Is It Feasible To Change the Procedures Used By GUCCI Company to Create Better Customer Value and Save Money for the Company?

Is It Feasible To Change the Procedures Used By GUCCI Company to Create Better Customer Value and Save Money for the Company?

Table of Contents

Executive Summary ………………………………………………………………………………………………………1

Introduction ………………………………………………………………………………………………………………… 4

Background …………………………………………………………………………………………………………….. 4

What is social media? ………………………………………………………………………………………………. 5

Why social media marketing? ……………………………………………………………………………………. 5

Research Methods and Evaluation Criteria …………………………………………………………………… 7

Results …………………………………………………………………………………………………………………………. 9

Results from the company’s management team ………………………………………………………………… 9

Results from the customers’ end …………………………………………………………………………………. 6

Results from the company’s operation……………………………………………………………………………… 7

Cost………………………………………………………………………………………………………………………..11

Resources………………………………………………………………………………………………………………..11

Implementation Time………………………………………………………………………………………………..11

Conclusions and Recommendations …………………………………………………………………………….. 12

Conclusions……………………………………………………………………………………………………………..12

Recommendations…………………………………………………………………………………………………… 12

References……………………………………………………………………………………………………………….13

Tables

Table 1. A summary of the benefits of using social media in marketing………………………………. 10

Executive Summary

GUCCI is a leading fashion brand known globally but is struggling with its current procedures of marketing. If the company seeks to realize its mission of dominating the Italian market, it must consider changing the procedures used in marketing to create better customer value and save money for the company. Changing the procedures used in marketing implies adopting more aggressive methods of reaching more customers. Since the company already has powerful offline marketing strategies, the company should go a step further and exploit the online side. This report seeks to explore if implementing social media as part of changing the procedures of marketing at the company can help the company conduct marketing effectively to create better customer value and save money for the company.

Using social media as a platform for marketing has worked well for many companies such as Zappos, which has done well and set the standard for using social media in marketing their shoes online (Becton, Walker, Schwager, & Gilstrap, 2019). Implementing social media as part of changing the procedures requires GUCCI to set goals that align with its business objectives. The audience will then be evaluated, after which the competition shall be researched. An audit of social media will then be conducted, after which accounts shall be set up. The final process will engage in testing, evaluating, and adjusting the strategy and procedure. When implemented, the new system will allow the company to reach more customers, reduces the marketing costs, and will create more value for the company (Becton et al., 2019). Changing the procedures of marketing for GUCCI could, however, result in reduced sales if the strategy is not clear. It may also require additional resources to implement, may need more monitoring presence, and could result in misleading and false feedback. The report concludes that it is feasible for GUCCI to change its procedures and embrace social media marketing to create better customer value and save money for the company.

1. Introduction

Background

GUCCI is not entirely using the benefits and marketing opportunities provided by social media to reach out to more customers and conduct marketing effectively and efficiently (Becton et al., 2019). The current marketing procedures used by the company are offline and do not fully exploit customer needs and guarantee them satisfaction. The organization enjoys a strong customer base, and if the current marketing procedures used by the company are changed, better customer value could be created along with reduced marketing costs that could save money for the company. Envisioned to become a leading global luxury brand, the current marketing procedures do not operate within the mission and vision of the company. If the overwhelming objectives set by the company are to be realized, the company must change its current marketing procedures and embrace social media marketing. This report examines whether it is feasible for GUCCI to change its current marketing procedures and embrace social media to create better customer value and save money for the company.

What is social media?

Social media is a modern tool and technology that engages the use of online social platforms for public interactions (Kirtiş & Karahan, 2011). It is a new technology trend in which people can freely interact with one another and share information from one end to another since the users are hosted online and can easily reach one another at the same time. While social media appears to be a single word, numerous platforms form part of social media and can be used for public interactions and communication. Examples of the commonly used tools for social interactions and those that form part of the social media include Facebook, Instagram, and Twitter. Other less popular include Snapchat, Telegram, and Imo.

These tools are different and have different features for social interactions. However, they share the same approach, and most of the features jointly operate as one. For example, Instagram has features such as a user account where the user’s details are fed and hosted. In the same manner, Facebook has the same features even though they do not appear the same (Kirtiş & Karahan, 2011). For a person to use social media, they have to open a new account where they fed their user information so that they can be uniquely identified. This is because many active users of social media make it necessary for a person to use details and user information that can be uniquely identified. In these social sites, the user can share information such as photos, which may be in still or action photos and videos, which may be an action video of one that collaborates many still photos.

Why Use and Embrace Social Media Marketing?

Social media marketing is a modern approach to marketing in which social media platforms such as Instagram, Facebook, and Twitter are used to market and promote goods among consumers. It is a marketing approach that allows a seller to connect with the buyers through these online platforms (Kirtiş & Karahan, 2011). To reach potential customers, the seller brand must operate online. Similarly, the customer must access the internet to obtain the brands being promoted. The tool eliminates the need for the sellers to run in a physical channel or instead open a stall where they physically meet and interact with the customers. Therefore the buyers and the sellers do not have to interact and meet physically. The tool, therefore, offers many differential advantages over the traditional approach of marketing in which the seller and the buyer had to interact and engage in business physically.

Embracing the use of social media for marketing has several advantages associated with it (Ashley & Tuten, 2015). It is a fast means through which brands can easily reach out to a massive number of customers. Besides, the tool reduces the cost of operation when it comes to promoting brands. Ashley and Tuten (2015) assert that over the past, many companies have been actively engaging in roadshows, door to door marketing and other forms of one-to-one marketing but with the emergence of social media, the gap of reaching customers either door-to-door or physical interaction and only left when it must be done and when it is more effective. Social media also cuts on the time that a company uses to market its brands. This is as opposed to the old-fashioned approach of marketing in which the sellers had to spend a lot of time on fieldwork to promote their brands (Kirtiş & Karahan, 2011). With the current social media platforms, it becomes easier for companies to reach many customers. Social media also makes it possible to track marketing records and get consumer feedback more effectively. In this manner, the user company learns marketing trends and consumer needs more easily. Here is a summary of why brands need to invest in social media marketing.

Figure 1: A summary of the benefits of using social media in marketing

1. Research Methods and Evaluation Criteria

• To complete this project, Ashley and Tuten (2015) advise that comprehensive research should be done across all levels of management at GUCCI to ascertain the specific areas that social media shall be used in and those that it will aid in marketing.
• This process may call for engaging the majority of the stakeholders of GUCCI to gather information about how they perceive using social media as a marketing tool and how they would want the tool to be implemented.
• The possible gaps in the marketing of the current approach will be evaluated and shall be compared with the capabilities that the proposed approach shall offer.
• The two primary parties will, however, be the customers and those stakeholders directly involved in management.
• As mentioned before, the stakeholders shall be consulted about the proposed approach and to obtain their go-ahead to implement the tool. The company will then set their goals that align with the business objectives.
• This process will be followed by a comprehensive engagement of the audience, which in this case is the customer.
• Various social platforms shall be developed, and new accounts created to aid in the marketing process.
• However, as advised by Ashley and Tuten (2015), only three social platforms shall be created, and information about the company shared via these platforms.
• Products will be posted for online marketing. These sites will allow the customers to order for new products via placing a call or messaging.
• An interactive platform will be incorporated in these social media sites where the user will be directed to the company’s website for any potential purchases.
• Added features such as commenting on the products, likes, re-tweets, and sharing the products as well as making referrals shall be provided to the customers.
• The audience will then be evaluated, after which the competition shall be researched. An audit of social media will then be conducted, after which accounts shall be set up.
• The final process will engage in testing, evaluating, and adjusting the strategy and procedure.
• To obtain and collect reliable information from both the stakeholders and customers, Ashley and Tuten (2015) encourage the use of three methods, which include observing and recording the feedbacks, offering interviews, and questionnaires to gather how effective the platforms are when it comes to marketing. They will be offered through online platforms.
• Thereafter the organization will carry out a SWOT analysis to analyze the data whereby the strengths, weaknesses, opportunities, and threats will be evaluated.
• Organizational performance assessment tools will also be used during the analysis.
• To judge if the proposed plant is feasible, the variables of operation will be compared both before and after the implementation of the plan.
• In this process, Ashley and Tuten (2015) propose for a comparison to be made about the performance of the organization both before and after the plan whereby profit margin, customer satisfaction, and other variables of operation will be evaluated.
• Research Results

There are numerous results that were obtained from the implementation of the new system. The results can be categorized into three segments; the results from the company’s operating results from the management team and the results from the customers.

1. Results from the company’s management team:

• There was increased employee engagement with the use of social media platforms. The company’s management could easily obtain information from customers directly, engage them in other interactive processes, empower them to more purchases, and obtain data information for recording.
• The service time for operation was significantly reduced as most of the management activities were done online.
• The process improved the customer-employee relationship since both parties could directly engage one another.
• Employees operated with optimal motivation since most of the activities where they used to incur a lot of engagement and spend more time were now carried out more easily, cheaply, and faster.

1. Results from the consumers’ end

• The number of customers largely increased with the increment percentage estimated to be 11% of the previous sales.
• More customers engaged the support team for different reasons, such as making inquiries about the sales, ordering new products, and making recommendations.
• Customers reported having reduced the cost they incurred when making purchases and ordering for products.
• Customers operated with the least time possible. The online presence of the company made them experience fast service delivery.
• Customers freely expressed their views without fear, which ultimately helped in improving the products and services offered to them.
• Results from the company’s operation
• More sales were registered during this period. The online presence made the company increase its sales rate from 56% of the stock monthly to 71% monthly. This was accredited by the fact that customers could operate with the least amount of resources.
• The company operated at a reduced cost as compared to the previous operations where they used to engage and serve the customers directly and physically.
• The cost of operation was estimated to have reduced by a percentage of 15%. This was majorly attributed to the company’s online presence.
• The feedback rate about the services offered increased from 1.3 million customers monthly to 2.1 million customers. This represented a percentage increment of 38%.

Resources Needed

• Implementing social media as a platform for marketing for the company will require the company to dispose and make available some resources which may not be as expensive when compared to one-on-one and the current system used by the company.
• The company will require an educated technical team that is computer literate to help in the implementation process. This will not be a large team but will be less than 20 people.
• Another team will be needed to offer education and campaign for the new system to ensure that the consumers are properly informed about the change.
• Computers, internet connections, and a technical team to manage the process will also be needed. There should be 100 computers and strong network equipment since GUCCI is a large company with millions of customers to manage and serve.
• An average of 15 social media influencers will be needed. This will comprise a team of popular and powerful individuals who are recognized and will be used to influence the customers of the company’s brands.

Time

• The implementation process should be done procedurally to ensure that the process’ impact is not felt negatively.
• The procedure should also be done structurally and in bits to ensure that each phase is introduced. For example, the company will begin by introducing Instagram, followed by Facebook, then Twitter.
• Other platforms shall be considered, later on, depending on the performance of the first three to be adopted.
• The complete process should take six months upon which other platforms shall be introduced after 12 months.

Cost

• Here is a summary of the cost of all the resources needed.

1. Conclusions and Recommendations
2. Conclusions

• The changing procedure of marketing used by the company is feasible because the proposed system will register better results than the existing system.
• The current system will operate with a reduced cost but will still maintain a better value than the existing system.
• When implemented, the new system will allow the company to reach more customers, reduces the marketing costs, and will create more value for the company.
• On the other hand, changing the procedures of marketing for GUCCI could, however, result in reduced sales if the strategy is not clear.
• It may also require additional resources to implement, may need more monitoring presence, and could result in misleading and false feedback.

1. Recommendations

• The company should maintain both approaches of marketing i.e., the old system and the proposed system, to ensure that all customers are reached and that customers are presented with the choice of preferred platforms.
• The system should be implemented procedurally and in phases to avoid potential risks associated with a complete overhaul of the old system and the introduction of the proposed system.
• It is advisable that the company conducts education and brand promotion to help the users learn of the new system. This will require educating them on the potential benefits of using the proposed system, the risks, and possible ways to exploit the platform.

References

Ashley, C., & Tuten, T. (2015). Creative strategies in social media marketing: An exploratory study of branded social content and consumer engagement. Psychology & Marketing, 32(1), 15-27.

Becton, J. B., Walker, H. J., Schwager, P., & Gilstrap, J. B. (2019). Is what you see what you get? Investigating the relationship between social media content and counterproductive work behaviors, alcohol consumption, and episodic heavy drinking. The International Journal of Human Resource Management, 30(15), 2251-2272.

Berthon, P. R., Pitt, L. F., Plangger, K., & Shapiro, D. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business Horizons, 55(3), 261-271.

Di Gangi, P. M., Johnston, A. C., Worrell, J. L., & Thompson, S. C. (2018). What could possibly go wrong? A multi-panel Delphi study of organizational social media risk. Information Systems Frontiers, 20(5), 1097-1116.

Iankova, S., Davies, I., Archer-Brown, C., Marder, B., & Yau, A. (2019). A comparison of social media marketing between B2B, B2C, and mixed business models. Industrial Marketing Management, 81, 169-179.

Kirtiş, A. K., & Karahan, F. (2011). To be or not to be in the social media arena as the most cost-efficient marketing strategy after the global recession. Procedia-Social and Behavioral Sciences, 24, 260-268.