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Chapter 7: Customer-Driven Marketing Strategy

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Josh Johnstone

on 11 December 2014

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Transcript of Chapter 7: Customer-Driven Marketing Strategy

Customer-Driven Marketing Strategy
Chapter 7
most companies have moved away from mass marketing and toward target marketing: identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. Instead of scattering their marketing efforts (the “shotgun” approach), firms are focusing on the buyers who have greater interest in the values they create best (the “rifle” approach).
Market Segmentation
Market Targeting
Differentiation and Positioning

Market Segmentation: Consumer Markets
Market Segmentation
Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities
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
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, middle-income or low-income consumers
Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits
Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries
Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve
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
Market Segmentation
Market segmentation
Dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.
Potential Market Segments
Consumer markets
Business markets
International markets
Requirements for effective segmentation
Market Segmentation: Consumer Markets
Market Segmentation
Market Segmentation: Consumer Markets
Market Segmentation: Consumer Markets
Market Segmentation: Consumer Markets
Developing Marketing Information
Market Segmentation: Consumer Markets
Measurable: The size, purchasing power, and profiles of the segments can be measured.
Accessible: The market segments can be effectively reached and served.
Substantial: The market segments are large or profitable enough to serve.
Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
Actionable: Effective programs can be designed for attracting and serving the segments.
Market Targeting
Differentiation and Positioning
Market Segmentation: Consumer Markets
Multiple segmentation is used to identify smaller, better-defined target groups
PRIZM classifies every American household into 66 unique segments organized into 14 different social groups: “Kids & Cul-de-Sacs,” “Gray Power,” “Mayberry-ville,” “Shotguns & Pickups,” “Old Glories,” “Multi-Culti Mosaic,” “Big City Blues,” and “Brite Lites L’il City.”
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
Market Segmentation: International Markets
Market Segmentation: International Markets
Market Segmentation: Requirements for Effectiveness
Selecting Target Market Segments

Segment size and growth
Segment structural attractiveness
Company objectives and resources

Market Targeting
Evaluating Market Segments

Undifferentiated marketing targets the whole market with one offer
Mass marketing
Focuses on common needs rather than what’s different


Market Targeting
Target Marketing Strategies

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

Market Targeting
Target Marketing Strategies

Concentrated "Niche" marketing targets a small share of a large market
Limited company resources
Knowledge of the market
More effective and efficient
Market Targeting
Target Marketing Strategies

Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
Local marketing
Individual marketing
Market Targeting
Target Marketing Strategies
Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups: Cities / Neighborhoods / Stores
Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers AKA: One-to-one marketing / Mass customization
Market Targeting
Target Marketing Strategies
Depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Competitor’s marketing strategies



Market Targeting
Choosing a Target

Benefits customers with specific needs
Concern for vulnerable segments
Children
Alcohol
Cigarettes
Internet abuses


Market Targeting
Socially Responsible Target Marketing


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
Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy

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


Differentiation and Positioning
Identifying Possible Value Differences and Competitive Advantages

Identifying a set of possible competitive advantages to build a position by providing superior value from:

Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy

Difference to promote should be:
Important
: The difference delivers a highly valued benefit to target buyers.
Distinctive
: Competitors do not offer the difference, or the company can offer it in a more distinctive way.
Superior
: The difference is superior to other ways that customers might obtain the same benefit.
Communicable
: The difference is communicable and visible to buyers.
Preemptive
: Competitors cannot easily copy the difference.
Affordable
: Buyers can afford to pay for the difference.
Profitable
: The company can introduce the difference profitably
Differentiation and Positioning
The Right Competitive Advantage
Example: “To busy multitaskers who need help remembering things, Evernote is digital content management application that makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet, and the Web.”
Differentiation and Positioning
Developing a Positioning Statement: "To (target segment and need) our (brand) is (concept) that (point of difference)"
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