1. Customer- Driven Marketing Strategy Chapter: 7 Lec: 6b

2. Segmenting Business Markets Many of the same variables as Consumer Market Operating characteristics, purchasing approaches, situational factors, personal characteristics Right value proposition can be delivered by dealing with the right segment instead of whole market e.g. HSBC

3. Segmenting Business Markets

4. Segmenting International Markets Coca-Cola, Sony operate in more than 200 countries Geographic : Mexico different from US and Canada Economic Political Intermarket Segmentation Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries

5. Intermarket Segmentation Lexus- Global Elite IKEA- the inspiring middle class Coca-Cola- teens (core consumers) – deals with music, sponsor of American Idol

6. Segmenting International Markets

7. Requirements for effective Segmentation Not all market segmentations are effective Measurable: size, purchasing power, and profiles should be measurable e.g. left Handed people Accessible: they should be within reach e.g. target single men, women for a specific perfume- where can they be found Substantial: profitable enough to serve e.g. cars specially made for people of more then 7ft height

8. Requirements for effective Segmentation Differentiable: The segments are distinguishable e.g. married and un-married women might response to a discount on a cream in the same manner e.g. Salt n Pepper (Grill, Village,) Actionable: Effective and attractive programs

9. Market Targeting Evaluating Market Segments - Segment size - Growth - Structural Attractiveness All the large, growing segments are not good for every company A lot of competitors is risky- price controls etc.

10. Selecting Target Market Segments Undifferentiated (Mass) Marketing Differentiated (segmented) Marketing Concentrated (niche) Marketing Micromarketing (local or individual marketing) Marketing

11. Selecting Target Market Segments Target Market A set of buyers sharing common needs or characteristics that the company decides to serve Undifferentiated Marketing A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one another - face problems, because specifically segments are not targeted

12. Selecting Target Market Segments Differentiated Marketing A market coverage strategy in which a firm decides to target several market segments and design separate offers for each e.g. P&G- Tide, Ariel Head & Shoulders, Panteen - Differentiated marketing would require extra costs

13. Tide/ Ariel

14. Head & Shoulders/ Panteen

15. Selecting Target Market Segments Concentrated Marketing (Niche Marketing) A market coverage strategy in which a firm goes after one or a few segments or niches Effectively- Efficiently- e.g. Nirma detergent e.g. Zappos shoes

16. Nirma Washing Powder

17. Selecting Target Market Segments Micromarketing The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups- includes local marketing and individual marketing Drive up marketing and manufacturing costs by reducing economies of scale e.g. Starbucks GPS system

18. Starbucks GPS System

19. Selecting Target Market Segments Individual Marketing Tailoring products and marketing programs to the needs and preferences of individual customers- also labeled “one to one marketing” “customized marketing” “markets of one marketing” e.g. Nike- chose from various colors for your sneakers e.g. have a personal message or your picture on m&m - relationships are made

20. Selecting Target Market Segments Choosing a Targeting Strategy - Company resources - Product Variability: Uniform or different - The Product’s Life cycle stage: - Market Variability: same tastes and style - Competitors marketing strategies: