CUSTOMER-DRIVEN MARKETING STRATEGY: CREATING VALUE FOR TARGET CUSTOMERS Chapter Seven Copyright ©2014 by Pearson Education, Inc. All rights reserved

7- 2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Reflection 2 SO head back into your groups Take 5 minutes to reflect on what you would have done differently. Given what you know now:  Redo your intro  Redo your summary Answer this one – What is most valuable in a business buying situation?

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Customer-Driven Marketing Strategy: Creating Value for Target Customers Market Segmentation Market Targeting Differentiation and Positioning Topic Outline Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Market segmentation Dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes. Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation In this section we will talk about: Segmenting consumer markets Segmenting business markets Segmenting international markets Requirements for effective segmentation Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation 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 Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation 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 Gender segmentation divides the market based on sex (male or female) Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Income segmentation divides the market into affluent, middle-income or low-income consumers Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product Occasions Benefits sought User status Usage rate Loyalty status Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation /index.aspx /index.aspx tch?v=0gjsoSY18kg tch?v=0gjsoSY18kg Segmenting Consumer Markets Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation Multiple segmentation is used to identify smaller, better-defined target groups Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Segmentation To be useful, market segments must be: Requirements for Effective Segmentation MeasurableAccessible SubstantialDifferentiable Actionable Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve Selecting Target Market Segments Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Undifferentiated marketing targets the whole market with one offer  Mass marketing  Focuses on common needs rather than what’s different Target Marketing Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Differentiated marketing targets several different market segments and designs separate offers for each Goal is to achieve higher sales and stronger position More expensive than undifferentiated marketing Target Marketing Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Concentrated Marketing When using a concentrated marketing (or niche marketing) strategy, instead of going after a small share of a large market, a firm goes after a large share of one or a few smaller segments or niches Target Market Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups Cities Neighborhoods Stores Target Market Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers Also known as:  One-to-one marketing  Mass customization Target Market Strategies Copyright ©2014 by Pearson Education, Inc. All rights reserved

Market Targeting Depends on: Company resources Product variability Product life-cycle stage Market variability Competitor’s marketing strategies Choosing a Target Market Copyright ©2014 by Pearson Education, Inc. All rights reserved

Insurance Watch the following:  Audience  Demographics  Psychographics

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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 Perceptions  Impressions  Feelings Copyright ©2014 by Pearson Education, Inc. All rights reserved

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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 Perceptions  Impressions  Feelings Copyright ©2014 by Pearson Education, Inc. All rights reserved

Differentiation and Positioning Identifying a set of possible competitive advantages to build a position Choosing the right competitive advantages Selecting an overall positioning strategy Communicating and delivering the chosen position to the market Choosing a Differentiation and Positioning Strategy Copyright ©2014 by Pearson Education, Inc. All rights reserved

Differentiation and Positioning 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 Identifying Possible Value Differences and Competitive Advantages Copyright ©2014 by Pearson Education, Inc. All rights reserved

Differentiation and Positioning Identifying a set of possible competitive advantages to build a position by providing superior value from: Choosing a Differentiation and Positioning Strategy Product differentiationService differentiationChannel differentiationPeople differentiationImage differentiation Copyright ©2014 by Pearson Education, Inc. All rights reserved

Differentiation and Positioning Value proposition is the full mix of benefits upon which a brand is positioned Selecting an Overall Positioning Strategy Copyright ©2014 by Pearson Education, Inc. All rights reserved

Show me! Value proposition is the full mix of benefits upon which a brand is positioned Copyright ©2014 by Pearson Education, Inc. All rights reserved