January 10th, 2018
Customer-driven Marketing Strategy
The increasingly competitive business environment has meant that entities need to establish customer-focused marketing strategies to succeed. With the modern day customer having access to information and a wide range of alternatives to choose from, entities have been forced to focus on meeting customers’ needs in order to establish customer loyalty (Baird & Gonzalez-Wertz 2011). Accordingly, an entity’s marketing strategy need to be oriented towards customers who would derive the greatest benefit from the entity’s products. One company that has embraced such a customer focus in its marketing is Starbucks, a Seattle-headquartered coffee roaster, a company which this paper uses to exemplify the key components of a customer-driven marketing strategy.
A core component of a customer-driven strategy is identifying a specific market that the entity’s products are aimed to benefit. This may be achieved by conducting market research that identifies such demographics as age, gender and income levels of the entity’s customer base thus establish practices that seek to meet the needs of specific customer segments (Baird & Gonzalez-Wertz 2011). Starbucks for instance targets a relatively higher-income, more professional group of customers when compared to its competitors such as Dunkin Donuts (Economist 2008). By identifying the characteristics of the target market, the entity can then embark on the next aspect of the customer-focused strategy – meeting the needs of the identified market.
Identifying the target market helps an entity modify its products to meet the needs of such a market. Starbucks for instance, by focusing on high-income groups, aims to create a customer experience based on quality service that incorporates interests of such customer groups; for instance, it offers music and internet services in its coffee shops (Starbucks Corporation 2009). This strategy helps the entity maintain the perception that Starbucks’ customers are not only purchasing coffee, but also deriving a special experience that can only be found in Starbucks’ stores. This has enabled the entity to price its products at a premium when compared to competitors (“Starbucks-taking on the world” 2004).
A customer-based marketing strategy also aims to build customer loyalty thus promote repeat sales. This can be done through programs that reward customer loyalty. For instance, Starbucks introduced a loyalty card that enabled loyal customers to save and get better value offerings especially during the recent financial crisis (Starbucks Corporation 2009). By creating a strong relationship with the customers, such customers would find it difficult to switch to a competitor even when the competitor offers benefits such as lower prices (Barnes 2003).
A strong relationship with the customers helps the entity to make changes to its product or services based on customer feedback. By responding to customer feedback, the entity is able to meet the changing customer preferences on a continuous basis thus dissuade them from evaluating alternatives in the market. For Starbucks, the use of customer feedback to meet customer needs is exemplified by the setting up of a website – My Starbucks idea – where customers provide ideas they would like Starbucks to implement (Starbucks Corporation 2010). The Website also provides customers with the ability to view the ideas whose implementation has already started.
When customers identify with a particular entity, the entity can benefit from such customers by their promotion activities. This is especially enhanced by technological advancements that have created new ways (e.g. social networking) for people to engage one another even without physical interaction. Customer-driven marketing, in this respect, would focus on rewarding the customers who engage in such promotion activities. In Starbucks, the strategy can be implemented by offering free servings to customers who have consistently promoted the company resulting into new customers. Go to part 2.