers can bypass marketing communication channels altogether if they do not belie ve those channels to be genuine representations of the product. Technology has added this layer of complexity, making the current Customer Decision Journey much more complex. In creating a consideration set, the direction is no longer unidirectional. Bran ds can also enter and leave at various points along the forming of the consideration set. During this active consideration process, customers can make moment -to-moment decisions that can either include additional brands or exclude current ones, only to rei nstate those excluded brands at a later date before the f inal purchase decision is made. Marketers must be in tune with their customers’ behavior and purchasing consideration patterns to be present at just the right moments or face being eliminated from c onsideration. Aaker and Moorman (2018) describe these steps as being activated by a trigger, thus, activating the Customer Decision Journey. There are six steps contained in the Customer Decision Journey, which are shown below. Six steps of the Customer Decision Journey (Aaker & Moorman, 2018, p. 124) Trigger Information Gathering Consideration Set Preference Purchase Post -Purchase MBA 5841, Strategic Marketing 3 UNIT x STUDY GUIDE Title Although marketers' control over customer behavior is limited throughout this process (each of these six steps), there are opportunities to be influential. Marketers' strengths in keeping their pr oducts in front of customers can be managed best by understanding how their customers are behaving toward their products during their decision journey. This behavior is called the customer experience. In the beginning, Chipotle Mexican Grill (commonly refe rred to as Chipotle) understood its customers' experiences well, so they created strategies that appealed to their young, hip, millennial, environmentally conscious, and value -oriented target market. Customers looked forward to lunchtime with Chipotle in m ind, not just to eat tasty food served up quickly, but also to show their friends and colleagues how they supported a company that identified with their social beliefs. This became a good match between brand and customer. The post -purchase experience was satisfying in that customers' appetites were sated, and when asked where they ate, customers were proud to say Chipotle. This enabled Chipotle to create a great customer experience. This is important to marketers because it enables companies to resist compe titor imitation and add value to core products and services. This can make a brand more memorable by insp iring customer loyalty. Building long -term customer relationships is a marketing strategy goal for most companies. Marketers use the following ways to build and defend long -term customer relationships by differentiating value, rebuffing competitor challenges, raising customer -switching costs, increasing investments in customers, fostering customer co -creation, resolving the need for variety, refreshing the relationship, making multiple relationships, and granting exclusivity. The following is an example of a company that mastered all of these areas of the Customer Decision Journey, but ultimately, it failed in its brand promise and paid the price. It now faces a long struggle to regain its customers' trust and loyalty to return to market dominance in an ever -changing marketplace. In the illustration below, see how Chipotle went from market leader to laggard through its demands for rapid growth at the exp ense of its public health and responsibility to its customers. Chipotle created marketing strategies that strongly appealed to its target Customer Decision Journey. Then, it ultimately failed to consistently deliver. This is not uncommon for firms that fai l to consistently impleme nt their own proven strategies. Chipotle, once a leader in the casual fast -food industry sector, has found itself in a pickle.

Customers’ restaurant spending has been minimal. The industry has trended flat to a decline. The big three burger companies, McDonald’s, W endy’s, and Burger King, are beginning to outnumber Chipotle as winners among the competition in the fast -food industry, but Chipotle is one of the biggest losers (Maze, 2017). Chipotle Mexic an Grill Inc., together with its subsidiaries, operates Chipotle restaurants. The company’s Chipotle product offerings consist of a menu of burritos, tacos, burrito bowls (a burrito without the tortilla), and salads. By the end of 2016, the company managed its operations and restaurants based on 11 regions. It operated 2,198 Chipotle restaurants throughout the United States, 29 international Chipotle restaurants, and 23 restaurants in other non -Chipotle concepts (Boone, 2017). The market strategies created by Chipotle are not providing the sustained growth and profitability that made it the darling of its fast -food casual dining market segment. The company had burst upon the scene, creating a new type of dining experience that specifically targeted a millen nial, young, hip, and active market segment. It created products containing high -quality, fresh ingredients, creating an aura of wholesome goodness. Its stores were placed in well -traveled locations. Its clean, functional, no -nonsense décor complimented it s quick and pleasant service. It was not uncommon for waiting lines to extend outside its doors during every meal period. It seemed that everyone could not get enough of Chipotle and its well -priced offerings. Chipotle (Miototis, 2016) MBA 5841, Strategic Marketing 4 UNIT x STUDY GUIDE Title Like Starbucks, Chipotle became the gathering place for the up -and -coming young professionals who were value and nutrition conscious. Taking a green sustainability approach to include all its suppliers, it was able to define its sustainable strategy before its competitors, thus creating an initial co mpetitive advantage that appealed to its customers. Chipotle promoted its approach that food served fast did not have to be a fast -food experience. It created burritos, tacos, and salads with high -quality, raw ingredients implementing classic cooking metho ds. These distinctive attributes were further advertised through its in-store menus (Chiang, Chan, & Nguyen, 2014). At the time, no other fast -food restaurant had made such a commitment in its product offerings to Chipotle’s degree of total commitment. Ta king the sustainable quality and nutritional high ground earned Chipotle large growth and popularity. Capitalizing on the farm -to-table movement, Chipotle purchased organic food and supported family farms and local producers to support the community, prote ct the environment, and improve safety and health. Almost half of its beans were organically grown, protecting them from commercia l pesticides. Companies like Chipotle gained a competitive advantage by implementing green strategies deliberately as a part of their marketing strategy. They established a sustainable culture that began with the way they sourced their quality ingredients. They also cre ated ways to use local farmers to enhance their supply chain effectiveness. Finally, this was presented to their customers in a clean, functional, and pleasant environment where the service was fast, but the food was tasty. This culminated in Chipotle deli berately creating and enjoying a significant competitive advantage over their competition (Chiang et al., 2014). The quality ingredients sourced and contained in Chipotle’s product offerings were not the only elements of the market strategies that contributed to the firm's competitive advantages and superior market position.

Chipotle recognized that for it to maximiz e its sustainable supply chain strategies, it would need for each store to be a quality delivery system to its customers, thus completing the circle of expectations created by its brand and anticipated by its customers. The service quality exhibited in eac h store was fast and efficient. Orders were taken and filled by quick, customer -oriented, polite staff members. Even when lines were long during meal times, customers were confident that they would be served a quality meal quickly, they would have a clean and pleasant environment to enjoy their meal, and they would have the ability to be in and out within their time constraints. This demonstrated a bond between customer and company where the customers' expectations were high and, in part, created by Chipotl e's brand promise. The fulfillment of that promise was repeated daily and consistently across Chipotle's ever -expanding market reach. Just as Chipotle had created a strong brand connection with its target market, it had also created a strong internal bran d connection with its employees. They, too, believed in Chipotle’s message of sustainability, freshness, and wholesome goodness of its product offerings. These employees successfully demonstrated the influence of Chipotle’s internal branding process and th eir firm’s attention to corporate culture while also being aware of the public’s approval of this culture. This reinforcement of internal orientation by the positive responses from customers helped employees become better implementers of the good and consi stent training in which they received. Chipotle’s image was generated by an effective integrated marketing communications strategy, which included advertising, public relations, and promotion. It had an effective and identifiable corporate logo. The custo mer post -purchase experience remained consistently high, causing high levels of repeat business, which is critical in the fast -food industry (Kang, 2016) . An important part of this post -purchase experience was the interaction with Chipotle's employees whil e ordering a meal. The employees played an important role in the brand strategy fulfillment, which was every bit as important as the quality ingredients being used. The training and corporate orientation received by the employees was well aligned with the sustainable supply chain performance and quality product delivery. Put all together; this was Chipotle's secret sauce that was difficult for competitors to emulate. So, what went wrong? Cases of customers being poisoned began to appear in late -2015 and co ntinued through mid -2016. W hat made these cases extra damaging was that they were not isolated to a particular store or region but were reported nationwide. During this time, considerable harm was done to the Chipotle brand and public trust. Customers who buy cigarettes know their product can kill them. There was not that initial expectation from Chipotle customers. Both the company and the nation were taken by surprise at the thought that this high -performing company would stumble so badly. MBA 5841, Strategic Marketing 5 UNIT x STUDY GUIDE Title The competitiv e advantages of superior sustainable supply chains were now cast in doubt. Had these organic supply chains or local farmers doubled as conduits for deadly E -coli bacteria? Conversely, even though competitor fast food did not contain natural quality ingredi ents, it was consistently safe from contamination. Customers began leaving Chipotle in droves. Some stores were closed. Initially, the company seemed frozen in disbelief, just like its customers. When it did act, Chipotle acted decisively, closing restaura nts that might be operating at risk. Eventually, it created communication strategies of openness and transparency to keep its customers and the public informed of its progress of eliminating the E -coli threat across all of its stores. A part of the blame was Chipotle’s initial good fortune. In part, because they were able to create and offer an innovative, fresh, and affordable approach to fast food, customers flocked to its stores. Expansion came rapidly and easily. With every new store came the crush of profit expectations married to the fulfillment of the brand promise. Corporate market strategies were designed to ensure rapid market expansion to meet an ever -increasing demand in untapped markets. Inevitably, when there are failures in food preparation within the food industry, it finds its roots at the functional employee training level. Training employees to achieve the high levels of sanitation and cleanliness necessary to safely run food preparation operations is a major and challenging undertaking u nder normal circumstances. To achieve and maintain those same levels consistently during the fulfillment of high growth strategies is a recipe for potential disaster. Chipotle's aggressive growth strategies placed it on that path. Within any major corpora tion, there are corporate governance policies designed to provide broad oversight of the company's management team. It is the CEO's responsibility to create a strategic plan to be reviewed and approved by the company's board of directors. There is a distin ct separation between the CEO and his or her management team and the way they conduct their activities while implementing market planning strategies daily. This is why it is reasonable and customary for boards to be comprised of a large ratio of independen t but knowledgeable board members. The independent board members bring an expert, external view of the company’s industry and marketplace to bear on behalf of the company’s leadership, providing direction and counsel to the CEO. These external board member s are also a safeguard against a governing board filled with internal company members who may have too much of an inward vision that could have a compromising effect on the company’s innovation and growth. Such was the case with Chipotle. Its eight board members had some of the longest tenures of any public company board. Rotation of board members was minimal. Overlooking food industry safeguards to facilitate rapid market growth to meet growing demand was a symptom of an inward -looking governing board. To complicate matters, not only did Chipotle's food preparation standards suffer as a result of growth that was too rapid, but its information technology (IT) security standards were not able to keep pace either. On the heels of the company proclaiming that the food poisoning scare was over, the company's IT security was the target of a successful massive system security breach in mid -2016. Now, every customer and more were affected rather than those who were unlucky enough to suffer from food poisoning. Publ ic and customer trust in Chipotle plummeted (Boone, 2017). Concurrently, just as Chipotle was addressing its market strategy implementation challenges, its market sector suffered a slowdown in growth, creating the environment that exists today (Maze, 2017 ). Chipotle, like all companies, must continue to evaluate its market strategies and competitive environment for the things it can control and for the things it must endure. Then, it must continue to plan its future carefully. Its customers, shareholders, employees, and stakeholders depend on it. References Aaker, D. A. , & Moorman, C . (2018). Strategic market management (11th ed.) . Hoboken, NJ: Wiley. Boone, M. (2017, November). Critical survey: Jack In The Box (JACK) versus Chipotle Mexican Grill (CMG). Stock News Times . Retrieved from https://stocknewstimes.com/2017/11/21/critical -survey -jack -in-the - box -jack -versus -chipotle -mexican -grill -cmg.html MBA 5841, Strategic Marketing 6 UNIT x STUDY GUIDE Title Chiang, A., Chan, P., & Nguyen, L. (2014). Do U.S. food com panies achieve competitive advantages by implementing green strategies throughout their supply chains? Advances in Management and Applied Economics , 4(5), 41 –52. Retrieved from https://search -proquest - com.libraryresources.columbiasouthern.edu/docview/16091 03748?accountid=33337 Jade, M. (2016). Chipotle [Photograph]. Retrieved from https://commons.wikimedia.org/wiki/File:Chipotle.jpg Kang, D. S. (2016). Turning inside out: Perceived internal branding in customer -firm relationship building. The Journal of Services Marketing , 30 (4), 462 –475. Retrieved from https://search -proquest - com.libraryresources.columbiasouthern.edu/docview/1826811562?accountid=33337 Maze, J. (2017, August 24). Few winners in a tough quarter for restaurants. Nation's Restaurant News . Retrieved from https://search -proquest - com.libraryresources.columbiasouthern.edu/docview/1931565874?accountid=3333 7 Suggested Reading In order to access the following resources, click the links below. This article promotes a three -stage model that its a uthor believes will show how brand strategy is transformed into customer experiences during the front -end of new service development. It also provides original insight into the transition from brand to concept, bridging branding, service design, and new se rvice development to brand strategy and customer experience . Clatworthy, S. (2012). Bridging the gap between brand strategy and customer experience. Managing Service Quality, 22 (2), 108 –127. Retrieved from https://search -proquest - com.libraryresources.columbiasouthern.edu/abicomplete/docview/928742222/FFD12617D8694 D11P Q/1?accountid=33337 Philip Kotler, renowned for his marketing skills, discusses the importance of creating market strategies that include three important skills , which are create, communicate, and deliver value to a target market audience at a profit. He discusses some relevant information that you are encouraged to view. London Business Forum. (2008 , September 5 ). Philip Kotler: Marketing strategy [Video file]. Retrieved from https://www.youtube.com/watch?v=bilOOPuAvTY Click here to access the video transcript. Philip Kotler outlines from his book, Market Your Way to Growth, 8 Ways to Win , the eight -step approach to creating growth in low -growth market environments. Hussin, T. J. (2013, September 28). Philip Kotler: 8 ways to market your way to growth [Video file]. Retrieved from https://www.youtube.com/watch?v=di4_Q97UPDQ Click here to access the video transcript. Learning Activities (Nong raded) Nongraded Learning Activities are provided to aid stude nts in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. Chapter 6 Flash Cards The following interactive presentation on Chapter 6 will assist you in better understanding the lesson. Click here to access the Chapter 6 Flash Cards . (Click here to ac cess a PDF version.) MBA 5841, Strategic Marketing 7 UNIT x STUDY GUIDE Title Chapter 6 “For Discussion” Questions Review the Chapter 6 “For Discussion” questions on page 118 in your textbook , and answer one to two questions. Submit your responses to your instructor for relevant feedback. Chapter 7 Knowledge Check Complete the Chapter 7 Knowledge Check to gain a better understanding of the lesson. Click here to access the Chapter 7 Knowledge Check.