Customer Value Differentiation vs. Customer Needs Differentiation
While comparing the differences between customer value differentiation and needs differentiation, one should note the greater progress of the former concept compared to the latter. According to Oh and Kim (2017), it is essential to emphasize the distinctions between these marketing principles to achieve the ultimate goals for the promotion and sale of goods and services. From an efficiency perspective, value differentiation is a more productive method of evaluating a target market for several reasons. Firstly, identifying customer needs is easier than studying relevant trends that affect demand, which makes value analysis more meaningful (Oh & Kim, 2017). Secondly, if a business segments its customer base according to the value dimension, it is a good practice to identify the most active buyers and form even more effective marketing offers. Thus, organizations can look forward to stable profit growth if value analysis is carried out adequately. Knowing about sales trends, business owners can connect with the target audience by promoting relevant services and focusing on such tools as discounts, customized products, and other forms of retention. As a result, in the long run, the customer value differentiation strategy is justified.
Meeting Individual Needs
Even though customer needs differentiation is inferior to value differentiation in terms of importance for sellers and marketers, it is possible to address real client interests, but with several conventions. As Holm and Ax (2020) argue, firms can only address customer needs if there is a guarantee of future profits. Otherwise, no business owner will strive to address the interests of buyers to the detriment of the company. The feasibility of such a decision is related to the available resources and the willingness of the business to realize the capitalization of income in the long term.
Several examples can prove the profitability of meeting customers’ needs. Holm and Ax (2020) note loyalty bonuses that some companies provide to new customers in the hope of retaining them and maintaining further close interaction. The authors also draw attention to the case of high competition between organizations providing services of the same type and argue that in this form of work in the market, focusing on individual client needs can increase profits (Holm & Ax, 2020). When citing modern advanced ways of the seller-buyer interaction as an example, one can emphasize the special conditions for the delivery of ordered products, which, in some cases, can be of decisive importance for customers and, therefore, have a positive effect on business profits. Thus, even despite the greater significance of the value differentiation approach for sellers and marketers, addressing client needs can justify itself, including financially.
Product Categories
Automotive
While assessing the automotive industry, the Ford Corporation is one of the first to deserve attention. This brand has been in business for decades, and from the perspective of addressing customer needs, the company offers more than standard options, such as driving comforts, package features, and other service options. According to Arslanagic-Kalajdzic et al. (2019), Ford actively uses modern technologies. This contributes to creating customized vehicles equipped with modern innovative solutions, which allows drivers to choose cars to their taste.
Airlines
As a target brand, the American airline Southwest is involved. This low-cost carrier caters to customers’ needs by offering alternative options for baggage transportation. In addition, as an affordable company, Southwest adheres to the strategy of flexibility in pricing control, thereby segmenting passengers based on their financial capabilities. Additional options, such as bonus loyalty programs, are an essential factor in maintaining customer demand and meeting the interests of target passengers.
Personal Care
An example of a personal care business that can be considered the one that can categorize customers by their various needs is Mac Cosmetics. A wide range of products allows customers to choose personal care products depending on skin type, aromatic characteristics, packaging volumes, and other properties. By choosing specific goods, clients demonstrate brand loyalty, thereby trusting the seller and getting what they need.
Hotels
As a recognized brand in the hospitality industry, Marriot should be mentioned. Although the hotel chain is in the luxury segment of the target market, the company promotes the principle of flexibility in its work by focusing on client needs and offering different options and services. For instance, guests can reserve rooms and halls both for individual use and for collective purposes, such as conferences and business meetings, which indicates the brand’s desire to meet various customer needs.
“The Design of Work”
One of the principles of marketing is to provide customers with a wide assortment to address their different needs. Given Keller and Alsdorf’s (2012) idea of the attractiveness of many things that perform not only basic functions but also additional options, one can point out the example of Ford. Cars are primarily a means of transportation, but for many drivers, their vehicles are also means of expressing personal identities and sometimes income. By producing a wide range of automobiles, including both the mass market and the luxury class, Ford addresses the need of some buyers to satisfy their interest in the attractive appearance of the car or its technical characteristics. This approach is consistent with the thought that many goods in the modern world are manufactured and promoted not only to perform basic functions but also as products that satisfy aesthetic or other needs.
References
Arslanagic-Kalajdzic, M., Žabkar, V., & Diamantopoulos, A. (2019). The unobserved signaling ability of marketing accountability: Can suppliers’ marketing accountability enhance business customers’ value perceptions? The Journal of Business & Industrial Marketing, 34(1), 166-175. Web.
Holm, M., & Ax, C. (2020). The interactive effect of competition intensity and customer service competition on customer accounting sophistication – Evidence of positive and negative associations. Management Accounting Research, 46, 100644. Web.
Keller, T. & Alsdorf, K. (2012). Every good endeavor: Connecting your work to God’s work. Penguin Random House.
Oh, H., & Kim, K. (2017). Customer satisfaction, service quality, and customer value: Years 2000-2015. International Journal of Contemporary Hospitality Management, 29(1), 2-29. Web.