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DIFFERENTATION AND PERSONALIZATION STRATEGY OF
GLOBAL COMPANIES
Elov Olimdjon Komilovich
Navoi State University, " Geography and Basics
of Economic Knowledge." Lecturer
Tojiyev Mumtozbek
Navoi State University, 4rd-year student at "School Management."
E-mail: mr.olimdjon@gmail.com
https://doi.org/10.5281/zenodo.14227427
Abstact.
This article analyzes the relationship between differentiation and
personalization strategies on a corporate scale and their impact on business
success. The differentiation strategy is based on the unique characteristics of a
product or service that enhance the company’s ability to stand out from
competitors. Meanwhile, personalization involves providing services or
products tailored to the individual needs of each customer. Throughout the
article, the importance of these strategies for companies, methods for their
effective implementation, and examples from the experiences of global
companies are examined. Additionally, the role of technologies, particularly
artificial intelligence and big data, in creating personalized approaches for
customers is explored.
Keywords:
Differentiation, Personalization, Corporate Strategy,
Employees' Personal Needs, Flexibility
Introduction.
In today's rapidly changing market conditions, companies
must utilize effective strategies to maintain competitiveness and drive growth.
One such strategy is differentiation, which involves developing features that
distinguish products or services from competitors. Through differentiation, a
company not only expands its market share but also increases customer loyalty.
At the same time, personalization focuses on meeting the unique needs of each
customer, fostering deeper connections and enhancing customer satisfaction.
This article examines how differentiation and personalization strategies
influence corporate success, explores methods for their effective
implementation, and analyzes ways to enhance these approaches through
technology.
Differentiation
is a strategy for distinguishing a product, service, or
process from competitors by highlighting its unique features. Through
differentiation, companies or organizations aim to strengthen their market
position by tailoring the design, quality, additional services, or other aspects of a
product or service to meet specific customer needs. In this way, a company
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creates a unique product or service that is more valuable and relevant to
consumers. The term originates from the Latin word "differentia," which means
"difference" or "distinction."
For example, Apple's differentiation strategy is
remarkable. The company not only consistently
employs strategies that set it apart from
competitors but is also known for producing
entirely different systems and products with
unique dimensions. The key factors influencing
Apple’s strategy include the following:
Brand loyalty:
Apple has a loyal and passionate
customer base willing to pay premium prices for
its products and services. Apple customers are
more likely to purchase multiple products from
the same brand, such as iPhones, iPads,
MacBooks, AirPods, Apple Watches, and more.
Additionally, Apple boasts a strong brand identity
and reputation that not only attracts new
customers but also retains existing ones. Statistics
show that the company produces various
products, which helps establish a complete brand
ecosystem.
Innovation:
Apple is renowned for its continuous innovation and
creativity in developing new products and features that address the evolving
needs and preferences of its customers. Apple is also considered a pioneer in
introducing industry-shaping technologies and standards, such as the
touchscreen, App Store, Face ID, wireless charging, and more
.
Quality and Design:
Apple strives to ensure its products and services are
user-friendly, high-quality, and modern. The company pays close attention to
every detail and aspect of its products, from hardware to software, packaging to
customer service. Apple’s products and services are also reliable and secure,
meeting customer needs and building trust.
Exclusivity:
Apple creates a sense of exclusivity and scarcity around its
products and services, which enhances their perceived value and demand. By
limiting the availability and distribution of its offerings, Apple makes them more
attractive and desirable. Additionally, Apple controls the pricing and marketing
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of its products and services, avoiding discounts and promotions that could dilute
its brand image and positioning. These strategies have proven effective, as
reflected in Apple's financial performance in 2023. The company generated
$383.2 billion in revenue, with 52% coming from iPhone sales. Apple's services
division was its second-largest segment, accounting for 22% of total revenue. In
2023, Apple sold 231 million iPhones, 49 million iPads, and 22 million Mac and
MacBook units. The company also sold 75 million AirPods and 38 million Apple
Watches. Apple Music reached 93 million subscribers, while Apple TV+ had 47
million subscribers.
Here’s a summary of Apple’s annual revenue from 2014 to 2023,
showcasing its remarkable growth over the years:
1 - Table
Personalization
is an approach based on analyzing each customer's
unique needs, purchasing habits, and preferences, then creating tailored
products, services, or offers. Under this strategy, companies collect detailed
information about their customers, analyzing their purchase history and
interests to better understand their desires. Personalized strategies typically
involve several methods, such as offering discounts or exclusive deals based on
customer behavior, providing personalized recommendations based on buying
habits, or creating special services for highly loyal customers.
The main feature of this approach is making each customer feel valued by
offering them a personalized experience, setting them apart from other
customers. By doing so, personalization fosters stronger, more sincere, and long-
term relationships with customers. This strategy helps enhance customer
satisfaction and loyalty by giving them the opportunity to choose services or
products that are more suited to their individual needs.
Example:
Before and
after the emergence of Amazon, there is a sharp difference in the e-commerce
sector. The global e-commerce giant has redefined the standards for online retail
and shopping services, enabling maximum utilization of market business
models. The consistently growing sales figures are evidence of this – in 2023,
Amazon's net sales revenue worldwide amounted to nearly 575 billion USD. Due
to its global scale and reach, Amazon is one of the most valuable brands in the
world. Amazon is one of the leading companies that perfectly implements a
Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Billio
n
182.
6
233.
6
215.
4
229.
2
265.
5
265.
5
274.
5
365.
8
394.
1
383.
2
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personalization strategy. By offering personalized services and products to its
customers, it enhances customer satisfaction and strengthens their loyalty.
Below are some examples of how Amazon's personalization strategy is
implemented:
Creating customer profiles and data collection:
Amazon
collects a wide range of data about its customers, such as:
Customer purchase history
Product search history
Reviews and ratings
Shopping behaviors and items in the cart
With this data, Amazon creates individual profiles for each customer and
recommends relevant products and services based on these profiles. According
to research, more than 80% of buyers choose Amazon due to fast delivery and
relevant recommendations.
Personalized recommendation system:
Amazon's most powerful
personalization tool is its recommendation system. The recommendation system
suggests new products to customers based on their searches, purchases, and
interests. For example, if a customer has previously purchased a book, the
system will recommend similar new books. If the customer is more interested in
a particular category of products, items from that category will be displayed at
the top of the page.
Recommendations on product pages:
Each product page includes
recommendations such as "Customers who bought this product also bought
these items," allowing the customer to explore similar products.
Purchase history-based reminders:
Amazon sends customers
reminders to repurchase products they have bought before when they are
running low. This is particularly effective for consumables, household items, or
groceries, as customers can easily find and replenish the products they purchase
frequently.
Personalized marketing campaigns:
Amazon sends personalized
marketing campaigns to customers through email and push notifications. These
notifications include information about products the customer is interested in,
discounts, or similar items. When the customer visits Amazon's website,
advertisements or offers tailored to their needs are displayed.
Personalized offers in Prime service:
For Amazon Prime members, the
company provides special personalized offers and discounts. Prime members
can access exclusive video and music content based on their interests, as well as
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fast delivery options. Through this, Amazon enhances customer loyalty by
offering services that are specifically tailored to its members.
Recommendations based on product reviews and ratings:
Amazon
analyzes customer reviews and ratings to select the most popular and highly
rated products to recommend to other customers. In this process, the
customer's unique preferences are also taken into account, offering them the
most suitable products.
Advantages of Amazon's personalization strategy
Increasing customer loyalty
: Personalized experiences enhance
customer satisfaction and loyalty. Amazon pays individual attention to each
customer, helping them feel valued.
Increasing sales volume
: Through its personalized recommendation
system, Amazon encourages customers to make more purchases. The more
relevant products customers see, the higher the likelihood they will engage with
them, which increases the company's sales volume.
Expanding the Amazon ecosystem
: Amazon is not just an online store,
but also includes services such as Alexa and Prime. Through these services,
Amazon creates an integrated system that meets all of the customers' needs,
aiming to convert them into long-term customers.
Let's examine together what benefits and advantages such a reminder can
bring to the manager.
Amazon's 19-year 1-graph
For the first time in nearly a decade, Amazon reported a net loss of 2.7
billion US dollars in 2022 for its online retail platform. However, in 2023, the
net income rose to 30.4 billion US dollars.
In 2022, Amazon was recognized as the most trusted brand by US
consumers. Amazon has the capability to deliver its products to more than 100
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countries and various regions. Customers complete 28% of Amazon purchases
in 3 minutes or less, and 50% of purchases are completed in under 15 minutes.
Through its personalization strategy, Amazon has successfully improved
customer satisfaction by providing tailored approaches. In this way, Amazon
strengthens trust in its brand and maintains a strong position in the market.
Conclusion.
Amazon and Apple's
business strategies
both Amazon and
Apple have achieved success in attracting customers and maintaining market
leadership through personalized approaches and innovations. Both companies
deeply analyze customer needs and strengthen trust in their brands by offering
tailored services and products.
Amazon’s
personalization strategy, such as the personalized
recommendation system, purchase history-based reminders, and product
reviews, aims to increase customer loyalty, expand sales volume, and develop
the company's global ecosystem. Amazon’s personalized experiences simplify
and streamline the shopping process by providing customers with services that
suit their needs. This enables the company to establish long-term, beneficial
relationships with customers and ensures its competitiveness in the market.
However, Amazon’s net loss in 2022 shows that personalization does not always
lead to direct revenue growth. Nevertheless, Amazon succeeded in maintaining
its market share by expanding its global scale.
Apple’s
differentiation strategy is a key factor that sets it apart from
competitors. Apple attracts customers with its unique design, innovative
products, and high-quality services. By combining the high quality of its
products, modern design, and technological innovations, Apple offers customers
a premium experience. To maintain the exclusivity of its brand, Apple keeps
product prices high, avoids discounts and promotions, and increases customer
loyalty through integration across all elements of the Apple ecosystem.
Technological innovations such as Face ID, the App Store, and touchscreens
provide a more personalized approach to customers compared to competitors,
helping the company maintain a strong position in the market.
Thus, Amazon and Apple have succeeded in maintaining market
leadership and competitiveness through their personalization and
differentiation strategies. While Amazon increases loyalty by offering tailored
experiences through personalization, Apple creates a premium experience for
customers with its innovative products and high-quality services. Both
companies succeed in meeting customer needs, expanding market share, and
strengthening brand trust. These strategies ensure not only economic efficiency
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but also success as a system that includes technological innovations and the
establishment of long-term, trustworthy relationships with customers.
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