D E S I G N - T H I N K I N G

The design-thinking emerges from innovation process which emphasizes on human observation, collaboration, fast learning, visualization of ideas, rapid concept proto typing, and concurrent business analysis. It encourages closely collaborative and integrative thinking across every function within an organization; designers, merchandisers including businesspeople and consumers. The design thinking reflects the launching of future product, service, and business model (Lockwood, 2009).

The design-thinking process allows designers and marketers to explore what their clients want with regards to their product and service. In addition to this, company can play safe and exploit design-thinking strategy once launching a new product and service and be able to improve towards radical innovation and maximize their company values. Since the actual users really involves in an early stage to evaluate a particular concept offered, it is likely that the final product/ service will be accepted by their target group. Conversely, if the users do not satisfy with the concept then it is a high possibility that the idea will be abandoned.  According to what was mentioned previously, having actual users involves in the research stage helps company safe cost of oversupplying unwanted demand, a waste of marketing costs as well as carefully improve and work closely more on product/service that creates the new solutions to serve clients’ needs.

In lights of service design, it is physically untouchable, complex, different touch point (new technologies, new relationships with customers, and new revenue models); hence, it is advisable to marketers to make intangible become tangible especially in a visualized way (Lockwood, 2009)

“Design management is primarily the ongoing management and leadership of design organizations, processes, and designed outputs- products, services, communications, environments, and interactions.  Design leadership and design strategy may be viewed as outputs of effective design thinking and design management” (p.xii Lockwood, 2009).

The design-thinking is very important to luxury brands because it can develop customers’ emotional connection during the design process which finally added values to the brand itself.

2008 Survey of Wicked Problems sponsored by Neutron and Stanford University indicated as following;
1. Balancing long-term goals with short-term demands
2. Predicting returns on innovation concepts
3. Innovating at the increasing speed of change
4. Winning the war for world-class talent
5. Combining profitability with social responsibility
6. Protecting margins in a commoditizing industry
7. Multiplying success by collaborating across silos
8. Finding unclaimed yet profitable market space
9. Address the challenge if eco-sustainability
10. Aligning strategy with customer experience


Design-thinking is created to respond with today’s tremendous wicked problems because it cannot be solved by a traditional linear fashion. “Wicked problems always occurs in a social context – the wickedness of the problem reflects the diversity among the stakeholders in the problem” (CogNexus Institute, 2000).

Bibliographies:

Lockwood, T. (ed.) (2009).  Design Thinking: integrating innovation, customer experience, and brand value, New York: Allworth Press.

Blum, A. (2006). ‘Thinking Design’ Dwell, Feb 2006, p.96-98.

CogNexus Institute (2000). Wicked Problems. Available at: cognexus.org/id42.htm (Accessed 22 March 2011).

Rowe, G.P. (). Design Thinking Cambridge: MIT Press.


Bloomberge Businessweek (2008). Neutron and Stanford's Survey of Wicked Problems. Available at: http://www.businessweek.com/innovate/next/archives/2008/04/neutron_and_stanfords_survey_of_wicked_problems.html (Accessed 22 March 2011) 

Loyal customer, yes we are!

“Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value” (pp. 5 Parvatiyar & Sheth, 2001).


The customer relationships process


It is an interchangeable that the terms customer relationship management and relationship marketing are used (Parvatiyar & Sheth, 2001). The customer relationship management or what it is called ‘CRM’ is valuable to company growth. It is an approach using the information technology to storage company’s customers individually so that the marketers can benefits from The customers’ purchase history as well as psychographic and physiographic segmentation since they are the vital tools for marketers to forecast and devise either short term or long term business plan to complement with customers’ retention as well as its company’s growth strategy (Peppers & Rogers, 1993).


CRM was defined as “an integrated effort to identify, maintain, and build up a network with individual consumers and to continuously strengthen the network for the mutual benefit of both sides, through interactive, individualized and value added contacts over a long period of time” (p.44 Jackson, 1985).


As mentioned in class that a good relationship always starts with a good fit between company and its client; hence, it is essential for company to know whom should they serve for especially luxury brands because they are preserved in a niche market where NOT everyone is able to reach. As a result, the process of customer selectivity helps company targeting and narrowing on individual they should spend time and money on. Therefore, the company should organize a proper marketing program and be able to tailor each marketing practice to appropriate customers in order to serve the best to create mutual value (Parvatiyar & Sheth, 2001).


The customer relationship levels are categorized to four stages. Most valuable to poor-relationship customers respectively: platinum, gold, iron and lead. Customer tiers is believed to be beneficial to the market research in order to make project planning easier (Zeithaml, Rust & Lemon, 2001). The platinum accounts is the most essential in the customer tiers because platinum customers are willing to try new service more than any other customer tiers. They are heavy users, less price-sensitive. Gold accounts is similar to platinum accounts except from the fact that they are more price-sensitive. Iron accounts seek for lowest price while lead account generates the lowest revenue to the company but their required of service level is the same as iron (Lovelock & Wirtz, 2007).

The cost of marketing program is usually more expensive when it comes to attracting new customers. Therefore, the company should focus to maintain its exiting clienteles satisfaction and retention. Loyalty drivers are what make customers return to the preferred brand or in the other hand, just stop buying the product. In class, we have discussed about what makes customers loyal to a brand in the luxury category, what are drivers and how can a luxury brands increase their loyalty. Then we came up with the whole idea that the company should be able to provide a positive experience to client’s taste. The satisfactory service is the key to steal customers’ heart because sales persons from many luxury brands are arrogant and look down on customers nowadays.


Below is the wheel of loyalty.

In the last stage, the company should monitor customers’ complaint and consider what would be the factors and why others do not. When the company resonate the complaints, an effective service recovery is the solution to maintain its existing clients because it would be too outrageous to any companies taking a risk when customers’ expectation fails. Therefore, service recovery strategies should be provided at all time in order to deal with different clients in varying situations. The company should plan an implementation recovery practices into two stages; the program before the actual problem emerges and the tactic to resolve after the problem emerges. The employee must be able to make a fast decision-making and response to the complaint. By this, the company has to provide the front-line employees who empower a decision-making equipped with well-trained capability. The employees must show empathy, apology, own the problem, fix the problem, provide assurance that the problem will be sorted out and fixed as well as provide compensation should this be an appropriate discipline.


When service encounter is unsatisfied, customers either take some actions or no actions or both by complaining to service firm, third party, taking legal action, switching to other brands or spreading a negative WOM. Hence, it is a disgraceful threat for company to produce a bad reputation. And what could possibly make customers annoyed enough to complain? There are for example wait times, misunderstanding and most importantly, personnel.


However, the culture also affects attitudes towards complaining i.e. individualism, masculinity and long-term orientation. For instance, a long-term orientation people might be in higher expectation about tangibility then any other type of customers. Therefore, the sales person should be able to present the service which satisfy them.


Bibliographies:


Parvatiyar, A. and Sheth N. J. (2001). ‘Customer Relationship Management: Emerging Practice, Process, and Discipline’ Economic and Social Research, 3 (2) pp. 1-34.


Zeithaml, A.V., Rust, T.R. and Lemon, N.K. (2001). ‘The Customer Pyramid: Creating and Serving Profitable Customers’ California Management Review, 43 (4) pp.127-128.


Lovelock, C. and Wirtz J. (2007). Services Marketing People, Technology, Strategy (6th edn), Singapore: Prentice Hall.


Peppers, D. and Rogers, M. (1993). The One to One Future: Building Relationships One Customers at a Time, New York: Doubleday.


Jackson, B.B. (1985). Winning and Keeping Industrial Customers: The Dynamics of Customer Relationships, Lexington, MA: D.C. Heath.

The Servicescape

What would be the first thing which grasps your attention and lure you into its store? If you walk pass Selfridges, Harrods, Liberty or Harvey Nichols- my favourite one, you would see how important the first impression of service design is. Speaking clearly with regards to this matter, service design or servicescape is known for the physical evidence and experiential surrounding provided by the brand. The practical service design should be able to create an atmosphere through the use of emotional state that enhances as well as trigger customers' buying decision in store.


Baker’s framework suggests the combination of physical evidence consists of three main dimensions which are social, design and ambient dimensions. The social dimension covers all people in the same environment including sales person as well as other shoppers. The design dimension refers to physical appearance and nature environment. The ambient dimension covers temperature, air quality, noise, music, space, layout, equipment, furnishings, signs, symbols & artifacts, signage, personal artifacts and style of decor.


Sullivan and Adcock (2007) state that the experience of shopping at the store influence the buying decision more than quality and price level of product ranges; therefore, it is advisable for retailers to carefully pay attention to any experiential elements which affect its clienteles’ perceived store shopping experience (PSSE).




Mehrabian Russell (MR) stimulus response model indicates customers’ behavior influential factors by store stimulus. Each shopper generates a certain mood state which reflects individual buying decision; buy or not buy.
“The basic premise of the model is that a shopper’s perceptions of, and behavior within, a retail environment are the result of emotional states created by that environment” (p.135 Sullivan and Adcock,2007).


Sullivan and Adcock (2007) specify that MR model is divided into three fundamentals which are environmental stimuli, emotional states and behavior. In the beginning stage, the customers process store stimuli which are prevalence into three dimensions as discussed earlier; social, design and ambient dimension. Each shopper processes, analyzes and perceives store stimuli in a unique individual way. In this stage, mood state is development through store experiencing which vary into two variables: pleasure and arousal. Pleasure refers to when a customer feels good about the environment while arousal refers to when a customer is being motivated to buy a product. Finally, the third stage is the behavior; either approach or avoidance, bases on an individual mood state according to the earlier stage.


Service Culture

“The Contributions we willingly make to out organizations create a collective strength that individuals working toward selfish ends cannot achieve alone. It is the collection of individual efforts that, when added together, create a true customer serice culture and make life and work more fun” (p.3 Martinez and Hobbi,1967).

What makes the brand so powerful lays on the service culture a particular brand offers to its clienteles.  A culture is a basic set of shared values, attitudes, beliefs and norms among a group of people. A Corporate culture is a subset of culture which shared values and beliefs are believed to be solid when it is being applied by people within the same organization. Therefore, human resource strategy should be planned clearly within the organization. As a result, an appropriate training system should be able to acknowledge its employee regarding their companies’ cultures in order to convince and conform all employees in the same direction. The training programs must improve human resource by means of enhancing employee competency, soft skills and know-how in order to perform in effective and efficient manners that reflect the holistic image of the brand.

The service culture should indicate an excellent customer service; for instance, positive attitude, well-manners, attentive, consistency, flexibility, sincerity, good communication and quick response to customers (Martinez and Hobbi, 1967).

In the rapidly changing and competitive world, the brand should distinguish themselves from their competitors. Since the unique selling point in Luxury market reaches some difficulties in addition to the product differentiation where many brands copy each other, I believe customer service with well-trained staffs could survive the company for longer. Customer service cannot be imitate because it is at the heart of employee who are trained, not that anyone could imitate by observation.

“Customer-loving person who relates comfortable to a wide variety of people and empathizes easily is the natural seed of service culture” (Bassett, 1992). However, employees have to be motivated to perform under proper circumstances as well i.e. rewards including empowerment, commission, praise, and etc.

Servicescape Observation

I have also done servicescape through the observation at Mulberry, Bond Street branch. 

I will define the store elements into 7 categories as following;

• Street: It is located in Luxury brand shopping arcade- Bond   Street. There are four lanes in front of the store where one  lane could be park for a short drop-off for taxi. Hence, its clients will be convenient traveling to this store. Moreover, there is NO bus stop that might forbid its clients to see.
• Entrance: The door was open and it was too welcoming because actually luxury brands should filter its customers through their effort and confidence of opening the door. There is no focus point because of the clutter of product rages and the circular shoes area which is located in the middle of the store. According to the threshold, I could see the staff at the door but they were talking to each other over my head. Besides, the distance of the first product I could reach is only 1 metre from the entrance.
• Environment: The use of decoration made from wood that is considered to get along well with its brand DNA.The use of warm colour which match with season.
• Browsing: There is NO natural flow but depending on customers preferences because Bags are located on the right hand side while clothes are located on the left hand side. However, the first counter which is filled with bags are the bit on left hand side in front of the entrance so the customers do not need to turn left or right but just head straight when entering the store. Hidden area of classic goods which should change from solid wall to transparent one so that customers know what is inside. Hidden idea of shoes section which should be located either on left or right, not in the middle as present.
• Display: Lighting is not too bright and makes customers feel warm. Wide ranges of product sizes, colours and styles. The shelves are too high for customer to grasp the product as wel as some shelves are too low and very near the floor so that the customers will not pay much attention to those products. Too many changing rooms makes the store looks not exclusive and no curtain or proper partition so customers might lose privacy. The price tags are inside the bags and very difficult to find as well as a very small transparent sticker of price on the shoes.
• Staff Contact: NO eye contact except the manage, NO greeting upon arrival, and NO help offered
• Selling Situation: The staff did not really find out what I wanted and the worst is that I was actually trying to buy the product.

Recommendations

• The door should be closed at all time and a doorman should help customer opening the door once see that they try to get in. 
•  Well trained staffs: pay attention on customers and greeting
• Move the shoes area in either way
• Should be a focus point and possible for customers to see through the shop until at the back of the store
• Proper partition for changing rooms and decrease it to three rooms must be enough
• Instant cleaning after serving coffee or tea
• Provide more seating spaces for awaiting couple.A

Bibliographies:

Sullivan, M. and Adcock, D. (2007).  Retail Marketing (3^rd edn), London: Thomson Learning.

Swartz, A. T. and Iacobucci, D.  (ed.)(2000). Handbook of Services Markering & Management, London: Sage Publications.

Jang, S.C. and Namkung Y. (2008). ‘Perceived quality, emotions, and behavior intention: Application of an extended Mehrabian- Russell model to restaurants’ Journal of Business Research, 62 (4) pp.451-460. 

SciVerse Collection[online]. Available at: http://www.sciencedirect.com/ (Accessed 8 March 2011).

Martinez, M. and Hobbi, B. (1967). Building A Customer Service Culture; the seven service elements of customer success, North Carolina: Information Age Publishing Inc.

Bassett, G. (1992). Operations Management For Service Industries: competing in the service era Westport: Greenwood Publishing Group, Inc.