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1. Why has more progress been made on customer value differentiation than on customer needs differentiation? Many organizations have placed an emphasis on customer value differentiation as compared to customer needs differentiation as it ultimately becomes a better return on their investment. By building a rapport with their customers, organizations can identify which customers have the largest potential for growth and those who would be of the most value to the business (Liozu, 2016). Customer value differentiation can also lead to stronger brand loyalty amongst customers, which can provide numerous benefits such as customer retention, promotion via word of mouth, and increased brand value. By understanding the values of their customers, organizations can offer products or services to their customers which will not only meet their needs but also aligned with their values. When products or services align with customer values, there is often not much more needed to complete the sale. Customer needs differentiation, on the contrary, focuses more on specific purchases rather than building relationships with customers. Although such differentiation can be useful in certain situations, it does not provide the loyalty and subsequent growth when compared to customer value differentiation. 2. Is it possible to meet individual needs? Is it feasible? Can you describe three examples where it has been profitable? Although meeting individual customer needs is possible, if oftentimes proves difficult for organizations to complete successfully. Given the varying levels of differentiation that can exist within a customer base, depending on factors such as the the size of the organization or product/service being offered, meeting individual needs can become financially infeasible. It ultimately becomes an equation of benefits vs risks for the organization. If benefits outweigh the risk, meeting individual needs should become a priority as it can lead to increased customer retention, brand loyalty, and a plethora of other benefits. In order to mitigate some of the financial risk associated with meeting individual needs, organizations can look to product customizations as it allows customers have their individual needs met while still being able to make well informed decisions in regard to the capability of the organization due to the value of customization (Du et al., 2006). Three examples where product customization was used to meet individual needs while remaining profitable included Coca-Cola’s “Share a Coke” campaign in which bottles of their soft drink were labeled with common first names, Nike’s NikeID brand in which customers can customize all levels of their shoes, and Skinit where customers are able to design their own phone cases. All three examples have been highly profitable for their respective organizations and favorable amongst their customers. 3. For each of the following product categories, name a branded example, then hypothesize about how you might categorize customers by their different needs. Automotive Toyota is the largest automobile manufactures in the world (Kawai, 2022), selling over 9.5 million units in 2021 alone (Toyota, 2022). They offer a wide variety of automobiles, ranging from electric cars such as a BZ4X to luxury SUVs such as the Land Cruiser. For Toyota, I would categorize needs based on geographic segmentation or where the customers lived and/or worked.

Factors such geographic locations, climates, population sizes, etc. would be used to advertise the models best suited for that customer base. For example, those who live in urban areas may be more interested to having an electric or hybrid car, whereas those in more rural areas may prefer larger vehicles such as pickup trucks. This allows Toyota to cater to the specific needs of their customers and avoid issues such as excess inventory. Airlines Southwest Airlines offers a unique business model, in which customers are not assigned a seat when purchasing an airline ticket but rather are able to select their own seat based on their boarding assignment. For Southwest, I would likely use demographic segmentation to categorize customers. By using factors such as age, income, or occupation, Southwest can offer upgraded boarding assignments based on trends that would allow customers to select a more preferable seat. In offering targeted upgrades, Southwest can increase a sense of brand loyalty amongst customers who have no preferred airline. Personal Care Old Spice offers a variety of personal care products for men, including deodorants, bodywashes, and hair products. By using psychographic segmentation, Old Spice can categorize their customer based on their needs and subsequently have more targeted approaches to advertisements and sales. By analyzing factors such as personality, social status, and lifestyles respective the wants of their customers, Old Spice can identify and correct any gaps in their current strategy to solidify their position within a saturated market. Hotels Hilton Brand oversee a total of 18 hotels, which offer a variety of amenities based on the customer’s needs and preferences. By using behavioral segmentation, Hilton can categorize their customers and better determine which brand of hotel best suites their needs. By analyzing factors such as booking or purchase behavior, timing of booking, and desired amenities, Hilton can offer the brand of hotel best suites their customer. By having such a large variety of hotels, Hilton can easily build brand loyalty amongst their customer bases. Every Good Endeavor Keller illustrates that man has been given a since of freedom in regard to work, similar to how fish are able to utilize oxygen from water which allows them to live freely (Keller, 2012). Similarly, when organizations offer products or services, they offer a sense of freedom to their customers – the freedom to choose. As mentioned, Hilton offers a variety of hotel brands with each offering different amenities and services. By offering varying types of lodging, all under the Hilton Brand, the organization provides its customers the freedom to choose which hotel best serves their needs. Despite plethora of hotel brands, along with through their customer service and varying incentive programs, Hilton has been able to build a well-respected reputation within the industry. References

Du, X., Jiao, J., & Tseng, M. M. (2006). Understanding customer satisfaction in product customization. The International Journal of Advanced Manufacturing Technology , 31 (3), 396- 406. Kawai, T. (2022). Evaluation of Toyota’s Strategy for Electric Vehicles in Counteracting Platformers—Based on the Theories of Dynamic Managerial Capabilities and Dynamic Platform Strategy—. Journal of Strategic Management Studies , 14 (1), 67-87. Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God’s work . New York, NY: E.P. Dutton. ISBN: 9780525952701. Liozu, S. (2016). Dollarizing Differentiation Value: A Practical Guide for the Quantification and the Capture of Customer Value. Value Innoruption Advisors. Toyota. (2022). “ Sales, Production, and Export Results for March 2022 .” Retrieved from https://global.toyota/en/company/profile/production-sales-figures/202203.html

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