Transcript m5zn_f809877051e3699

Customer-Driven Marketing
Strategy:
Creating Value for Target
Customers
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Learning Objectives
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After studying this chapter, you should be able to:
Define the three steps of target marketing: Market
segmentation, target marketing, and market
positioning
List and discuss the major bases for segmenting
consumer and business markets
Explain how companies identify attractive consumer
and business markets
Discuss how companies position their products for
maximum competitive advantage in the marketplace
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Chapter Concepts:
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Market Segmentation
Market Targeting
Differentiation and
Positioning
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Market Segmentation
Market segmentation is the process that
companies use to divide large heterogeneous
markets into small markets that can be
reached more efficiently and effectively with
products and services that match their unique
needs
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Market Segmentation
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Market Segmentation
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Segmenting consumer markets
Segmenting business markets
Segmenting international markets
Requirements for effective segmentation
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Market Segmentation
Segmenting Consumer Markets
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Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
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Table 7.1
Major Segmentation Variables for
Consumer Markets
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Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market
into different geographical units such as
nations, regions, states, counties, or cities
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Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the
market into groups based on variables such
as age, gender, family size, family life cycle,
income, occupation, education, religion, race,
generation, and nationality
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Market Segmentation
Segmenting Consumer Markets
Demographic segmentation is the most
popular segmentation method because
consumer needs, wants, and usage often vary
closely with demographic variables and are
easier to measure than other types of variables
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Market Segmentation
Segmenting Consumer Markets
Age and life-cycle stage segmentation is the
process of offering different products or using
different marketing approaches for different
age and life-cycle groups
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Market Segmentation
Gender segmentation
divides the market
based on sex (male or
female)
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Market Segmentation
Segmenting Consumer Markets
Income segmentation divides the market
into affluent or low-income consumers
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Market Segmentation
Segmenting Consumer Markets
Psychographic segmentation
divides buyers into different
groups based on social
class, lifestyle, or
personality traits
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Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers into
groups based on their knowledge, attitudes,
uses, or responses to a product
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Occasions
Benefits sought
User status
Usage rate
Loyalty status
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Market Segmentation
Segmenting Consumer Markets
Occasion segmentation divides buyers into groups
according to occasions when they get the idea to
buy, actually make purchases, or respond to a
product (Postcard makers use this type)
Benefit segmentation requires finding the major
benefits people look for in the product class, the
kinds of people who look for each benefit, and the
major brands that deliver each benefit
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Market Segmentation
Segmenting Consumer Markets
User status divides buyers into ex-users, potential
users, first-time users, and regular users of a
product
Usage rate divides buyers into light, medium, and
heavy product users
Loyalty status divides buyers into groups according
to their degree of loyalty
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Market Segmentation
Segmenting Consumer Markets
Loyalty status
divides buyers
into groups
according to their
degree of loyalty
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Market Segmentation
Using Multiple Segmentation Bases
Multiple segmentation is used to identify
smaller, better-defined target groups
Geodemographic segmentation is an
example of multivariable segmentation that
divides groups into consumer lifestyle
patterns
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Market Segmentation
Using Multiple Segmentation Bases
PRIZM NE classifies every American
household into 66 unique segments
organized into 14 different social groups.
These groups segment people and locations
into marketable groups of like-minded
consumers that exhibit unique
characteristics and buying behavior based
on a host of demographic factors.
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Market Segmentation
Using Multiple Segmentation Bases
PRIZM classifications include:
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Age
Educational level
Income
Occupation
Family composition
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Ethnicity
Housing
Behavioral and
lifestyle factors
Purchases
Free time activities
Media preferences
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Market Segmentation
Segmenting Business Markets
In addition to the same segmentation variables
as consumers, business can also be
segmented by:
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Customer-operating characteristics
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Purchasing approaches
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Situational factors
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Personal characteristics
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Market Segmentation
Segmenting Business Markets
Segmenting international markets
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Geographic location
Economic factors
Political-legal factors
Cultural factors
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Market Segmentation
Segmenting Business Markets
Intermarket segmentation
divides consumers into
groups with similar needs
and buying behaviors even
though they are located in
different countries
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Market Segmentation
Requirements for Effective Segmentation
To be useful, market segments must be:
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Measurable
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Accessible
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Substantial
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Differentiable
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Actionable
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Market Segmentation
Requirements for Effective Segmentation
Measurable examples include the size,
purchasing power, and profiles of the
segments
Accessible refers to the fact that the market can
be effectively reached and served
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Market Segmentation
Requirements for Effective Segmentation
Substantial refers to the fact that the markets
are large and profitable enough to serve
Differentiable refers to the fact that the
markets are conceptually distinguishable and
respond differently to marketing mix
elements and programs
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Market Segmentation
Requirements for Effective Segmentation
Actionable refers to the fact that effective
programs can be designed for attracting and
serving the segments
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Market Targeting
Evaluating Market Segments
Target market consists of a set of buyers who
share common needs or characteristics that
the company decides to serve
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Segment size and growth
Segment structural attractiveness
Company objectives and resources
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Market Targeting
Evaluating Market Segments
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Segment size and growth
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Smaller versus larger segments
Growth potential
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Market Targeting
Evaluating Market Segments
Segment structural attractiveness
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Competition
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Substitute products
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Power of buyers
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Power of suppliers
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Market Targeting
Evaluating Market Segments
Company objectives and resources
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Competitive advantage
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Availability of resources
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Consistent with company objectives
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Market Targeting
Target Marketing Strategies
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Undifferentiated marketing
Differentiated marketing
Concentrated marketing
Micromarketing
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Market Targeting
Target Marketing Strategies
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Market Targeting
Target Marketing Strategies
Undifferentiated marketing targets the whole
market with one offer
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Mass marketing
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Focuses on common needs rather than
what’s different
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Market Targeting
Target Marketing Strategies
Differentiated marketing targets several
different market segments and designs
separate offers for each
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Goal is to achieve higher sales and stronger
position
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More expensive than undifferentiated
marketing
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Market Targeting
Target Marketing Strategies
Differentiated Marketing Strategies
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Market Targeting
Target Market Strategies
Concentrated marketing targets a small share
of a large market
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Limited company resources
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Knowledge of the market
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More effective and efficient
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Marketing Targeting
Target Market Strategies
Concentrated marketing targets a small share
of a large market
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Limited company resources
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Knowledge of the market
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More effective and efficient
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Marketing Targeting
Target Market Strategies
Micromarketing is the practice of tailoring
products and marketing programs to suit the
tastes of specific individuals and locations
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Local marketing
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Individual marketing
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Market Targeting
Target Market Strategies
Local marketing involves tailoring brands and
promotion to the needs and wants of local
customer groups
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Cities
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Neighborhoods
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Stores
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Marketing Targeting
Target Market Strategies
Local marketing
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Benefits:
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Increased marketing effectiveness in competitive
markets
More customer-specific offerings
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Target Marketing
Target Market Strategies
Local marketing
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Challenges:
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Increased manufacturing and marketing costs
Less economy of scale
Logistics
Dilution of company image
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Market Targeting
Target Market Strategies
Individual marketing
involves tailoring
products and marketing
programs to the needs
and preferences of
individual customers
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Also known as:
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One-to-one marketing
Mass customization
Markets-of-one marketing
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Market Targeting
Target Market Strategies
Mass customization is the process through which firms
interact one-to-one with masses of customers to
design products and services tailor-made to meet
individual needs. Has made relationships with
customers important in the new economy.
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Provides a way to distinguish the company against
competitors (For example, big tailoring companies).
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Market Targeting
Choosing a Target Market
Depends on:
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Company resources
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Product variability
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Product life-cycle stage
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Market variability
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Competitor’s marketing strategies (P. 201)
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Market Targeting
Socially Responsible Target Marketing
Benefits customers with specific needs
Concern for vulnerable segments
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Children
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Alcohol
Cigarettes
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Real Marketing: Procter and Gamble
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P&G is one of the world’s premier consumergoods companies.
99% of all U.S. households use at least one of
P&G’s 300 brands.
P&G sells 6 brands laundary detergent, 6
brands of bath soap, 7 brands of shampoo, 4
brands of dishwashing detergent and many
different brands in the U.S.A only.
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Real Marketing: Procter and Gamble
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Internationally, P&G has many additional
brands. For example, it sells 16 different
laundary powder brands in Latin America
and 19 in Europe, the Middle East and
Africa.
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Real Marketing: Procter and Gamble
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The question is why does P&G produce
more than one brand in the same
product category? Why doesn’t it focus
on one leading brand per category?
The simple answer is that different
people want different mixes of benefits
from the products they buy.
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Real Marketing: Procter and Gamble
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For example, at the laundary detergent sector,
some customers may be highly interested in
one characteristic such as fresh smell, while
others may be interested in a different feature
such as bleaching and cleaning power.
Thus, different groups (segments) of
customers may seek different mixes of benefits
from laundary detergents.
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Real Marketing: Procter and Gamble
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Based on the different needs of
customers, P&G segmented laundry
detergent market into 6 segments.
(Please read P. 199.), and developed 6
different brands that suits the different
needs of every segment.
Furthermore, P&G identified narrower
subsegments (niches). P. 199
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Real Marketing: Procter and Gamble
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By segmenting the market and having
several detergent brands, P&G has an
attractive offering for consumers in all
important prederence groups.
All P&G brands catpure for 60% of
market share.
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Differentiation and Positioning
Product position is the way the product is
defined by consumers on important
attributes—the place the product occupies in
consumers’ minds relative to competing
products
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Perceptions
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Impressions
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Feelings
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Differentiation and Positioning
Positioning maps show consumer perceptions
of their brands versus competing products on
important buying dimensions
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Price and orientation
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Differentiation and Positioning
Positioning Maps
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
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Identifying a set of possible competitive
advantages to build a position
Choosing the right competitive advantages
Selecting an overall positioning strategy
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Differentiation and Positioning
Identifying Possible Value Differences and
Competitive Advantage
Competitive advantage is an advantage over
competitors gained by offering consumers
greater value, either through lower prices or by
providing more benefits that justify higher
prices
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible competitive advantages to
build a position by providing superior value from:
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Product differentiation
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Service differentiation
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Channel differentiation
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People differentiation
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Image differentiation
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Differentiation and Positioning
Value Propositions
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Differentiation and Positioning
Choosing the Right Competitive Advantage
What differences to promote that are:
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Important
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Distinctive
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Superior
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Communicable
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Preemptive
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Affordable
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Profitable
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Differentiation and Positioning
Selecting an Overall Positioning Strategy
Value proposition is the full mix of benefits upon which
a brand is positioned
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More for more
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More for the same
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Same for less
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Less for much less
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More for less
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Differentiation and Positioning
Selecting an Overall Strategy
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Differentiation and Positioning
Developing a Positioning Statement
Positioning statement states the product’s
membership in a category and then shows its pointof-difference from other members of the category.
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Discussion Questions
It’s the time of the great
coffee wars:
Dunkin versus Starbucks.
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Discuss the target market
for each company’s coffee.
Are these just consumer
markets, or is there a
business market for them
as well?
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Review Questions
1.
2.
3.
4.
Define the steps of target marketing: Market
segmentation, target marketing, and market
positioning
List and discuss the major bases for segmenting
consumer and business markets
Explain how companies identify attractive
market segments and choose a target marketing
strategy
Discuss how companies position their products
for maximum competitive advantage in the
marketplace
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PowerPoint created by:
Ronald Heimler
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Dowling College, MBA
Georgetown University, BS Business
Administration
Adjunct Professor, LIM College, NY
Adjunct Professor, Long Island University,
NY
Lecturer, California Polytechnic State
University, Pomona, CA
President, Walter Heimler, Inc.
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