Customer engagement is route through which company /business organisation and brands create a business connection with their customer/stakeholder. This connection can be built with the help of internet or by face to face communication depending upon the type of customer and nature of product.in simple words the term customer engagement is denoted as business communication regarding service and product information. Online information is an engagement which includes blogs and online communities.
Through which consumer shares their experience and reverts related to products and now it becomes mainstream due to availability of internet. Moving towards offline customer engagement, it depicts as face to face conversation under which companies/brands educate person about products and services and it is mainly used to grow relationship with the help of one to one interaction (Audiopedia, 2017)
ROLE OF CUSTOMER ENGAGEMENT
Customer engagement is vital for long term survival of a business. In customer engagement the main aim of the business is to put emphasis on relationship quality and performance because clients are the roots of organisations / business. So that’s why most of the companies and brands try to stick the customers around their business to maintain long term relationship with the customers. Below there are important things which is vital for company/brand during customer engagement. (Gartner, 2016).
- To understand the clients requirements and fulfil their expectations positively.
- To look on Factors which encourage customer involvement
- To improve brand loyalty and reputation
- To catch new customers through word of mouth marketing
The role of customer engagement is to focus on the key area that are (Gartner, 2016).
- Customer satisfaction
- Adoption of new culture
- Expansion of business
Dominate logic, a term used to explain overarching philosophy that depicts about plans and procedure used in business. In simple, the techniques and plan which can be applied on business that is dominant logic. This logic doesn’t change according to business. The main motive for implementation of dominant logic is to earn profit. (Baird)
In other words, “Dominant logic is an elusive linkage between diversity” and performance. It is defined as mind-set or of company/business house through which top management focuses on problems and different behaviours of their customer and alter their dealing methods according to them to gain more profits and success. (C.K.Prahalad, 1986)
ROLE OF CONSUMER IN S-D (LOGIC) AND G-D (LOGIC)
The G-D (logic) is an old view of an industries under which companies deals with their clients for selling products only and Customers were oblivion in front of companies, They thought that consumer buy products for their needs. During mass production era (1860-1920) the main motive of industries was to manufacture products at large scale and to earn more and more profit.
The customers were bound to purchase from limited variety and at that time the word like CO-CREATION didn’t exists for the companies but under S-D (logic) most of the companies try to maintain relationship with their clients and the present scenario is also known as relationship marketing.
In relationship era customers are accessible to CO-CREATE products and give reviews about the products. Nowadays most of the companies like Amazon, Uber take instant reviews from the customers after providing service to enhance their quality.So,in this way role of customer is very important in S-D(logic) as compared to G-D(logic) (Faudree, 2016)
CUSTOMER BRAND RELATIONSHIP
After the studying of decades it has proven that brands like to maintain long lasting relationship with customers and companies try to enter in real life of people. In bygone days people didn’t have source to inspect about products. So at that time most of the brand try to make emotional connections with the people for selling their products. But now due to phenomenal changes in technology consumers start arguing about pros and cons of products. In most of business brands and companies try to make themselves different and try to think out of the box.
For instance, in early times if any customers like to book holiday package then customer mostly rely on mouth marketing or on a single company but at present if anyone like to take holiday package. S (he) like to check reviews online. Undoubtedly, their past experience is good or bad, But Customer like to choose that product which have good ratings.
So it is crystal clear that consumer brand relationship totally depends upon the various factors like quality, connections, nostalgic attachments and intimacy (through which brand and consumers know each other). (Strong, 2015). (Faudree, 2016)
After observing market trends now companies like to invest in services instead of marketing and most of the organisations like to promote themselves through digital marketing. On the flip side, in contemporary world most of the people become vide ores. So companies and brand like to share their videos on digital platforms to market themselves. As every cloud has silver lining.
So here silver lining about digital platforms is that it is little bit expensive for companies but still it is most effective way to engage with people.so by creating tailored videos for customers most of the companies try to market themselves. According to Derek Halpern (80-20) rule is the most influential rule in present marketing scenario. He believes that company should spent 20% of their time on Co-creation of the product and rest 80% of their time on content distribution. (cohen, 2017)
ROLE OF EXCHANGE
According to (Gummeson 2010, p. 411 claimed that) the most vital difference between S-D (logic) and G-D (logic) lies in the basis of exchange. Role of exchange occurs in different ways under service dominant logic (SDL) as compared to goods dominant logic (GDL).SDL exchange occurs between two or more parties for creating values.
It is variable based relationship which includes interchanging of services, commodities and other monetary transactions. In relationship marketing era most of the companies try to quench the thirst of customers in the form of service exchange and try to build emotional connection with them but on the contrary it was absent during production era. (Gummeson, 2010)
There are 10 foundational premises of S-D Logic.
- Axiom1 FP1 Service is the fundamental basis of exchange
- FP2 Indirect exchange masks the fundamental basis of exchange
- FP3 Goods are distribution mechanism for service provision
- FP4 Operant resource are the fundamental source of competitive advantage
- FP5 All economies are service economies
- Axiom2 FP6 The customer is always co-creator of value
- FP7 The enterprise cannot deliver value, but only offer value propositions.
- Axiom3 FP8 A service cantered view is inherently customer oriented and relational
- Axiom4 FP9 All social and economic actors are resource integrators
- Axiom5 FP10 Value is uniquely and phenomenological determined by the beneficiary
Source: (Gummeson, 2010)
According to foundational premises (FP1), Services are essential part of exchange, it is not similar (G-D) logic where goods assumed as a part of exchange. During mass production era companies try to create values with the exchange of goods which is totally reciprocates in S-D logic, where companies turns towards service marketing instead of goods marketing.
In addition, customer is not always co-creator of value, it is created by number of sources most of the companies try to put attention on the experience of consumers and try to ignite motivation in them to take part in business for creating value rich experience (FP2), Under (FP3) Goods are distribution mechanism for service supply it means value is created after selling of products to consumer.
For instance, one person bought a car from company then selling car is distribution mechanism for company after selling car, that company provides services to client in the form of insurance, roadside assistance, so the exchange between two parties complete the mechanism of exchange. In addition, Service exchange is only partially created by a single party it needs multiple actors to complete the process like media, government, suppliers, customers etcetera.
For example, if car company exchange a service of roadside assistance to consumer as a service then it depends upon customer to take benefits of that service it is incomplete without taking part of other party.it means both parties are crucial for service exchange for creating values in business (FP9).
Finally, value is always idiosyncratic, contextual depending on the situation of client. For example, if a person goes to learning centre to learn something but s(he) unable to understand about topics/lessons then for that person its value is zero but on the flipside s(he) understands everything about their topics than s(he) gets value from that learning .it means value is only created by those who need services. (Gummeson, 2010)
NAME: BMW GROUP (BAVARIAN MOTOR WORKS)
The BMW is known as one of the leading luxury car manufacturers in the world. This company roots back to Karl Rapp and Gustav Otto. In 1916, the company started their career in Germany and they deals in the manufacturing of aero- engines but at the time World War due to prohibition on the production of aero engines.
They entered in cars and bike manufacturing business it acted as a stepping stones for them. According to key figure analysis of BMW (2017), they have 129,932 employees which are still increasing with rapid pace. At present company deals in various sectors like automobiles, financial services, and digital energy solutions and in fleet management. (bmwgroup.com, n.d.)
Talking about their competitors BMW claimed that their traditional competitors are AUDI and MERCEDES and these companies always try to beat BMW in sale game by presenting lucrative offers and schemes to their customers. Some of the foreign companies like CADILLAC and JAGUAR also become rivals of BMW by steeping into European car companies but BMW claimed that they don’t have any danger from these companies, Further BMW also argued in their blog that most of the companies have their own reputation in market they are not developing at fast pace as BMW develops. (DeMattia, 2017)
CURRENT TRENDS IN BMW
There are several trends in a BMW through which they can engage with their customers and create value for their clients like financial services, Mobility, Alphabet and Digital Energy Solution. The main aim of these trends to provide value to customers, maintain relationship with them and also try to explain the customers that how their services help them in day to day life.
HOW BMW INFLUENCE THEIR CUSTOMER BY PROVIDING SERVICES CREATING VALUE
The table divulges the information about the products and brands owned by BMW and also provides the information about the services offered by company which creates value for the customers.
SOURCE: (bmwgroup.com, n.d.)
While taking a look on various trends it is noticed that most of the service and trends provided by BMW in the form of services is used for creating values for their customers. During case study BMW provides several examples like financial services, alphabet and mobility solutions:-
- By providing FINANCIAL SERVICES to their customer BMW promotes their business as well as they also creates value for their customer as SDL Perspective. So, BMW use the strategy of providing different type of lucrative loan and leasing schemes to their clients and try to inculcate their minds emotionally to buy their products. They also use different type of situational influence for engaging customers. In addition, they also provide insurance services and banking solutions. (bmwgroup.com, n.d.)
- ALPHABET is a service that influence customer engagement as SDL perspective.It is tailor made concept by BMW for their elite corporate clients which fulfil requirements of their customers and this service is fully loaded with ample of benefits.
According to BMW approximately 80,000 companies and organisation hired BMW for this service and BMW manages more than 6, 50,000 cars and other type of transportation for their customer. Majority of the companies like to hire BMW because it saves their cost and companies provide flexible time frame for their customers after working hours.
So,by providing services under the ALPHABET (sister concern of BMW) company get huge profits from the different parts of the world. So, by providing cars on rentals they get huge profit for the company they also get international market because most of the customer that BMW have they are mostly from corporate sector because BMW is luxuries brand so it is not in reach of middle class this company mainly targets elite class people.so in this way BMW engage customers by providing lucrative offers. (bmwgroup.com, n.d.)
- MOBILITY SERVICES is also considered as a stepping stones for the company in current scenario. Under mobility service company provide various types of facilities like (PARK NOW,DRIVE NOW,REACH NOW and CHARGE NOW).Under drive now customer can book a car through app and get a pleasurable experience of their favourite car and after reaching their places they can park anywhere at public place customer only pay for the time they use a car.
With another facility (REACHNOW) clients can book their favourite car and share the location of pickup. In addition, talking about PARKNOW service customer can book their parking place in advance by paying through the app. According to BMW “up to 30% of city traffic in Munich comes from cars trying to find parking space”. Therefore these type of service which is provided by BMW is very helpful in metropolitan cities because in each metropolitan city traffic jam is wayward.
So, in this way different type of strategies and services which is used by BMW helps them a lot to engage with customers and through these services they maintain emotional relationship with their customer and creates value for them. On the flip side, they advertise their company by providing cars on rentals and earns revenue from them, which clearly elucidates that how smartly BMW apply S-D (logic) in their business (bmwgroup.com, n.d.).
“Instead of the traditional “push” model of marketing campaigns, BMW uses engagement marketing which pulls people in by telling stories, driving conversations, and addressing customer needs and interests. Their goal is to involve customers in a deeper, more sustained relationship with their product or brand. “If they only talk to customers about what they sell them, then there is risk of turning out of customers, so that’s why BMW follows the motto of engagement marketing that is, “Ask not how you can sell, but how you can help”. (Sawhney, 2016)
Due to advancement in technology BMW also moves forward and join hands with digitalisation. And try to provide sheer pleasure to their employees Autonomous driving is one of the latest trend in BMW world, under which car is controlled by GPS, sensors, cameras which results in less car collisions and accidents and car is fully loaded with number of digital components which are capable to tackle every type of situations and conditions. This trend is a mainstream of automobile industries which spreads like a wild fire among different automobile companies (bmwgroup.com, n.d.)
Mobility services is also considered as a stepping stones for the company in current scenario. Through mobility services people get ample of benefits and they save huge amount of money which they spent as upfront cost and maintenance of vehicle. BMW provide competitive mobility solutions to their customers under which customer can share premium cars with easy rentals options.in addition, with the options of (ParkNow) which helps them to make off street and on street digital parking solution and( ChargeNow) helps customer with largest network of charging stations. (bmwgroup.com, n.d.)
Alphabet is tailor made concept by BMW for their elite corporate clients which fulfil requirements of their customers and also loaded with ample of benefits. According to BMW approximately 80,000 companies and organisation hired BMW for this service and BMW manages more than 6, 50,000 cars and other type of transportation for their customer. Majority of the companies like to hire BMW because it saves their cost and companies provide flexible time frame for their customers after working hours
DIGITAL ENERGY SOLUTIONS
The main aim of digital energy solutions is to provide economical and sustainable energy to their customer whether it is on local level or remote places. According to BMW with the help of these start-ups BMW reduce per vehicle energy consumption by 36% since 2006.in addition they also claims that from 2015 BMW gets 58% of their total energy by their in house energy management plants.it is also expected that by 2020 all of the BMW manufacturing plants will CO2 free. (bmwgroup.com, n.d.)
The main role of financial service is to attract customer in their business by providing them lucrative offers in leasing and financial services. More than 4 million of retail and commercial customers gets these facility by BMW financial services and it contributes more than one fifth of BMW total net profit. BMW financial service operates in more than 50 nations of the world. According to BMW every second BMW OR MINI cars worldwide get 45% of its finance or leasing service .