Understanding Your Customers

1. Defining Marketing Through a Business Example

Imagine a bakery known for its delicious cupcakes. Marketing for this bakery isn't just selling
cupcakes; it's understanding what customers truly crave. This involves:

Identifying customer needs: Maybe it's a sweet treat after lunch, a celebratory dessert, or
cupcakes for a special occasion.

Developing a customer-centric product: The bakery offers a variety of flavors, sizes, and designs
to cater to diverse needs.

Pricing competitively: Setting fair prices that reflect the value customers perceive.

Promoting effectively: Using social media, eye-catching displays, and loyalty programs to reach
the right audience.

Delivering a great experience: Ensuring fresh ingredients, friendly service, and a clean
environment.

2. Avoiding Marketing Myopia: Don't Be Like the Buggy Whip Makers

Marketing myopia is focusing solely on your product instead of the underlying customer needs it
fulfills. Imagine a company making buggy whips during the rise of automobiles. They might
prioritize selling more whips, missing the bigger picture of transportation evolution.

Here's how to avoid this trap:

Focus on customer needs: What problem are you solving for your customers?

Define your market broadly: Are you in the "camera business" or the "capturing memories
business"?

Embrace innovation: Be alert to industry changes and adapt your offerings.

Conduct market research: Regularly understand evolving customer preferences.

3. The Power of Perceived Value: Customers Pay for What They Value
Customer-perceived value is the difference between what a customer gets (benefits) and what
they give (price, effort). It's not just about the product itself.
Example 1: Airlines: Airline A might offer cheap tickets but have limited legroom and baggage
fees. Airline B might be pricier but include amenities and comfort, creating a higher perceived
value.

Example 2: Hotels: A budget hotel might prioritize a good location and cleanliness, while a
luxury hotel might offer a spa and personalized service.

4. Micro vs. Macro Environment: Understanding Your Business Landscape

A company operates within two environments:

Micro-environment: These are the factors directly affecting the company, like competitors,
suppliers, and customers.

Macro-environment: These are broader forces that impact the entire industry, such as economic
conditions, government regulations, and social trends.

For example, a Vietnamese coffee chain's micro-environment might include local roasters and
other cafes. However, the macro-environment might involve rising coffee bean prices due to
global trade issues.

By understanding both environments, companies can make informed decisions and adapt to
changing circumstances.

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