The rise of interactive technologies such as social media and the internet in general (chat rooms, online blogs, emails, websites, etc.) has a great impact on digital marketing where goods and services are sold and bought on digital platforms. Their utilization has enabled organizations to increase their competitive advantage. Despite their role in ensuring that firms compete favorably in the market, a few studies have explored the different strategies these firms use in enhancing their competitiveness in the market. This paper explores the customer perceived value expression in online tourism service companies and its effects on customer satisfaction. The study surveyed online tourism service customers to discover, analyze, and infer the strategies to satisfy customers and gain loyal customers.
Keywords: customer perceived value, satisfaction, loyalty, digital strategies, and competitive advantages
The majority of companies struggle to attain sustainability; the ability to maintain a certain rate or level of sustainability. The inability to achieve sustainability is a major reason for many companies to fail. A competitive advantage is a concept of having something that a competitor does not. If the advantage is hard for a company's competitor to replicate, and it continues to build on the lead that it has built; this is a sustainable competitive advantage. The evolution of marketing from the traditional to digital marketing has reinvented the marketing strategies. In order to remain competitive in the market, companies have adapted to these changes (Patrutiu, Baltes & Loredana, 2015). How customer perceived value affects the customers satisfaction and loyalty is the main research question in this project.
1.2. The objective of the study
The success of a business depends on whether the company knows something that the competitors do not know (Aristotle Onassis). Knowing this unique thing and using it effectively can create a sustainable competitive advantage to help an organization to thrive in todays business environment. Achieving a sustainable competitive advantage in business is not easy. Even if a company is successful in an open market, competitors will try to imitate or produce a new product at a cheaper price and may do the job even better. Competitors can hire the same prototype of employees, target the same market, create same websites and succeed in reaching the same level of another company.
The strategy of creating a unique and valuable position for a company is accomplished by utilizing a range of unique activities e.g. specialization in a specific niche of the wider market. The main problem tackled in this paper is to be able to derive from the analysis done how customer perceived value impacts customer satisfaction and loyalty for an online tourism service company.
2. Literature Review
2.1. Customer perceived value
As mentioned before, sustainable competitive advantage refers to the attributes, assets, and abilities in one organization that are hard to replicate, yet create a lasting performance over the competition. Sustainable competitive advantage gives a company an edge over the competitors in a particular area or industry (Mar 2013). Mounting a sustainable competitive advantage is the best way of creating the dominance of a product in a given market. Consequently, this concept has been used widely in businesses to address the organizational goals of the companies (Coyne, 2016). Therefore, a company that needs to outperform the performance of other firms in a target market should ensure that its assets, attributes or abilities are superior to those of competing firms. As such, this competitive advantage may include access to large resources, geographic location, highly skilled labor, and technology to just mention but a few. Furthermore, an organization can gain a competitive advantage by offering superior value to the clients.
However, customers can only be informed about certain products or services and associated costs/benefits through advertising to the clientele (Faulkenberry, 2017). According to Faulkenberry (2017), customers become loyal to brands when the product offering is superior and the prices affordable; the reason why consumers would prefer one product/service over the other. Also, the author suggests that value proposition is an important aspect of creating a competitive advantage because through enhancing the consumer choices and expectations. Moreover, value proposition can enhance the companys competitive advantage by offering customers superior value. Michael Porter (2017) argued that an organization can achieve competitive advantage over its rivals through cost and differentiation advantage (Amadeo, 2017). According to Amadeo (2017), cost advantage refers to a situation where companies produce similar products and compete for the same market, and the cost is the only differentiating factor. The company that offers a lower price gains advantage over the rivals. However, differentiation advantage refers to a firm providing superior quality goods or services to those of the rivals.
Various studies have explored the concept of term competitive advantage exhaustively and defined the role of resources, ability, and attributes that make some companies outperform their rivals (Christensen and Fahey 1984; Porter 1980). Clulow et al. (2003) argue that a company is considered as having a competitive advantage is it is implementing a value creation strategy that no other player is implementing at that particular time. According to Powell (2001), a company can use a business strategy that manipulates resources at its disposal to create competitive advantage. Therefore, a viable business strategy should exercise control over the companys unique resources to create a unique advantage.
Michael Porter proposed three strategies, which he called generic strategies that can be used to create a competitive advantage for any company including cost leadership, differentiation, and focus (Porter, 1985). These generic strategies are frequently used in various organizations to enhance their competitive advantage over rivals. According to Porter, a firm needs to make a choice regarding the type and degree of advantage needed to achieve and maintain a competitive advantage over rivals or the industry. In this regard, the strategy is also referred to as comparative or differential advantage. Treacy and Wiersema also proposed a generic framework that any firm could use to gain and maintain a competitive advantage. According to this model, an organization must enhance its product leadership, operational excellence, and customer intimacy.
Figure two illustrates the Michael Porter model for competitive advantage with both the narrow and broad scopes. Cost leadership enables companies to sell their offerings at lower prices than the rivals. This is especially the case with companies that produce the same products but one gains a competitive advantage over the rest by providing the offerings for less. The benefits of the price value shift to the customer who enjoys quality products or services at a lower cost. It is expected that the company will still make profits from utilizing economies of scales (i.e. selling more units). Furthermore, the company can increase its profitability by shifting focus on reducing the production expenses, storage, distribution, and sales. For instance, a firm may focus on reducing the cost of labor, materials, and facilities to compensate for the reduced prices. Consequently, the firm benefits from lower manufacturing costs than those of the competitors. On the other hand, the differential strategies suggest that customers are willing to pay more to receive the benefits they see in a product or service over similar products or services. In this case, a company must strive to produce superior goods or services in addition to the pricing strategy. In this regard, they may need to invest more in strong research, development, and design to produce more innovative ideas. Delivering high-quality products at low prices is one sure way of creating a competitive advantage over the competitors.
The application of the focus strategy helps firms concentrate on niche markets rather than targeting everyone. While targeting everyone may be a good strategy for large companies with huge resources, focusing on niche markets may work better for smaller firms. According to this strategy, the focus of the company is on the specific needs or preferences of the consumers. Porter argues that the company should decide whether to take a cost leadership or differentiation approach once they have identified the target customers. As the company grows and incr...
If you are the original author of this essay and no longer wish to have it published on the thesishelpers.org website, please click below to request its removal:
- Essay Example: Tesla Autopilot and Auto Industry
- Canadian Airport Security - Term Paper Example
- Business Expansion of Didi Chuxing and Uber Technologies in Brazil
- Essay Sample: Technology Impact on Healthcare Decision Making
- The Effect of Pricing Strategies on the Purchase of Consumer Goods
- Research Paper: Cultural Factors that Influence the Purchase of Nike Shoes
- Essay on Effects of Technology on Ones Independent Thinking