From Customer Needs to Real-Value Market Offerings

Customer segmentation

According to Huthwaite research, “it is the customer who decides whether any benefit is real. Different customers, even in the same industry, have very different notions of value” (Rackham & DeVincentis, 2004). How then is it possible for a company to attract different customers with their market offering? Can there be real customer value and satisfaction?

Marketing offering is defined as “some combination of products, services, information, or experiences offered to a market to satisfy a need or want” (Armstrong & Kotler, 2008). In order to create a marketing offering, one has to understand what the customer wants and how this want is shaped by the environment. In very basic terms, we all have certain needs, such as food, clothing, shelter, affection, and self-expression. To this point, this is true for everyone. We all share these needs as common human needs. However, these needs can be shaped and changed depending on our environment, experiences, and individual personality. Depending on these, we may develop specific ideas on how to satisfy needs, such as preferring specific types of foods and clothing. This does not only vary from culture to culture, but also within each society. Different people from any one society can also have very different experiences so that there can be many different wants within any society. A very easy example is the buying power of people that may vary drastically from one neighborhood to another. Thus people have different demands of quality, quantity, presentation, etc. of their want. Understanding these and knowing how to segment the market into different groups with similar wants and standards enables businesses to customize their market offering to specific needs.

While each segment may still consist of different people that have not exactly the same wants, they are grouped as good as possible. As businesses cannot customize everything, such as marketing activities, to every single customers, they have to decide on a balance between customization and practicality: maintaining profitability.

One fundamental need for any market offering is that it will deliver real value to customers. Customer value can generally be described as the difference between benefits and costs. For that reason, there are generally two obvious ways to create customer value. One can either increase the benefits associated with a market offering or decrease its costs. Both will increase the customer value. One should be careful about predetermining this value because every individual customer may see benefits and costs of a market offering differently. It may sound easy to simply add extra benefits then, but in reality “knowing that an improvement in some functionality is important does not tell a supplier if a customer is willing to pay for it” (Anderson & Narus, 1998). Thus it is crucial to always understand ones’ customers and see how these customers can be served better in one’s specific market. Doing that and satisfying customers will not only create real-value market offerings but also a reputation and customer loyalty.

It is the customer who decides whether any benefit is real. Different customers, even in the same industry, have very different notions of value.

One mistake many businesses do is to focus on their market offering a lot more than on the benefits and experiences created by them. It is usually not the market offering itself the customer seeks, but the solution of a problem or need that the customer expresses. This phenomena is called marketing myopia, forgetting what the customer is really looking for. Many current products will serve customers well. However, the risk is that new solutions will come and replace the demand for these by being more convenient, trendier, less expensive, or anything else that creates superior value compared to the old solution.

In order to create real-value market offerings it is crucial for any business to understand one’s customers’ needs and how these are shaped by the market environment. It is not the market offering itself that creates value to customers but the ability to serve the customers’ actual needs. Thus, the saying “the customer is always right” should be implemented in all business codes.



  • Armstrong, G., & Kotler, P. (2008). Marketing: An introduction. (9th ed., pp. 38-41). Upper Saddle River, NJ: Pearson Prentice Hall.
  • Rackham, N., & DeVincentis, J. (2004). Creating real value for customers. Huthwaite.
  • Anderson, J., & Narus, J. (1998). Business marketing: Understand what customers value. Harvard Business Review.



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The Author: Konstantin von Brocke is a German international magna cum Laude business management student at the University of Wisconsin-Stout and enthusiastic about marketing and sales, strategy and risk management, and business development and consulting.


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