Your Product vs The Others…Which One Wins?
Nowadays, the Market offers a multitude of choices, each with features that would meet the needs and preferences of any customer, who would just search the global market, moving beyond the confines of the national one.
Customers are experienced enough to find the sellers that are most suited to satisfy their requirements in their daily purchasing decisions. They are able to do so without having to spend hours searching and keep changing brand depending on the inevitable ups and downs of any chosen brand in terms of price or quality. One question, however, remains: who can offer the best value proposition and remain the customer’s choice for the foreseeable future?
Usually, the market is divided or segmented into 3 sections. The first involves customers who only look for the cheapest products, regardless of quality; this is the type of customer that would be targeted by the adopters of an Undifferentiating marketing strategy. These customers don’t ask for much in return for not too much; they just need a simple product without any particular feature or characteristic, just as long as it is cheap. Strategists thus mass market these standard cheap products to their customers, which are likely to make up 60% of the local market, using the same promotion and distribution techniques and criteria.
The second segment is made up of customers who wish to buy good quality goods while containing their expenditure as much as they can. This type of customers is best served by a differentiated strategy that balances the quality of the offerings with affordable prices to cater to this customer segment and match their wishes or needs.
As a case in point, we can mention one of the biggest retail names in the world since 1951: IKEA. The IKEA concept is to provide a differentiated range of home furnishings, garden equipment and lighting products that are both high quality and with prices that anyone can afford; this is aimed not only at the segment that can afford high quality products. IKEA’s revolutionary merging of good prices and good quality was tied to the development of an innovative and cost effective method of preparing the product itself to meet customer expectations. The validity of the IKEA approach is borne by the more than $36 billion a year worldwide as reported by ‘Business insider’.
Doing it a different way!
The last market segment is made up of customers who seek the highest quality products or services; these will be more customized than those sought by the other market segments, as this last type of customer is demanding and can afford to pay much more. In this case, three strategies are involved. One is a micro-marketing strategy that involves tailoring the offerings for customers based on geographical, demographic (especially income and occupation), psycho-graphic (social class and lifestyle), and behavioral criteria. Then there is an individual marketing strategy, which provides each individual customer with personalized services or products based upon personal preferences. Finally, a mass customization strategy is usually also used to provide a few high quality customized products on a larger scale than that involved in the individual strategy.
In conclusion, to succeed in becoming relevant to and approachable by target consumers, a product’s overall brand development must be part of a well thought out, clear and consistent brand positioning. Thus, to attract the targeted customers and become market leader, it is important to begin by closely observing the target market to identify its needs, while also taking note of the competition, of their offerings, and of their market share.