DESIGNING A CUSTOMER-DRIVEN MARKETING STRATEGY

Marketing management is defined as the art and science of choosing target markets and building profitable relationships with them.

The marketing manager must answer two important questions:

1. What customers will we serve (what’s our target market)?
2. How can we serve these customers best (what’s our value proposition)?

4.1 Selecting Customers to Serve

A company must decide whom it will serve. This involves dividing the market into segments of customers (market segmentation) and selecting which segments to target (target marketing). Marketing managers understand that they cannot serve all customers effectively. Attempting to do so often results in serving none well.

Demarketing refers to the deliberate act of reducing the number of customers or shifting their demand either temporarily or permanently.

Marketing management encompasses both customer management and demand management.

Example:

• Airbnb: Initially targeted travelers looking for affordable, unique accommodations and hosts wanting to earn extra income. Over time, they refined their target market and focused on high-value segments like business travelers and luxury stays. This selective targeting allowed Airbnb to enhance its value proposition and grow significantly. Read more about Airbnb's market targeting strategy.

4.2 Choosing a Value Proposition

A company's value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. Such value propositions differentiate one brand from another.

Example:

• Apple: Apple’s value proposition emphasizes premium quality, innovation, and a seamless ecosystem. This value proposition differentiates Apple’s products from competitors by focusing on high-end design, intuitive user experience, and integration across devices. Learn more about Apple's value proposition.

4.3 Marketing Management Orientations

Marketing management aims to design strategies that build profitable relationships with target consumers. But what philosophy should guide these marketing strategies? There are five alternative concepts under which organizations design and implement their marketing strategies:

1. The Production Concept

The production concept holds that consumers will favor products that are available and highly affordable. Management should focus on improving production and distribution efficiency.

Example:

• Ford Model T: Henry Ford’s production concept focused on making automobiles affordable and accessible to the mass market. The introduction of the assembly line drastically reduced production costs and made the Model T available to a broader audience. Explore the impact of the Model T.

2. The Product Concept

The product concept asserts that consumers will prefer products that offer the most in terms of quality, performance, and innovative features. Under this concept, marketing strategy emphasizes continuous product improvements.

Example:

• Dyson: Dyson has built its reputation on continuous innovation and high-quality products. Their vacuum cleaners, fans, and hand dryers are known for their advanced technology and performance. Dyson invests heavily in R&D to ensure product superiority. Read about Dyson’s innovation strategy.

3. The Selling Concept

The selling concept posits that consumers will not buy enough of the firm’s products unless a large-scale selling and promotion effort is undertaken. This concept is typically applied to unsought goods—those that buyers do not normally think of purchasing, such as insurance or blood donations. These industries must excel at locating prospects and convincing them of the product's benefits.

Example:

• Life Insurance Companies: Companies like MetLife and Prudential use aggressive marketing and sales tactics to promote life insurance. They employ extensive advertising campaigns and direct sales efforts to reach potential customers who might not actively seek out insurance. Learn more about insurance marketing strategies.

4. The Marketing Concept

The marketing concept holds that achieving organizational goals depends on understanding the needs and wants of target markets and delivering the desired satisfactions better than competitors. Under this concept, customer focus and value are the paths to sales and profits. It views marketing not as “hunting,” but as “gardening.” The goal is not to find the right customers for your product but to find the right products for your customers. Customer-driven companies deeply research current customers to learn about their desires, gather new product and service ideas, and test proposed product improvements.

Example:

• Amazon: Amazon’s marketing concept revolves around customer obsession, with a focus on delivering the best possible customer experience. By continuously adapting its product offerings and services based on customer feedback and data, Amazon has become a leader in e-commerce and cloud computing. Discover Amazon’s customer-centric approach.

5. The Societal Marketing Concept

The societal marketing concept questions whether the pure marketing concept overlooks potential conflicts between consumer short-run wants and consumer long-run welfare. It holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society’s well-being.

Example:

• Patagonia: Patagonia integrates societal marketing into its strategy by focusing on environmental sustainability and ethical practices. The company promotes products made from recycled materials and encourages customers to repair and reuse their gear. Patagonia’s commitment to social and environmental issues is a key component of its value proposition. Read about Patagonia's societal marketing practices.

Conclusion

Designing a customer-driven marketing strategy involves understanding the market and customers, creating compelling value propositions, and choosing the right marketing orientation. Each orientation—whether it’s production, product, selling, marketing, or societal—provides a distinct approach to building customer relationships and achieving organizational goals.

The key to a successful marketing strategy lies in selecting the right target markets and crafting value propositions that align with their needs and preferences. By leveraging real-world examples and case studies, companies can better understand how to apply these concepts effectively and adapt their strategies to stay competitive and relevant in today’s dynamic market landscape.