Chapter 7- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Seven Customer-Driven Marketing Strategy Creating Value for Target Customers

Chapter 7- slide 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Customer-Driven Marketing Strategy: Creating Value for Target Customers Customer-Driven Marketing Strategy Market Segmentation Market Targeting Differentiation and Positioning Topic Outline

Chapter 7- slide 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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 Market Segmentation

Chapter 7- slide 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1.Segmenting consumer markets 2.Segmenting business markets 3.Segmenting international markets 4.Requirements for effective segmentation Market Segmentation

Chapter 7- slide 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation 1. Segmenting Consumer Markets

Chapter 7- slide 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities Segmenting Consumer Markets

Chapter 7- slide 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Demographic segmentation Examples 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) Income segmentation divides the market into affluent or low-income consumers

Chapter 7- slide 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits Market Segmentation Segmenting Consumer Markets

Chapter 7- slide 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Multiple segmentation is used to identify smaller, better-defined target groups Using Multiple Segmentation Bases

Chapter 7- slide 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Geographic location Economic factors Political- legal factors Cultural factors 2. Segmenting International markets

Chapter 7- slide 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries 3. Segmenting Business Markets

Chapter 7- slide 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Segmentation To be useful, market segments must be: 4. Requirements for Effective Segmentation MeasurableSubstantial DifferentiableActionable

Chapter 7- slide 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Targeting Segment size and growth Segment structural attractiveness Company objectives and resources Evaluating Market Segments.

Chapter 7- slide 17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Targeting Concentrated marketing targets a small share of a large market Limited company resources Knowledge of the market More effective and efficient Target Market Strategies

Chapter 7- slide 20 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Marketing Targeting Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations Local marketing Individual marketing Target Market Strategies

Chapter 7- slide 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Targeting Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups Cities Neighborhoods Stores Target Market Strategies

Chapter 7- slide 22 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 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

Chapter 7- slide 23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Targeting Depends on: Company resources Product variability Product life-cycle stage Market variability Competitor’s marketing strategies Choosing a Targeting Strategy

Chapter 7- slide 24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Market Targeting Benefits customers with specific needs Concern for vulnerable segments Children –Alcohol –Cigarettes –Internet abuses Socially Responsible Target Marketing

Chapter 7- slide 25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Positioning Positioning:  The place the product occupies in consumers’ minds relative to competing products.  Typically defined by consumers on the basis of important attributes.

Chapter 7- slide 26 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Positioning Choosing a Positioning Strategy:  Identifying possible competitive advantages -- many potential sources of differentiation exist:  Products  Services  Channels  People 

Chapter 7- slide 27 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Positioning Choosing a Positioning Strategy:  Choosing the right competitive advantage  How many differences to promote? –Unique selling proposition –Which differences to promote?

Chapter 7- slide 28 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Positioning Criteria for Meaningful Differences Important SuperiorDistinctiveCommunicableAffordable Profitable

Chapter 7- slide 29 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Positioning Choosing a Positioning Strategy:  Communicating and delivering the chosen position  Entire marketing mix must support the chosen strategy  May require changes to the product, pricing, distribution or promotion.

Chapter 7- slide 30 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Differentiation and Positioning To (target segment and need) our (brand) is (concept) that (point of difference) d. Developing a Positioning Statement

Chapter 7- slide 31 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection. Example

Chapter 7- slide 32 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Choosing the positioning is often easier than implementing the position. Communication and Delivering the Chosen Position