Companies that place a strong focus on differentiation are concentrated on making a stance or distinction in the market

Companies that place a strong focus on differentiation are concentrated on making a stance or distinction in the market

DB Post 1 BUSI745 – Reply to – Felicia Dennison

Customer Value Differentiation vs. Customer Needs Differentiation Companies that place a strong focus on differentiation are concentrated on making a stance or distinction in the market (Olson, 2019).  Differentiation is a way to stand out among the competition.  Customer value differentiation is specifically important because customers always seek value in the products and services that they purchase.  Value is a constant, as customers want a good deal at a good price.  Value differentiation is especially important for businesses that cannot compete with lowcost competitors (Blitz, 2017).  When companies add additional value or originality to products, they can remain a competitor without losing profit.

It is important for businesses to understand what customers need and demand.  Although customer needs are important, they are constantly changing.  As customers needs shift and change, the call for value rarely changes.  The best avenue towards truly achieving a successful level of differentiation is through obtaining a realistic understanding of customers (Olson, 2019).  Comprehending a customer base involves analyzing what value means regarding the products and services that are provided.

Many organizations struggle to approach differentiation successfully, too often focusing on new ideas instead of customer value (Olson, 2019).  Companies that add value to products and services do not need to be concerned about having the lowest prices, because they offer features that other companies do not (Blitz, 2017).  Customers generally do not mind paying more if they feel that they are getting their money’s worth.  Focusing on customer value differentiation is an excellent marketing technique that keeps focusing on what customers want in the long term. Meeting Individual Needs

Although a difficult task, it is possible to meet individual customer needs.  Organizations that focus on customer solutions are often more successful (Worm et al., 2017).  This is often achieved through products and services that are easily customizable.  There are some companies that have the resources available to offer customers customized products.  These products will often cost more but are desirable to a specific target audience.  Best Buy offers personal computers that can be customized, offering additional features to customers who do not mind paying an upgrade fee.  Customers can add additional memory, video cards, processors, and power supplies.  Bentley and Rolls Royce are two additional examples that offer extended options for customers.   These companies have options which allow customers to create one-of-one vehicles to meet individual needs.  These luxury brands allow for unlimited customization at the point of purchase, as long as the customer is willing to pay an elevated price.

Branded Examples

Automotive

A branded example in the automotive industry is Mercedes Benz.  The needs of these customers would be categorized by: family (GLE series), enthusiasts (AMG cars), executive/business professionals (S class), status symbol individuals (G Wagon or Maybach), commercial customers (vans, tractor trailers, military vehicles).

Airlines

A branded example of an airline is JetBlue.  The needs of these customers would be categorized in three major categories.  Family’s needs would be met by offering lower rates to tourist destinations.  These customers prefer value over luxury.  Regional business travelers look for more comfort at an affordable rate.  Middle class singles or couples who seek luxury at a discount carrier price are the final group.  This group of customers is often looking to travel comfortably without breaking the bank.

Personal care

Redken is a personal care product that is utilized by individual customers and hair salons.  Individuals can purchase this product at local drug stores for an affordable price, still offering a higher level of haircare.  Hair salons use and sell Redken haircare products in salons.  This customer base not only purchases the products, but also advertises for Redken by using the products on customers directly.

Hotels

Marriot is now one of the largest hotel chains in the world.  Marriot offers a variety of hotel options to customers.  Business travelers can choose to stay at Select hotels, which offer accommodations at budget friendly price.  Families can choose from the Premium collection of hotels, which offer resort style accommodations for vacations and longer stays.  High-end clients and executive business travelers are accommodated through the Luxury line of hotels, which are more upscale hotels with a higher level of service.

The Design of Work

Hyundai’s are utilitarian vehicles, offering modern travelers with reliable transportation with minimal frills.  A car made by Rolls Royce can also serve that same practical purpose but at a level of luxury and performance that will make mundane tasks more enjoyable.  Drivers can have an exclusive traveling experience, which brings joy to car enthusiasts.  Owning a Rolls Royce can be viewed as a status symbol by some, which is an indication of hard work and obtuse accomplishments.  “But there must be an ability to enjoy the most simple and ordinary aspects of life, even ones that are not strictly useful, but just delightful” (Keller & Alsdorf, 2012, p. 41).  Customers want to find joy and value in the products that they use.  Products that are used daily, such as automobiles, are a big part of a customer’s life.  With added luxury and enjoyment, customers feel better when using the product.  This added value is why customers do not mind paying premium prices.  The hard work, detail, and craftsmanship that goes into building handmade luxury cars, such as Rolls Royce, can be appreciated and admired.

References

Blitz, A. (2017). Lessons from the steel industry: If you can’t compete on price, innovate your way to value-added differentiation. Strategy & Leadership, 45(5), 26-32. http://track.smtpsendemail.com/9064971/c?p=b0RQ4J0PCweBUStw32clXhAMZpAdfKx-lAlEvoKsT-gAvrIXlctjMybQ_61K_lzQ2ZwssRHPiewkceBOVqdHWuGF7jiyT46oiDHql9ZmGRw-c464t5saMc-q0GeyB_ZfGC-gDAuhX4Uuq9OnWiW2LA==Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God’s work. New York, NY: E.P. DuttonOlson, A. (2019).  Differentiation is not about customer needs, but objectives. The Magazine for Customer Service Managers & Professionals. Retrieved from: http://track.smtpsendemail.com/9064971/c?p=x5BInT-CfgSYR2keJOu6gZsAO0FE8TBHVHCmHzgep2CU3SzwookkTWV5EYCphgjPJtR5bwaAZqeK1dG9so6ApD8LIdy4LhIOAAvNdKW7YL4gNTTQGuSawSXOEhOOPDB5eALU4RVtIL2tbaU6slpCuDFVnjjLG72bVw1bnEl8Qn_1MCsjqK0pOy9NDtc5yelmrxTJaR6x8dJMJCBBXH42A3c_lzkkyTyF0dABzxZWC4A=Worm, S., Bharadwaj, S. G., Ulaga, W., & Reinartz, W. J. (2017). When and why do customer solutions pay off in business markets? Journal of the Academy of Marketing Science, 45(4), 490-512. http://track.smtpsendemail.com/9064971/c?p=pX2ixze3HbECr67x08KdZlOzGC-04qlGr-3kY8pw-itIRWFZLqeHDfh_rkF9RooBSH5KH4ZY8Abi3nrDE7vYp_PykvRZLx1VDWrC6OWDf0YyYAtYXGC_zlp2k-x6IO2qABg3WXb98Zsha6PRxzr3sdFpazntcaMoZHiMQe7GAeI=