A customer-driven marketing strategy is composed of four main elements, which includes market segmentation, market targeting, differentiation and positioning. Market segmentation primarily involves understanding the distinct needs, interests and behavioral patterns of a niche consumer base. Companies divide consumers based on their particular characteristics, which allows them to design a creative marketing strategy tailored to meet the unique needs of its target consumers. Thus, marketing segmentation provides companies with knowledge on the demographics and changing trends of their consumer base.
Market target is the first step in the marketing strategy in which companies select the market that best fits their company’s needs and interests. Thus, the development of an innovative marketing campaign that reflects the interests of a company’s target consumers is key to gaining a loyal consumer base. Another important step in the marketing strategy is differentiation. Companies strive to differentiate their products and services from competition in an effort to deliver the highest customer satisfaction. Positioning is another key step in establishing strong brand placement. Thus, companies should arrange products in such a way to attract its target consumers and place it a step ahead of competing companies.
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Companies research four major variables in market segmentation: geographic, demographic, behavioral and psychographic segmentation. Geographic segmentation allows companies to divide the market into different states, countries, regions and communities. This provides them with an in-depth breakdown of the geographical area of their target market. Also, dividing the market into demographic groups based on age, race, gender, income level and other variables helps companies to obtain more information about their target market and develop a marketing strategy that will reflect a particular demographic segment. For instance, many women are more interested in beauty products and fashion while men may be more interested in cars and tech gadgets, thus this shows the variation of gender segments and provides companies with information to reach their target market. Behavioral segmentation categorizes consumer groups based on their buying patterns, attitudes, knowledge, and responses to a particular product and/or service. Psychographic segmentation groups consumers based on their social class, personality traits and lifestyles.
Starbucks is a highly profitable retail company with chains in both national and international markets. The coffee company has been able to reach its target consumers by focusing on demographic and behavioral variables related to income, occupation, brand loyalty and buying patterns. Many of Starbucks’ consumers are working class adults and college students who live busy lifestyles and go to Starbucks for the convenience and affordable, quality coffee items. According to Forbes, “the company continues to focus on its original product bundle that includes good coffee, quality service, and a nice environment to hang around” (Mourdoukoutas, 2013). Also, Starbucks focuses on geographic variables as well, and the company has been able to expand its brand globally, opening 500 new stores in China (Mourdoukoutas, 2013). Thus, Starbucks understands the unique interests and needs of its target consumers and have developed an effective marketing strategy to attract new consumers and retain a loyal consumer base.
Product positioning plays a significant role in the overall marketing strategy and buying decision of consumers. Once a company determines its niche segment and is knowledgeable of its target consumers’ distinct interests and behaviors, it can create unique product positioning to help promote its brand’s image, offerings and value. According to the European Journal of Business and Management, “product positioning is the art of matching your marketing message, with the desires, feelings, and beliefs of the particular type of customer that you know you can service better than anybody else” (Abdul, Islam, Hossain, Chowdhury, 2012). Thus, through effective communication outlets such as magazine ads, television commercials and online social media networks, a company can reach its target consumers and help to enhance consumers’ perceptions of its products. Ultimately, product positioning is detrimental to a company because it makes visible the valuable messages of a company’s product and helps it to stand out among its competition.
