Please read the article linked below and share you opinion the important topic of target marketing.

Safari File Edit View History Bookmarks Window Help Q 8 Sun Jul 10 8:52 PM G brandknewmag.com C Welcome | Siena Heights University Topic: Discussion Topic #4 x Why Distinctive Customer Targeting Is a Smart Stra... Homework Help - Q&A from Online Tutors - Course... When former NBA superstar Magic Johnson was opening Starbucks coffee shops and a TGI Fridays restaurant in Los Angeles in the 1990s, he made changes to the product offerings. "I had to take the scones out of my Starbucks and put [in]sweet potato pie, pound cake, sock-it-to-me cake, peach cobbler," he told attendees of the October 2015 Stanford University Graduate School of Business "View from the Top" speaker series. "I was the first Fridays in the nation to ever serve Dom Perignon, Cristal, and all the high-end liquors.... That's what my customer base wanted." Here's what Andy Jassy, founder and current leader of Amazon Web Services (the Amazon business that rents out computing power and data storage), told the Financial Times about how he built that business: "We were targeting developers and startups who were not very well-served at the time [2003]." He went on to explain that he designed AWS to be pay-as-you-go because his target customer could not afford an expensive monthly subscription, which was then the standard model. These examples both illustrate an aspect of smart strategy that companies often overlook: choosing a unique definition of their target customer to gain a competitive edge or minimize head-to-head competition. For example, AWS now accounts for half of Amazon's profits and is the company's fastest-growing revenue stream. This was hardly a sure thing when Jassy was asked to start the business. As he told the FT, "If one of the old-guard technology companies had built something like this and had been first to market, it would have been much harder for us to come in later." By 2010 every large IT company - from IBM to Oracle to Google to Microsoft - had caught on. But Jassy had a seven-year head start, in large part because he chose a target market that allowed him to stay under the radar. Likewise, Magic Johnson chose to target minority neighborhoods that were underserved by popular chains. As Johnson told his audience at Stanford, "We were short retail options. We were driving an hour...outside our community to shop." Southwest Airlines created a distinctive growth path for itself by defining its target customer as bus and car travellers priced out of air travel. Sir Brian Pitman, the former CEO of Lloyds TSB, turned Lloyds from the U.K.'s banking laggard to its leading bank by being the first retail bank in the country to carve out "high net worth" clients as a separate business and to drop large companies as a target customer. When everyone else was 330 JUL 2 BD...9A6D.jp 10 4 O W T 176 Safar' File Edit View History Bookm 5 Window Help .0. E3 V G 0 '5 Ebrandknewmagcom 0| @ m + 33 Welcome | Siena Heights University '2} Topic: Discussion Topic #4 u Homework Help - Q&A from Online Tutors - Course... Likewise, MagicJohnson chose to target minority neighborhoods that were underserved by popular chains. As Johnson told his audience at Stanford, "We were short retail options. We were driving an hour...outside our community to shop." Southwest Airlines created a distinctive growth path for itself by dening its target customer as bus and car travellers priced out of air travel, Sir Brian Pitman, the former CEO of Lloyds TSB, turned Lloyds from the U.K.'s banking laggard to its leading bank by being the rst retail bank in the country to carve out "high net worth" clients as a separate business and to drop large companies as a target customer. When everyone else was focused on the wealthy few who could afford an automobile in 1910, Henry Ford turned his company from an also ran into the industry leader (with more than 60 percent market share in 1921) by focusing on making a car for the little guy. Of course, sometimes strategy works in the other direction: You choose your value proposition and let customers self-select. Consider Starbucks. Howard Schultz built the company by offering high-quality espresso and milk drinks in a comfortable setting that could serve as a "third place" between ofce and home, and he invited anyone and everyone to join in. He essentially let consumers decide for themselves whether they were his target customer. Sam Walton did something similar with his Walmart superstores strategy: He built massive, full-line warehouse stores with the lowest everyday prices and let the customers roll in. Sooner or later, though. this approach to strategy will require sharper thinking about target customers as both Starbucks and Walmart learned. In the early 20005, Starbucks accelerated store openings and added a broader food menu, making it look, feel. and smell increasingly like a fast-foodjoint, When McDonald's and Dunkin' Donuts then added premium (but affordable) coffee drinks to theirfast-food format, it exposed Starbucks for its high prices and comparatively mediocre food offerings. That's when Starbucks had to think harder about its true target customer. Schultz temporarily eliminated menu options such as breakfast sandwiches until the company gured out how to ensure their aroma didn't overpower the smell of coffee. He also banned automatic expresso makers, and redesigned stores to feel unique and sophisticated. It's worth mentioning that this was a bold choice, made in the immediate aftermath ofthe 2008 nancial crisis, when consumers had become ultraprice-sensitive. But it worked, and today, Starbucks is as strong as ever. For a similar reason chasing prot growth Walmart created a problem for itself in the late 20005 with its \"win- 6 Safari File Edit View History Bookmarks Window Help ' ' SunJul'lO 8:52PM .0. E3 V G 0 '5 Ebrandknewmagcom 0| @ m + 33 Welcome | Siena Heights University 3 Topic: Discussion Topic #4 u Homework Help - Q&A from Online Tutors - Course... For a similar reason chasing prot growth Walmart created a problem for itself in the late 20005 with its "win place-shoW' policy. This policy entailed stocking merchandise so that only the three leading brands in a given product line would get shelf space. Because these were the brands most in demand, the company believed, Walmart could get away with charging higher prices and thus increase its margins (which were under pressure). But the policy put the company into more direct competition with Target, which seeks price-conscious affluent consumers a somewhat higher-income demographic that prides itself on nding good deals. In fact. the executive who instituted the policy had previously worked at Target. But the new policy was a bust, and a few years later he left Walmart, Well-dened thinking on customer targeting would have helped him distinguish between smart strategy and plain ole nancial engineering. The best strategies always include a sharp denition of the target customer. And the more unique it is, the better. For example. if your competitors dene their target customers by where they are say, in certain parts of the world or in particular parts of town you could instead dene them by one or more of the following: The best strategies always include a sharp denition of the target customer. I How they buy (perhaps through specic channels) I Who they are (their particular demographics and other innate characteristics) I When they buy (for example, on particular occasions) I What they buy (are they price buyers or service hounds?) I For whom they buy (themselves, friends, family, their company. or their customers). The possibilities are innite. They key is to distinguish your strategy, and give your business a competitive edge. OOB@@9@