Customization in Sales Offices: Nokia Telecommunication (NTC)
Customization in business involves modifying a product to fit the customer’s need. In the contemporary consumer markets, one-size-fits-all no longer applies, as businesses have to move from standardization to localization. Web-based marketing has enhanced differentiation opportunities for firms by enabling them to attain the ultimate levels of customization in their products. Full customization in sales offices is fundamental to satisfy changing customer needs as well as the overall corporate strategy. Customization promotes customer’s loyalty and engagement, but if used defectively, it can create imbalance in the company.
Nokia Telecommunication (NTC) has encountered numerous challenges in its international market, as it strived to expand its market share. When the firm opted for expanding its logistics system companywide, it risked its product development systems by delaying the time needed to finish the product cycle. Implementing logistics system also proved to be a difficult task, particularly in order-flow and transfer pricing. Sales department can assist in minimizing the challenges by maintaining flexibility in distribution of products, in addition to reducing operating costs, which consequently enhance business growth.
Although NTC has remained at the forefront in terms of technology, its sales office should be customized through tailoring promotions, product packaging and product pricing. The firm should embrace customization fully by delegating local activities to regional sales managers, but maintain overall sales coordination at the headquarters. Sales managers should strive to specialize in single product lines, rather than the overall product lines across the NTC divisions. For the firm to survive the competition, it has to remain market-driven. NTC can engage customers in the designing as well as specifications of its main products.
Customization has numerous benefits to both sales managers and customers. Customization enables local sales managers to exercise their innovative ideas, which could benefit customers and reduce the competitive pressure. If well executed, mass customization allows the firm to increase customer satisfaction, expand market share, enhance market learning, and increase profits (ElMaraghy, 2012). Customization offers differentiated and personalized product designs that encourage quick response from customers. Customization would also enable NTC to reach specific customers who can guarantee the firm a certain quantity of sales.
However, the cost of customization is that most firms struggle to meet the rising costs in order to satisfy their customers, who want more than just varieties, but quality products. In some cases, NTC may engage in wrong variations, leading to wrong prices. The corporation may subsequently results to offering customers products that worth more than what it could afford. NTC resources and expertise are still low to afford mass customization.
Over-customization can lead to a fragile position in the market if the firm promotes exceedingly complex products to the wrong customers. This can occur in technological products where customers are unaware of certain features in the gadgets. The complexity in logistic processes is not good for customization, as sales managers have to spend a lot of time I explaining such processes. When customers are exposed to too many options, they fail to make decisions. In addition, when customers are allowed to specify individual product features instead of choosing from a variety of products, operational difficulties is likely to emerge (MacCarthy, 2013). Postponement strategies usually emerge to delay some value-adding practices, especially when the firm engages in manufacturing numerous products.
Virtually all firms’ management have realized the need to offer exceptional services to their customers through inventing new programs that are capable of meeting the customer’s needs. Customization should be executed fully in sales offices to facilitate the attainment of customer needs using minimum cost. Customization may not be beneficial to a firm if it coerce the firm to spend more on production cost. Enhancing communication and coordination between sales department and other departments in the firm can assist in creating a profitable customization.
ElMaraghy, H. A., International Conference on Changeable, Agile, & Reconfigurable and Virtual Production (2012). Enabling manufacturing competitiveness and economic sustainability: Proceedings of the 4th International Conference on Changeable, Agile, Reconfigurable and Virtual production (CARV2011), Montreal, Canada, 2-5 October 2011. Heidelberg: Springer-Verlag Berlin Heidelberg.
MacCarthy, B. L. (2013). An analysis of order fulfillment approaches for delivering variety and customisation. International Journal Of Production Research, 51(23/24), 7329-7344. doi:10.1080/00207543.2013.852703