Companies understand that they cannot cater to all buyers equally in the market. Buyers are diverse in terms of numbers, location, and preferences. Likewise, companies differ in their capabilities to cater to various market segments. Therefore, companies, similar to Best Buy, must identify the market segments they can efficiently and lucratively serve. They must develop marketing strategies that prioritize customer needs and establish strong relationships with the right customers.
Most companies have shifted from mass marketing to target marketing, where they identify market segments, select one or more, and create tailored products and marketing programs for each. Rather than spreading their efforts thinly, firms now focus on buyers who are most interested in the values they excel at. Customer-driven marketing strategy is implemented based on the needs and preferences of customers, creating value specifically for them.
There are four main stages in designing a customer-driven marketing strategy. In the first two stages, the company selects the customers it will serve. In the last two stages, the company determines its value proposition – how it will provide value to its target customers. The figure below illustrates the process of designing a customer-driven marketing strategy. TASK 1: FOOD AND BEVERAGE INDUSTRY (Big Apple Donuts & Coffee) 1. BEHIND THE NAME The concept was developed by a team of passionate individuals with extensive experience in Malaysia, Singapore, Indonesia, and Thailand’s food and beverage industry.
On May 2, 2007, Big Apple Donuts & Coffee launched in Malaysia as it opened its inaugural store at The Curve. This establishment is a part of the Big Apple Interasia Sdn. Bhd, a parent company with multiple subsidiaries. The trademark store can be discovered in numerous prominent shopping malls nationwide, and there are ongoing plans to extend into China, Thailand, Vietnam, and the Middle East. Additionally, the company aims to identify appealing market segments.
Market Segmentation is the process that companies use to divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. The process of segmenting a market involves trying different segmentation variables, either alone or in combination, to identify the optimal way to view market structure. The major variables used in segmenting consumer markets include Geographic Segmentation, which divides the market based on geographical units such as nations, states, regions, countries, cities, or even neighborhoods. Demographic Segmentation involves dividing the market into segments based on variables like age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Psychographic Segmentation divides a market into different segments based on social class, lifestyle, or personality characteristics. Lastly, Behavioral Segmentation involves dividing a market based on consumer knowledge, attitudes, uses, or responses to a product. (Principles Of Marketing, 14th edition by Kotler & Armstrong)
Big Apple focuses on catering to a diverse customer base by offering a variety of donuts and beverages. They mainly utilize Demographic Segmentation to choose their customers. This is because customer preferences and consumption patterns tend to differ based on demographic factors. Furthermore, demographic variables are more measurable compared to other types of variables. Additionally, Big Apple considers age and life cycle stage when selecting potential customers, recognizing that needs and desires vary with age.
Big Apple utilizes various marketing approaches based on age and life cycle groups rather than offering different products. For instance, they introduce standard size freshly fried donuts with a range of filling and garnishing options for older generations. These can be purchased individually or as part of a beverage combo. Alternatively, for children, they offer “Donashi” – a donut with a square and small shape resembling sushi, complete with the same filling and garnishing.
In terms of target marketing and product positioning, Big Apple implements different strategies. Once various segments have been evaluated, the company must determine which segments to target and how many to focus on.
A target market is a group of buyers who have similar needs or characteristics and that the company chooses to serve. Market targeting can be done at different levels, including undifferentiated marketing and differentiated marketing.
a) Undifferentiated Marketing: This is a market-coverage strategy where a company decides to ignore differences between market segments and instead targets the entire market with one offer. The focus is on shared needs rather than what sets individuals apart.
b) Differentiated Marketing: This is a market-coverage strategy where a company decides to target multiple market segments and develops separate offers for each segment.
The objective is to increase sales and improve market position. c) Concentrated Marketing: a strategy that focuses on capturing a significant share of one or a few segments. d) Micromarketing: the customization of products and marketing programs to meet the specific needs and preferences of individual customers and local segments; this includes local marketing and individual marketing (also referred to as one-to-one marketing). (Source: Principles Of Marketing, 14th edition by Kotler & Armstrong) Differentiation and Positioning
The company must decide on a value proposition, which includes targeting specific market segments and creating differentiated value. This helps determine the positions the company wants to occupy in those segments. A product’s position is how consumers perceive it in relation to competing products on important attributes. To plan their differentiation and positioning strategies, marketers often use positioning maps that display consumer perceptions of their brands compared to competitors’ products.
Some firms may find it simple to select a strategy for differentiation and positioning. For instance, if a firm is widely recognized for its quality in specific segments, it may opt for this positioning in a new segment if there is a sufficient number of buyers who are seeking quality. However, there are instances where two or more firms will target the same position. In such cases, each firm will need to discover alternative methods to distinguish itself from the competition. Each firm must differentiate its offering by creating a distinct package of benefits that appeals to a substantial portion of the segment.
When it comes to a brand’s positioning, the most important factor is meeting the needs and preferences of specific target markets. Take, for example, the comparison between Big Apple and other coffee shops: they offer distinct product assortments and store atmospheres. However, both are successful because they have tailored their value proposition to their specific customer base. The process of differentiation and positioning involves three steps: identifying unique competitive advantages, selecting the most suitable advantages, and determining an overall positioning strategy.
The company has to effectively communicate and deliver its chosen position to the market. The magic of Big Apple Donuts and Coffee is not only derived from its products and brands, but also from the relationships, innovation, and diversity of its contributors who bring fun, energy, and success to the organization daily. Building relationships, pushing boundaries, and finding commonalities are all part of Big Apple’s true magic. The energy of Big Apple stems from connecting with people and genuinely understanding their preferences.
Big Apple is driven by the desire to ensure that their donuts will bring smiles to people all across the country, no matter where or when. DONUTS ARE THEIR WORLD ON A STAGE To enhance the wonder of Big Apple, they have implemented an open-kitchen concept in every store. Each store is uniquely designed to showcase the donut making process, creating a multi-sensory experience for customers. For the first time, customers can fully appreciate their meal after witnessing the entire journey of a donut, from dough to packing box.
Big Apple donuts are enjoyed by many for a simple reason – a promise to our customers that every bite comes with absolute satisfaction. It is the guiding principles behind our corporate philosophy, of all that we do, in every Big Apple store, and with every Big Apple employee.
This means our customers can take comfort in knowing that:
- Big Apple donuts are easily available in major cities and towns.
- Big Apple donuts can be enjoyed by all cultures.
- Big Apple donuts are always served fresh, warm and fluffy soft.
- The quality and taste of donuts are always consistent.
- Big Apple thrives on innovation, consistently producing fresh ideas, new flavors and value promotion to benefit our customers.
- Big Apple ingredients and products are imported and of the highest quality.
- Operations and hygiene practices strictly adhere to international standards and procedures.
- Big Apple donuts are made with low-sugar ingredients to keep calorie levels at the lowest possible.
4. CONCLUSION
Because of their commitment to being unique, Big Apple’s donuts differ from other brands in the market. The concept, packaging, and wide variety of donut choices make Big Apple a truly one-of-a-kind brand. With their tag-line “Every Piece is a Masterpiece,” Big Apple constantly strives to offer new and exciting options for donut lovers in Malaysia and around the world. Since its creation, Big Apple has remained dedicated not only to delivering fresh and delicious donuts but also to innovative thinking. They continue to fulfill this commitment with each expanding customer base.
