There are two different types of approaches organizations are using in the market for the provision of services one is customer-centric and other is product-centric. The product-centric organizations are the ones who pay particular attention to the products they are presenting in the market. The product-centered organizations believe in delivering the best quality products which they think will meet the requirement of the market. Whereas, the customer-centered organization are the ones where the customers hold the central position. In the customer-centered organization, the decisions related to any products are based on the needs, demands, desires, and requirement of the customers who are using the products.
The product-centered organization first develop their product and then send it to the market hoping that it will meet the needs of the people. The primary purpose of the organization is to provide an innovative and excellent quality product which will attract the customers itself. Mainly product centered organizations are working on the idea that with great products the customer automatically comes in ultimately generating the more significant benefits. The focus of the organization is on the product design, quality, feature and capability to meeting the latest market requirements. For example, one of the leading examples of the product-driven organization is Apple as they do not ask for what customers want instead they design a product with a robust market strategy which in turn is generating higher revenue for them. Designers, developers, and executives of the company are the ones who are making the big decisions regarding the apple products.
The customer-centered companies first research about the customer’s expectations and their needs. After thorough research, the products are designed which meet the requirements of the customers. The primary purpose of this type of the organization is to develop the products which make their customers happy. Market research and understanding is the key to this type of approach and design, and features of the products are devised keeping in mind the customer’s review and what has been concluded from market research. This approach employs the idea of convenience and flexibility the customer is looking for in the product. Marketing is not central to this because the product is developed based on the requirement of the customer. However, it also does not mean that no marketing is done at all, but it means that marketing is not carried out to the extent product-driven organization do. Samsung is one of the customer-driven company in the technology industry because the business put lots of effort in market research, survey and resource to understand what exactly customers want.
Customer-centricity is a concept relying on the provision of services based on the customer’s need and expectations. Customer-centred approach increases the customer’s satisfaction level, and more people will use the product. But the expenses of using the customer-centric approach are also high such as the cost of market research, modifying the products based on the analysis might be same as benefits (Lee, Sridhar, Henderson, & Palmatier, 2014). However, this approach will help retain more customers which will bring more business to the company. Also, because the products are designed to keep in view the customers so this will also give the edge of finances as people will be more comfortable using the products.
It also positively impact the human resources as the employee will be able to interact with the customers directly understanding their needs which will, in turn, increase the employee retention. Because they will be able to devise the products which will improve their efficiency and there are growing with every challenge. Product-driven organization change with the products but the customer-based organization have a robust structure which will focus both on the customers and employees who are providing the services to them.
With each passing day there is an improvement in the technology and it does benefit the customer-centered organization as it provides them leverage to deal with the latest technology. Also, it will provide customers an experience to use the latest technologies which will also indirectly benefit the company financially and development purposes. However, it also saves the company from not experimenting or wasting time and effort on a product which does not have market value. For example, there might be a latest technology but the assembling and features are not aligned with the convenience and ease of the customers so the chances are that less people are likely to use it which is not beneficial for the company.
Because this organizational structure has already invested so much in market research for understanding the needs of the customers that it does not require great marketing techniques and strategies. Also, loyal customers would purchase your products anyway so marketing might be required for the first time around but later it will be in need but not as much as it was for the first time. The product-centered approach need customers each time they launch a new product but customer centered approach would have their loyal customers regardless of their products.
Research and development will also improve in the customer-centered approach as the market research arena will increase the horizon of the research. For example, while researching about what should be features of a new mobile devices people then the research and development field will be elaborated on this aspect? All these aspects will also impact the sales of the product. Customer centered organization will have higher sales because of their relevance to the customer’s need, affordable and increased customer satisfactions. Also, loyal customers will generate more revenue as retaining a new customer will be more expensive and would require more time. For example, the product sale to a loyal customer will be higher as compared to new customer.