principles of marketing ch 7

7/23/2019 Principles of Marketing Ch 7

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P r i n c i p l e s o f M a r k e t i n g

Dr. Karim


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Chapter 7: Customer-Driven Marketing Strategy

- Creating alue for !arget Customers


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Introduction

This chapter looks further into key customer-

"rivenmarketing strategy decisions: dividing

up markets into meaningful customer groups

(segmentation), choosing which customer

groups to serve (targeting), creating market

oferings that best serve targeted customers(diferentiation), and positioning the oferings

in the minds of consumers (positioning).


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# #Positioning $ S!P: !he %ssence of

Strategic Marketing


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Market segmentation is the process

that companies use to divide large

heterogeneous markets into small

markets that can be reached more

eciently and eectively with

products and services that match

their unique needs.

arket !egmentation


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!egmenting "onsumer arkets

!egmenting International arkets

!egmenting #usiness arkets

$equirements for %ective !egmentation

Market Segmentation


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Market Segmentation

&eographicsegmentati

on

Demographic

segmentation

Psychographicsegmentatio

n

'ehavioralsegmentati

on

Segmenting Consumer Markets


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Market Segmentation

&eographic segmentation divides the

market into dierent geographical unitssuch as nations& regions& states& counties&

or cities.



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Market Segmentation

Demographic segmentation divides the

market into groups based on variables such as

age& gender& family si'e& family life cycle&

income& occupation& education& religion& race&

generation& and nationality.



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M ar ke t S e g m e n t a t i o n

- (ge an" life-cycle stage segmentation is

the process of oering dierent products or

using dierent marketing approaches fordierent age and lifecycle groups.

- &en"er segmentation divides the market

based on se) (male or female*.

- )ncome segmentation divides the market into

a+uent or lowincome consumers.



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Market Segmentation

Psychographic

segmentation divides

buyers into dierent

groups based on social

class& lifestyle& or

personality traits.



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Market Segmentation

'ehavioral segmentation

divides buyers into groups based on their knowledge&

attitudes& uses& or responses to a product

,ccasions

#ene-ts sought

ser status

sage rate

/oyalty status



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arket !egmenta t ion

Multiple segmentation is used to identifysmaller& betterde-ned target groups.

sing ultiple !egmentation #ases


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Market Segmentation

P*)+M ,% classi-es every0merican household into 11unique segments organi'edinto 23 dierent socialgroups.

These groups segmentpeople and locations into

marketable groups of likeminded consumers thate)hibit uniquecharacteristics and buying

behavior based on amultitude of demo ra hic

sing Multiple Segmentation 'ases


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k i


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arke t !egmenta t i on


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arket !egmenta t ion

- )ntermarket segmentation divides

consumers into groups with similar

needs and buying behaviors even

though they are located in dierentcountries.

!egmenting International arkets


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k t ! t t i


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arke t !egmenta t i on


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Market Segmentat ion

To be useful& market segments mustbe:

*euirements for %/ective Segmentation


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Market !argeting

Target market consists of a set of

buyers who share common needs or

characteristics that the company

decides to serve.

Selecting !arget Market Segments


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M k t ! t i


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Mar ket !ar get ing

!egment si'e and growth

!egment structural attractiveness

(!trong 4 5eak "ompetitors&

6igh4/ow Industry 7rowth $ate8*

"ompany ob9ectives and resources

%valuating Market Segments

.

M k t ! ti


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Market !argeting!arget Marketing Strategies

%)ample of a "oncentrated arketing


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%)ample of a "oncentrated arketing!trategy

%)ample of icro marketing (Individual


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%)ample of icromarketing (Individualarketing*


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Market !argeting

n"i/erentiate" marketing targets the

whole market with one o/er.

ass marketing

ocuses on common needs rather than

what;s dierent

!arget Marketing Strategies


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Market !argeting

Di/erentiate" marketing targets several

dierent market segments and designs

separate oers for each.

7oal is to achieve higher sales and

stronger position

ore e)pensive than undierentiated

!arget Marketing Strategies


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Market !argeting

Concentrate" marketing targets a small share

of a large market

/imited company resources


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Marketing !argeting

Micromarketing is the practice of

tailoring products and marketingprograms to suit the tastes of speci-c

individuals and locations

/ocal marketing

Individual marketing

!arget Market Strategies


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Market !argeting

0ocal marketing involves tailoringbrands and promotion to the needsand wants of local customergroups

"ities

=eighborhoods

!tores



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Market !argeting

)n"ivi"ual marketing involves tailoring

products and marketing programs to the

needs and preferences of individual customers

0lso known as: ,netoone marketing

ass customi'ation

arketsofone marketing


Market !argeting


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Market !argeting

>epends on:

"ompany resources

?roduct variability

?roduct lifecycle stage

arket variability

"ompetitor;s marketing strategies

Choosing a !arget Market


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Di/erentiation an" Positioning

Pro"uct position is the way the product is

de-ned by consumers on important

attributes@the place the product occupies inconsumers; minds relative to competing

products

?erceptions

Impressions

eelings


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Positioning maps show consumer

perceptions of their brands versuscompeting products on important

buying dimensions

d i i i


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?roducts ?ositioning ap

Di/ ti ti "


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Di/erentiation an"Positioning

Identifying a set of possible

competitive advantages to build aposition

"hoosing the right competitive

advantages !electing an overall positioning

strategy

>eveloping a positioning

Choosing a Di/erentiation an" Positioning Strategy

Di/ ti ti "


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Competitive a"vantage is an advantage

over competitors gained by oering

consumers greater value& either through

lower prices or by providing more

bene-ts that 9ustify higher prices.

)"entifying Possible alueDi/erences an" Competitive

("vantages

Di/ ti ti "


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Identifying a set of possiblecompetitive advantages to

build a position by providingsuperior value from:

Choosing a Di/erentiation an" Positioning Strategy

Di/ ti ti "


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>ierence to promote should be:

Choosing the *ight Competitive ("vantage

Di/ ti ti "


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alue

Proposition

is the full mi)

of bene-ts

upon which a

brand is

Selecting an 1verall Positioning Strategy


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0 ?ositioning !tatement is a written description of

the ob9ectives of a positioning strategy. It states:

(2* 6ow the -rm de-nes its business or how

a brand distinguishes itself.

(B* 6ow the customers will bene-t from its features.

(C* 6ow these bene-ts or aspects will becommunicated to the intended audience.

Developing a Positioning Statement

Examples o Positioning Statements Used by


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Examples o Positioning Statements Used byma!on

"#or $orld $ide $eb users who en%oybooks, ma!on.com is a retail bookseller

that pro&ides instant access to o&er '.'

million books. Unlike traditional book

retailers, ma!on.com pro&ides a

combination o extraordinary

con&enience, low prices, and

principles of marketing ch 7

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