Customer satisfaction concepts and measurement

Marketing Ethics: "Consumers on the whole receive more benefits than risk from marketers knowing their personal information."

The customer is always right' may be the first commandment of marketing, but 'know thy customer' is perhaps the second, unwritten commandment and corollary to this wise advice. Knowing the customer's wants and behavior is critical to effective marketing (Kotler & Keller 2007: 84). This is especially true, given that United States economic demographics have become increasingly complex in recent decades, defying the classic segmentation social classes in the United States. The marketing channels to reach these segments have grown more diverse and specific, since the development of the Internet (Kotler & Keller 2007: 85). Knowledge of how a target individual consumer selects, organizes and interprets information inputs to create a meaningful picture of the world is power for the marketer, but does the consumer benefit as well? (Kotler & Keller 2007: 89). Evidence suggests that consumers do, so long as their data is used in an ethically acceptable fashion.

When the company knows about its loyal consumer base, it can tailor promotion and advertising strategies to address specific consumer needs and wants, and even conduct product research to create new goods and services that will interest target consumers. For example, the now-popular practice of bundling services in the telecommunications industry, pioneered by at&T's approach of providing consumers with multiple telecommunications services on a single bill which enabled the company to provide "long distance and wireless services at a single, low, flat rate of 10 cents per minute and "calling card services and a personal toll-free number to boot" was based upon research regarding consumer habits (Pedersen 19991: 1).

For companies to create such promotional strategies, they must have a better understanding of the thoughts, feelings, perceptions, images, experiences, beliefs and attitudes that become linked to the brand to satisfy consumer wants and needs better than their competitors (Kotler & Keller 2007: 90; 84). The more companies know about consumers, the better they are able to take "a non-linear approach to loyalty marketing" and links the brand to consumers "not only through the products or services they buy, but also via the way they live their lives...You've got to step outside your database. You are far more likely to build consumer loyalty if you bounce your internal data against other sources like Scarborough or MRI survey data and AC Nielsen panel data, for example. What types of sports events do they go to? Are they Web savvy? Are they frequent fliers? Once you develop that kind of intimate understanding of your shoppers, you can truly begin to cultivate their loyalties" (Pedersen 1999:1).

On one hand, this may make consumers uncomfortable -- but it may also mean that when a supermarket chain discovers that the majority of its customers have young children, the chain may include a new line of baby care supplies or discounted coupons on diapers bought in bulk. If a credit card company discovers that the majority of its users are not frequent fliers, it may create a new rewards points program that offers different promotional strategies than mere upgrades to first class.

Take for example a promotional strategy whereby Coca-Cola "joined forces with Random House to offer sample chapters of unpublished novels in cases of Diet Coke. The idea was hatched when Coke identified a nexus between Diet Coke drinkers and fiction readers" (Pedersen 1999:1) Everyone is a winner in this scenario -- the consumer gets to read a new chapter, Coca-Cola creates buzz about its products, and the authors gain a wider audience of interested readers.