POM Lec 5

8/13/2019 POM Lec 5

1/26

Customer-Driven MarketingStrategy:

Creating Value for Target Customers

8/13/2019 POM Lec 5

2/26

Designing a Customer-DrivenMarketing Strategy

Designing a true customer-driven

marketing strategy involves:

Segmentation Targeting

Differentiation

Positioning

8/13/2019 POM Lec 5

3/26

Market Segmentation

Segmentation: Dividing a market into smaller groups with distinct needs,

characteristics, or behaviors that might require separatemarketing strategies or mixes.

Key variables: Geographic

Demographic

Psychographic

Behavioral No single way to segment is best. Often combine

more than one variable to better define segments.

8/13/2019 POM Lec 5

4/26

Market Segmentation

Geographic:

World region or country

Region of country City or metro size

Density

Climate

8/13/2019 POM Lec 5

5/26

Market Segmentation

Demographic:

Age, gender, family size, family life cycle,

income, occupation, education, race, religion,

generation, nationality.

The most popular bases for segmenting

customer groups.

Easier to measure than most other types ofvariables.

8/13/2019 POM Lec 5

6/26

Market Segmentation

Age and life-cycle stage addresses the fact

that consumer needs and wants change

with age: P&G has different toothpastes for different age

groups.

Avoid stereotypes in promotions.

Promote positive messages.

8/13/2019 POM Lec 5

7/26

Market Segmentation

Gender:

Neglected gender segments can offer new opportunities

(e.g., Nivea for men).

Income: Identifies and targets the affluent for luxury goods.

People with low annual incomes can be a lucrative

market.

Some manufacturers have different grades of products fordifferent markets.

8/13/2019 POM Lec 5

8/26

Market Segmentation

Psychographic

segmentation:

Dividing a marketinto different groups

based on social

class, lifestyle, or

personalitycharacteristics.

Behavioral

segmentation:

Dividing buyers intogroups based on

consumer

knowledge,

attitudes, uses, orresponses to a

product.

8/13/2019 POM Lec 5

9/26

Market Segmentation

Behavioral segmentation:

Occasion segmentation:

Special promotions and labels for holidays.

(E.g., Eid Shopping)

Special products for special occasions.

(E.g., Kodak disposable cameras)

Benefits sought:

Different segments desire different benefits from products. (E.g., P&Gs multiple brands of laundry detergents to satisfy

different needs in the product category).

8/13/2019 POM Lec 5

10/26

Market Segmentation

Behavioral segmentation:

User status:

Nonusers, ex-users, potential users, first-timeusers, regular users

Usage rate:

Light, medium, heavy

Loyalty status: Brands, stores, companies

8/13/2019 POM Lec 5

11/26

Market Segmentation

Best to use multiple segmentation bases in

order to identify smaller, better-defined

target groups. Start with a single base and then expand to other

bases.

8/13/2019 POM Lec 5

12/26

Segmenting Business Markets

Consumer and business markets use many

of the same variables for segmentation.

Business marketers can also use: Operating characteristics

Purchasing approaches

Situational factors

Personal characteristics

8/13/2019 POM Lec 5

13/26

Segmenting International Markets

Factors used: Geographic location

Economic factors

Political and legal factors

Cultural factors

Intermarket segmentation:

Forming segments of consumers who havesimilar needs and buying behavior even thoughthey are located in different countries.

8/13/2019 POM Lec 5

14/26

Requirements for Effective Segmentation

To be useful, market segments must be: Measurable (size, purchasing power and profiles of

the segment can be measured)

Accessible (The segment can be effectively reached

& served)

Substantial (The market segments are larger orprofitable enough to serve)

Differentiable(The segments respond differently to

marketing mix programs)

Actionable (Effective programs can be designed forattracting & serving the segments)

8/13/2019 POM Lec 5

15/26

Evaluating Market Segments

Segment size and growth: Analyze current segment sales, growth rates, and

expected profitability.

Segment structural attractiveness: Consider competition, existence of substitute products,

and the power of buyers and suppliers.

Company objectives and resources: Examine company skills and resources needed to

succeed in that segment.

Offer superior value and gain advantages overcompetitors.

8/13/2019 POM Lec 5

16/26

Market Targeting

Market targeting involves:

Evaluating marketing segments.

Segment size, segment structural attractiveness,and company objectives

and resources are considered.

Selecting target market segments.Alternatives range from undifferentiated marketing

to micromarketing.

8/13/2019 POM Lec 5

17/26

Selecting Target Market Segments

Targeting strategies include: Undifferentiated (mass) marketing:

Ignores segmentation opportunities

Differentiated (segmented) marketing:

Targets several segments and designs separateoffers for each

Concentrated (niche) marketing:

Targets one or a couple small segments

Micromarketing (local or individual marketing)

8/13/2019 POM Lec 5

18/26

Micromarketing

Tailoring products and marketing programsto suit the tastes of specific individuals andlocations. Local marketing:Tailoring brands and

promotions to the needs and wants of localcustomer groupscities, neighborhoods, specificstores.

Individual marketing:Tailoring products andmarketing programs to the needs andpreferences of individual customers.

8/13/2019 POM Lec 5

19/26

Differentiation and Positioning

A products position is:

The way the product is defined by consumers on

important attributesthe place the product

occupies in consumers minds relative to

competing products.

Perceptual positioning maps can help define a

brands position relative to competitors.

8/13/2019 POM Lec 5

20/26


Choosing a differentiation and positioning

strategy involves:

Identifying a set of possible value differencesand competitive advantages on which to build a

position.

Choosing the right competitive advantages.

Selecting an overall positioning strategy.

8/13/2019 POM Lec 5

21/26


Identifying possible value differences andcompetitive advantages: Key to winning target customers is to understand

their needs better than competitors do and todeliver more value.

Competitive advantage: Extent to which a company can position itself as

providing superior value.

Achieved via differentiation.

8/13/2019 POM Lec 5

22/26


Differentiation Actually differentiating the marketing offering to

create superior customer value.

Types of differentiation: Product differentiation

Services differentiation

Channels differentiation People differentiation

Image differentiation

8/13/2019 POM Lec 5

23/26


Choosing the right competitive advantagerequires selecting how manyand whichdifferences to promote.

Differences that could be promoted are: Important Distinctive

Superior

Communicable

Preemptive Affordable

Profitable

8/13/2019 POM Lec 5

24/26


Overall or full positioning of the brand is called the

brands value proposition.

Potential value propositions include:

More for more:More benefits for higher price.

More for same:More benefits for the same price.

More for less:More benefits for a lower price.

Same for less:Same benefits for a lower price.

Less for much less:Fewer benefits for much lower price.

8/13/2019 POM Lec 5

25/26


Developing a positioning statement: Format: To (target segment and need)

our (brand) is (a concept) that (point of

difference). Example:To busy mobile professionals who

need to always be in the loop, BlackBerry is awireless connectivity solution that gives you aneasier, more reliable way to stay connected todata, people, and resources while on the go.

8/13/2019 POM Lec 5

26/26

Communicating and Delivering theChosen Position

Company must take strong steps to deliverand communicate the desired position totarget consumers. The marketing mix efforts must support the

positioning strategy.

Firm must also monitor and adapt theposition over time to match changes in

consumer needs and competitorsstrategies.

POM Lec 5

Documents

Transcript of POM Lec 5