...for them to be successful. Creating loyal customers is at the heart of every business. Improving efficiency in connecting to customers, building customer satisfaction, customer value and loyalty leads to improved and better business results. Marketing experts Don Peppers and Martha Rogers say, “The only value your company will ever create is the value that comes from customers—the ones you have now and the ones you will have in the future. Businesses succeed by getting, keeping, and growing customers. Customers are the only reason you build factories, hire employees, schedule meetings, lay fiber-optic lines, or engage in any business activity. Without customers, you don’t have a business.” Companies must establish and maintain a high customer value for their products and services because consumers use customer value to make buying decisions. You make buying decisions in day-to-day life experiences. For example in buying for a bottled water drink. Should you buy the wilkins worth P15 or the evian water worth P65? In every buying decision, a consumer asks the same question: 'is what I am going to receive worth what I have to give up in order to get it?' The gain the consumer receives for the benefit is weighed against the cost the consumer must pay to acquire the benefit. The value the individual consumer places on a product or service becomes the customer value for that offering. This customer value is weighed against the customer values assigned for similar products and services...
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...| CHAPTER 5 147 Summary 1. Customers are value maximizers. They form an expectation of value and act on it. Buyers will buy from the firm that they perceive to offer the highest customerdelivered value, defined as the difference between total customer benefits and total customer cost. 2. A buyer’s satisfaction is a function of the product’s perceived performance and the buyer’s expectations. Recognizing that high satisfaction leads to high customer loyalty, companies must ensure that they meet and exceed customer expectations. 3. Losing profitable customers can dramatically affect a firm’s profits. The cost of attracting a new customer is estimated to be five times the cost of keeping a current customer happy. The key to retaining customers is relationship marketing. 4. Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Marketers play a key role in achieving high levels of total quality so that firms remain solvent and profitable. 5. Marketing managers must calculate customer lifetime values of their customer base to understand their profit implications. They must also determine ways to increase the value of the customer base. 6. Companies are also becoming skilled in customer relationship management (CRM), which focuses on developing programs to attract and retain the right customers and meeting the individual needs of those valued customers. 7. Customer relationship management often...
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...Management – Case 31 Customer Service and Relationship Management at Nordstrom 1. What steps does Nordstrom take to implement its strategy of providing outstanding customer service? To begin with, Nordstrom employees treat customers like royalty. Customers are even at the top of Nordstrom’s so-called organization chart. All lower levels work towards supporting the salespeople, who in turn work to serve the customers. Salespeople are given personalized business cards to help them build relationships with customers. They are not tied to their respective departments but to the customers, this turns their salesperson a “personal shopper” of the customers. This opportunity to sell departments enables salespeople to maximize sales and commissions while providing superior customer service. Despite all the efforts in making sure customer satisfaction is met, it starts from the employees. Nordstrom employees are treated almost like the extended family. They are treated like businesspeople and empowered to make independent decisions. Overall, Nordstrom delivers good quality product with good service. 2. How do these activities enable Nordstrom to reduce the gaps between perceived service and customer expectations, as described in Chapter 18? Nordstrom’s policies focus on the concept of the “Life –time Value of the Customer.” Their service goes above and beyond what other retail stores can offer. Even if little money is made from the first sale, the lifetime value of a customer is calculated...
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...“Nordstrom: How to Succeed by Selling Just One Shoe” Hassan Suluki Strayer University MKT 100 02/24/2011 “Nordstrom: How to Succeed by Selling Just One Shoe” Identify the type of retailer that Nordstrom’s is classified as and describe the characteristics it shares with other retailers of this type. A store like Nordstrom has built a successful model on availability of knowledgeable salespeople, and other luxury or near-luxury retailers would be advised to pay attention. But a mass retailer like Target is not dependent on “high touch” customer service; rather, the most important things it can do to satisfy its shoppers are to ensure that goods are on the shelf and the checkout process is efficient. As more consumers migrate to “mission shopping” (walking into a store looking for a specific item), the self-service model becomes more important. Consumers are also becoming accustomed to more control through online and mobile shopping. But there is still a place for good CRM, even in the most hands-off models of “customer service.” Nordstrom is classified as an Upscale Department Store Chain. Today, Nordstrom is one of the nation's leading fashion retailers, offering a wide variety of fine quality apparel, shoes and accessories for men, women and children at stores across the country. Nordstrom shares the same characteristics as Macy’s, JC Penny's and Dillard's who also sells clothing, accessories, handbags, jewelry, cosmetics, fragrances, and in some locations, home furnishings...
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...Best Buy, Wal-Mart, Sak’s Fifth Avenue, Amazon and the specialty kiosk I Play N Talk. Service Organizations Best-Buy Best Buy was founded by Richard M. Schulze in 1966 and has become a powerhouse in the consumer electronics industry. Their headquarters are in Richfield, Minnesota and they operate in the US, Mexico, and Canada. BestBuy has grown into a huge retail chain spanning over 1,400 stores. They started by the name “Sound of Music” in 1966 until 1983 where it was renamed to what we know it now as Best-Buy. Best-Buy employs around 125,000 people and they generate $40 billion annually. Amazon Amazon is not like most businesses. Although its headquarters are located in Seattle, Washington; it does not have a store location where customers can physically shop for productions. Their website, Amazon.com, serves as a market for buyers and sellers to do business with one another online. Amazon has many distribution systems throughout the United States that deliver productions to customers. To operate efficiently, Amazon must invest heavily in...
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...Nordstrom “Fashion changes. Shopping changes. Our commitment to happy customers doesn't.” Nordstrom today is currently operated by a fourth generation of the Nordstrom family, an executive team, and a talented team of innovators and fashion leaders. Nordstrom has grown from a small downtown Seattle shoe store into a nationwide fashion specialty chain. It offers a tremendous selection of shoes, accessories and an extensive range of services to make shopping a fun, efficient and convenient process. In 2011, the company was recorded as achieving an all-time record for total net sales at $10.5 billion. In 2014, Nordstrom “serves customers in 38 states with 118 full-line stores in the United States and one in Canada, 167 Nordstrom Rack locations. We also serve customers online in 96 countries through Nordstrom.com” (Nordstrom Website). This company clearly has shown their business philosophy to provide exceptional service, selection, quality and value has lasted over time. Nordstrom’s organizational structure is set up a little different than most companies. Individually, each employee must excel to reach their personal selling goal on a daily basis. This is important because each group, or department an individual works in, must also reach their selling numbers to prosper as an organizational or company level. Nordstrom uses an inverted social structure. Since Nordstrom prospers on their ability to sell to their customers, selling employees are at the top of their pyramid...
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...retailers of this type. The type of retailer Nordstrom is classified as is a Department store. A Department store is a retail establishment which specializes in satisfying a wide range of the consumer’s product needs, carries a wide variety of shopping and specialty goods, including apparel, cosmetics, houseware, electronics, and sometimes furniture. Nordstrom fall into this category because it sells clothing, accessories, handbags, jewelry, cosmetics, fragrances, and in some locations, home furnishing. This hasn’t always been the case, Nordstrom started out as a Specialty store, in which retailers specialize in a given type of merchandise. This merchandise for Nordstrom was shoes but the company later decided not only to focus on shoes but other merchandise. Some other department stores that share similar characteristics as Nordstrom are Macy’s, Ross, JCPenny, Dillards, and Kohl’s just to name a few. In these Department stores a customer can find a wide variety of products, for women, men, and children. Describe Nordstrom's level of service on the continuum from full service to self-service. Give an example of a store that would be on the opposite end of the continuum and explain their differences. As mentioned prior Nordstrom’s was at one point considered to be a specialty store and their specialty was shoes. In the past your sole reason to go to Nordstrom to get fitted for a great pair of shoes. Over the years their level of service on continuum from full to service to...
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...competition between the key players, such as Nordstrom Inc has to compete for the more effective position is really severe. Thus the strategies the companies used are very important and this research objective is to reveal successful strategies in the global consumer goods industry market on the example of the quite important competitor in this market – Nordstrom Inc, the owner of high class department stores chain in the USA, examining its way to success, the industry it is competing, and the reasons of the effective and fail solutions, that occurred in the particular regions as well as company’s strongest and weakest parts. Hence it would be important to note that retailing corporations and Nordstrom Inc, in particular have captured a number of markets and nowadays their marketing, organizational and developmental strategies could be referred to as one of the most effective ever used. The deep understanding of the market niche and target group in different areas, added to the effectiveness of Nordstrom Inc strategies, despite the number of negative factors, oppressive competition and certain fails in particular regions. Among the objectives of the research investigating any ability of cross country infrastructure the company’s suppliers, their experience in managing the complex catering places, choosing places, where the restaurants would be located and finally marketing activity. This report is going to examine the global strategy of Nordstrom Inc, retailing shops network, their global...
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...Customer Gap The Customer Gap, as a kind of distance between customers and manufactures, describes a measure of the degree of separation. The higher the Customer Gap, the higher the risk of generating customer dissatisfaction, losing loyalty, decreasing net promoters and eventually compromising all the company long term growth. So that the bigger the wedge, the bigger the disconnection, the bigger the Customer Gap will be (Gafo, 2010). In another word, the customer gap is difference between customers expectations service and customers subjective perceived service. According to Zeithaml, V, A. &Bitner, M, J. (1996), customer expectations are beliefs about service delivery that function as standards or reference point against which performance is judged. These authors develop an argument which is that customers hold different types of expectations for service performance (Zeithaml and Bitner, 2003). Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online. Customer perception is totally subjective and is based on the customer’s interaction with the product or service. Perception is derived from the customer’s satisfaction of the specific product or service and the quality of service delivery. The customer gap is the most important gap and in an ideal world the customer’s expectation...
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...operated as part of a larger retail institution. Another type of retailer is franchises and they are owned and operated by individuals but they are licensed by supporting organizations two examples are Apple Bee’s or Beef ‘O Brady’s. The third types of retailers are chain stores, and they are owned and operated as a group by a single organization. Nordstrom is known to be an upscale retailer that has been famous for superior customer service for over 100 years. Nordstrom has 157 stores in 27 states and their plan was to open 19 more by 2010, and expanding into Boston, Ohio, and other untapped U.S. markets. They strive to make every customer’s experience enjoyable and upscale, so that the customer feels as if they are treating themselves upon every visit to the store. Eric Nordstrom, the company's president, visits each potential location himself before signing off on it. He says his gut instinct about a location is almost as important as the demographics and statistics they analyze. "Plenty of places look good on paper and we say no."”Case Study How to succeed just by selling one shoe” From reading the “Case Study it seems that Nordstrom is one of many chain stores....
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...NORDSTROM[1] In 1880, John W. Nordstrom left Sweden and sailed to the United States. Twenty-one years later, with a $13,000 fortune struck in Klondike gold, he opened up a shoe store in Seattle. Today that small downtown store is a shoe and apparel empire with almost 100 outlets in more than 10 states. Nordstrom is one of the most successful department stores with 1995 sales of $3.90 billion and net earnings of $203 million. During the 1980’s and 1990’s the company doubled its size from 29 to 89 stores, opening outlets across California and eastward, in Virginia, Washington, D.C. and, most recently, in Paramus, New Jersey. Sales and net earnings grew comparably. In 1995 profits were up 45% and same store sales were up 4.4%. The number of Nordstrom employees has grown to 35,000. Despite its recent expansion, Nordstrom has remained a family operation. Grandsons John, Bruce, and Jim are all co-chairmen and Jack McMillan, a Nordstrom by marriage, is the company’s president. Nordstrom has no chief executive. The company prides itself on having cultivated a family operation among its workers. All employees are made to feel like members of a family sharing in “the Nordstrom Way.” The Nordstrom Way is perhaps what has set the department store apart from its competition. It is customer service like no one else offers, service above and beyond the call of duty. At Nordstrom, service is an art form. The store host gala dinners and fashion shows has valet parking, concierges...
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...Carlos Albizu University Nordstrom: Dissension in the Ranks? Margie Lee Romero GEEB-517 Organizational Diagnosis and Change Management Dr. Antonio A. Bosque Nordstrom Nordstrom is a leading fashion specialty retailer which originated over 100 years ago. The company is very well known for their emotional connection to customers treating them like loyalty. Department stores have magnificent and elegant settings. Nordstrom offers high fashion clothing, shoes and accessories for women, men and children at any price. The business is around 36 different states and they count with 117 full-line stores. Their business objective is to increase frequency of visits and control new fashion lines. Their main strategy is to play to the target customers’ that are craving for friends and fashion. Problem The main problems that the company presented was that employees were complaining about two different issues; one focused on employees working ‘off the clock’ and the other on the over demanding treatment by management. Through out time the number of employees complaints kept increasing. Management implemented a performance evaluation strategy to monitor sales per hour. The performance of sales was evaluated on the basis of sales volume and the strategy had proven effectiveness for over 20 years. Nordstrom management uses SPH (sales per hour) for compensation or even promotion but at the same time SPH was also used for identifying non-performance making employees anxious about their...
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...“Nordstrom: How to Succeed by Selling Just One Shoe” Principles of Marketing May 2011 1. Identify the type of retailer that Nordstrom’s is classified as. Describe the characteristics it shares with other retailers of this type. Nordstrom is classified as a department store. It sells a variety of products including clothing, jewelry, handbags, cosmetics, and home furnishing. Nordstrom started as a shoe store as time passed they diversify their product, and they opened more stores in different locations. They sell products identical to the department stores. Nordstrom like department stores have a series of permanent products such as cosmetics, hardware, jewelry, sporting goods, among others. Another likeness to the other department stores is that they have many stores in different locations of the US. Nordstrom competes with other national, regional, and local retail and departments stores. Nordstrom’s top competition comes from retail stores that sell similar lines of apparel such as Neiman Marcus, Saks Fifth Avenue, Dillard’s, and other high-end fashion retailers. Nordstrom shares many characteristic with other retailers such as their generous exchange policy, superior customer service, the product quality. 2. Describe Nordstrom's level of service on the continuum from full service to self-service. Give an example of a store that would be on the opposite end of the continuum and explain their differences. Moving from full service to self-service paid...
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...MGT/230 October 8, 2012 Organizational Structure Nordstrom Incorporated has a history that dates back to 1901, when John W. Nordstrom and Carl Wallin joined forces and opened the first Wallin & Nordstrom, Inc. They opened their first shoe store in downtown Seattle, Washington, and found that they needed to look for new and innovative ways for their company’s growth. They ventured into the clothing market and started selling fine apparel and added men’s clothing and children’s wear to expand the needs of their customers. In 1971 they went public, and the company was recognized as the largest-volume West Coast fashion specialty store, and the company name was formally changed to Nordstrom, Inc. From the beginning, John Nordstrom shared a business philosophy that was exceptional service, selection, quality, and value. Today the philosophy remains the same (“Nordstrom.com,” n.d.). The vertical structure is very apparent in the Nordstrom, Inc. organization. The company has key executives, board members, and executive key committees that run the organization. According to Bateman & Snell, (2011), corporate governance is a role of the corporation’s executive staff and board of directors in ensuring that the organizations activities meet the goals of the stakeholders. The board of directors’ selects, advises, and oversees management and is responsible for the day-to-day operations of the company. Although Nordstrom, Inc. is a vertical organization, its structure is quite...
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...1. Identify the type of retailer that Nordstrom’s is classified as. Describe the characteristics it shares with other retailers of this type.. Nordstrom would be described as a department store. They carry a wide variety of goods, such as clothing, accessories, handbags, jewelry and cosmetics like other department stores such as Macy’s, JCPenney and Sears. They have a very high level of service as evidenced in the case study about selling just one shoe and taking a return on snow tires when they never sold auto parts. Their prices are fairly high since they carry mostly high-end brands. These are all traits that department stores share. 2. Describe Nordstrom's level of service on the continuum from full service to self-service. Give an example of a store that would be on the opposite end of the continuum and explain their differences. Nordstrom’s level of service would be classified as full service. They have sales people that help with the fitting process among other things. Their customer service is their number one priority. The example given in the case study was of a Nordstrom employee paying for a cab ride to the airport just to return a lost ticket to a passenger. This is going above and beyond what is expected of a salesperson. On the other end of the spectrum would be self service. An example of this would be Wal-Mart. They have employees to help, but for the most part people get their own merchandise and make their decisions...
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