designing a customer-driven marketing strategy and target marketing
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Designing a Customer-Driven Marketing Strategy and Target Marketing. Mrs. Saira Sajad. Major Steps in Target Marketing. Market Segmentation Target Marketing Market Positioning. Market Segmentation. - PowerPoint PPT PresentationTRANSCRIPT
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MRS. SAIRA SAJAD
Designing a Customer-Driven Marketing
Strategy and Target Marketing
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Major Steps in Target Marketing
Market Segmentation
Target Marketing
Market Positioning
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Market Segmentation
Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mix.
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Target Marketing
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
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Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers
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What is Market Segmentation?
Segmentation
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What is Market Segmentation?
Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mix.
Market Segmentation is breaking down heterogeneous mass market into more homogeneous submarkets.
Marketer’s assume that consumers within segments should respond similarly to particular marketing actions.
Consumer response should be different between different segments.
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Why segment the market?
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Why segment the market?
Customers have diverse needs, wants and buying behaviors which differ from other customers.
One firm cannot satisfy everyone’s needs.
Organizations have different strengths and competitive advantages in different areas.
Marketer’s should focus on what they do best.
It can create better marketing opportunities for organizations
It may be more profitable for organizations.
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Types of Market Segmentation
Consumer Market SegmentationBusiness Market SegmentationInternational Market Segmentation
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Consumer Market Segmentation
There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination to find the best way to view the market structure.
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Consumer Market Segmentation Variables
Consumer market can be segmented through the following variables;
Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation
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Geographical Segmentation
Dividing a market into different geographical units such as nation, province, regions, countries, cities and climate etc.
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Geographic Segmentation VariablesGeographic Segmentation Variables
Continents or World Regions-Africa, Asia, EuropeCountries-Afghanistan US, PakistanProvince- kabul, Jalalabad, HeratCity or Metro Size- under 5000 people, 5000-
19,999Climate- Tropical, Temperate, Cold.
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Demographic Segmentation
Dividing the market into groups based on demographic variables such as age, gender, etc.
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Demographic Segmentation Demographic Segmentation VariablesVariables
Age Gender Family size Family life cycle Income Occupation Education Religion Race Generation Nationality
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Demographic segmentation
Age- Under 6 years old, 6-12, 13-19, 20-29,30-39,40-49,50+
Gender- Dividing a market into different groups based on gender (male/female).For example- NIKE has recently capture the women sports shoes market.
Family life cycle- Single, Young married, Married with children
Income- Dividing a market into different income groups. (high, medium and low income groups)
For example Honda presenting Motor cycle for low income and car for high income groups.
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Demographic segmentation
Occupation- employed, unemployed, self employed.
Education- Grade school or less, high school, graduated from high school, post graduate from university, Doctorate.
Religion- Muslims, Christens, Jewish, Buddhist.
Family Size- 1-2 persons, 3-4 persons, more than 4 persons
Nationality- Afghani, Pakistani, French, British, Canadian, Japanese.
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Psychographic Segmentation
Dividing a market into different groups based on social class, lifestyle and personality characteristics etc.
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Psychographic Segmentation Psychographic Segmentation VariablesVariables
Social class- There are 3 major social classes i.e. Upper, Middle and lower class.
Lifestyle- It may be different on the basis of income, community, religion etc. Different customers adopt different lifestyles.
Personality- There may be different personalities of customers like Calm, Dynamic, Aggressive
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Behavioral Segmentation
Dividing a market into groups based on consumer use, knowledge, attitude or response to a product.
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Behavioral Segmentation VariablesBehavioral Segmentation Variables
Occasions Benefits Attitude Toward
the Product User Rates Loyalty Status Readiness Stage
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Behavioral segmentation
Occasion-When the buyers get the idea to buy. (occasional buyers)
Benefit- Dividing a market into groups according to the different benefits that consumers seek from the product.For example- free bag with a laptop. Or discount on software or free delivery.
User Loyalty status- A market can also be segmented by consumer loyalty. For Example-Consumer can be loyal to brand (Nokia), stores (Imperial Store) and companies (Toyota).
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Behavioral segmentation
Usage rate- Markets can also be segmented into light, medium and heavy usage of products.
Attitude Toward the Product-For some companies or products customers show favorable attitude and for some products, they show unfavorable attitudes.
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Business Market Segmentation
Business markets can be segmented on the basis of various consumer market variables and some other variables like operating variables, purchasing approaches etc.
For example: American Express focuses on convincing new merchants, building relationships with old customers, and offering benefits to corporate such as insurance plan, travel discounts etc.
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DemographicsDemographics
Operating VariablesOperating Variables
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
Personal CharacteristicsPersonal Characteristics
Business Marketers Use
Many of the Same Consumer Variables, Plus:
Bases for Segmenting Business Markets
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Bases for Segmenting Business Markets
Demographic segmentationBusiness markets can be segmented on the basis of Industry, company size and location etc.For Example; Textile, Sugar and FMCG (Fast Moving Consumer Goods) are different industries, so there raw material and machinery will be available in different business markets.
Operating variablesBusiness markets can be segmented on the basis of Technology, usage status and customer (business) capabilities.For Example; Computers, mobile phones and electronics are technology based products as compared to juices and furniture. So on the basis of technology, business market will be different.
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Cont…
Purchasing approaches
Business markets can be segmented on the basis of Regular purchases and occasional purchases.
For Example; Some type of raw materials are regularly purchased by different businesses like stationary, papers, paints etc but some raw materials like sugarcane, cotton will be purchased occasionally in the season.
Situational factorsBusiness markets can be segmented on the basis of Urgency,
specific application and size of order.For Example; Some businesses are very big businesses,
therefore their size of order for raw materials are also very big, so such markets may be segmented which are selling products in larger quantity only or in wholesale, not in retail.
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Cont…
Personal characteristicsBusiness markets can be segmented on the basis of
Buyer-seller similarity, attitudes toward risk, loyalty.For Example; If the buyer (Businessman of sugar mill)
makes a contract with seller (Farmer of sugarcane) that for next 10 years , he will provide a specific quantity of raw material to him on a specific price. So in this regard, the buyer (Business) reduces his risk and he created loyality.
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International Market Segmentation
“Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.”
Geographical SegmentationEconomic Factors SegmentationPolitical & Legal Factors SegmentationCultural Segmentation
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Factors Used to Segment
International Markets
Geographic Location
EconomicFactors
Political and Legal Factors
Cultural Factors
Bases for Segmenting International Markets
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Bases for Segmenting International Markets
Geographic segmentation For Example; World market can be segmented by geographic
location, grouping countries by region such as Western Europe, Middle East, South Asia etc.
Economic factorsWorld market can also be segmented on the basis of economic factors i.e. Population income or level of economic development.
For example-countries might be grouped by population income level or by their overall level of economic development.
Political and legal factorsWorld market can also be segmented by political and legal
factors, such as the type and stability of the Government, monetary regulations, amount of bureaucracy etc.
Cultural factorsWorld market can also be segmented by Language, religion,
values, attitudes, customs, behavioral patterns
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Target Marketing
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Target Marketing
Target market: A set of buyers sharing common needs or characteristics that the company decides to serve.
After successfully segmented the market the firm now must evaluate the various segments and decide how many and which segment it can serve best.
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Steps in the Target Marketing Process
• Evaluating Market Segments
• Selecting Target Market Segments
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Evaluating Market Segments
In evaluating different market segments, a firm must look at three factors:
Segment size and growth Analyze sales, growth rate and expected profitability.
Segment structural attractiveness Consider effects of Competitors, Availability of Substitute Products and the Power of Buyers & Suppliers. A segment is less attractive if it already contain strong and aggressive competitors or substitute products.
Company’s objectives and resourcesEven if a segment has the right size and growth and is structurally attractive, the company must consider its own capability, compatative advantage, objectives and resources.
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Selecting target market segments
After evaluating different segments, the company must decide which and how many segments it will target.
A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Buyers have unique needs and wants, a seller could potentially view each buyer as a separate target market. Then a seller might design a separate marketing program for each buyer.
Companies can target very broadly , very narrowly or some where in between.
There are four different types of strategies which the marketers apply while selecting target market segments.
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Target Marketing Strategies
Targeting broadly targeting narrowly
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Undifferentiated Marketing
A firm might decide to ignore market segments and target the whole market with one offer. This mass marketing focuses on what is common in the needs of consumers rather than on what is different.
For Example; Nestle offers mineral water for the entire market without any change for different customers attributes.
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CompanyMarketing Mix
CompanyMarketing Mix MarketMarket
A. Undifferentiated Marketing
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Differentiated Marketing
A firm decides to target several market segments and design separate offers for each.
For Example; Head & Shoulders design separate nature of shampoo for different types of customer needs.
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Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
B. Differentiated Marketing
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Concentrated (Niche marketing)
A third market coverage strategy is specially appealing when company resources are limited. Instead of going after a small share of a large market, the firm goes after a large share of one or few smaller segments.
For Example; Pepsi offers Diet Pepsi (Pepsi Max) for Diabetes patients and diet conscious people.
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Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
C. Concentrated Marketing
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Micromarketing (Local or Individual Marketing)
The practice of tailoring products and marketing program to the needs and wants of specific individuals.
Individual marketing has also labeled one to one marketing.
For example. Dell is doing individual marketing, by taking the order of every individual and prepare the computer accordingly for each customer.
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CompanyMarketing
Mix
CompanyMarketing
Mix
IndividualCustomerIndividualCustomer
D. Custom Marketing Strategy or Micromarketing Strategy
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Market Positioning
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Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers
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Positioning for Competitive Advantage
Product’s Positioning “The place the product occupies in
consumers’ minds relative to competing products”
i.e. Volvo positions on “safety”.
Marketers must:Plan positions to give products the greatest
advantageDevelop marketing mixes to create planned
positions
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Choosing and Implementing a Positioning Strategy
Step 1. Identifying a set of possible competitive advantages. i.e. Competitive Differentiation, which may be of product, service, personnel and image etc.
Step 2. Selecting the right competitive advantage suitable to your organizational objectives and capabilities.
Step 3. Effectively communicating and delivering the chosen position to the market by different effective promotional medias.
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ServicesDifferentiation
i.e. Delivery, Installation, Repair Services,
Customer Training Services
Product Differentiation
i.e. Features, Performance, Style & Design, or Attributes
ImageDifferentiationi.e. Symbols, Atmospheres,
Events
Personnel Differentiation
i.e. Hiring, Training Better People Than
Competitors Do
Identifying Possible Competitive Advantages
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Market Segmentation1. Identify bases for segmenting the market2. Develop attractive segments
Market Targeting3. Evaluating Market Segments4. Selecting Target Market Segments
Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment
Steps in Market Segmentation, Targeting, and Positioning
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