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Customer Driven Marketing Strategy 6

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Mario Mata

on 9 September 2014

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Transcript of Customer Driven Marketing Strategy 6

Choosing the right competitive advantage requires selecting how many and which differences to promote.
Unique selling proposition is often preferred.
Promoting multiple differences is possible.
The challenge is to convince consumers that one brand can do it all.

Differentiation and Positioning

Identifying possible value differences and competitive advantages:
Key to winning target customers is to understand their needs better than competitors do and to deliver more value.
Finding points of differentiation requires that marketers examine the entire customer experience.

Differentiation and Positioning

The ultimate in individual marketing: video screens in some stores can determine who’s watching them and change ads accordingly.

Marketing in Action

Tailoring products and marketing programs to suit the tastes of specific individuals and locations.
Local marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores.
Individual marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.


Targeting strategies include:
Undifferentiated (mass) marketing:
Ignores segmentation opportunities.
Differentiated (segmented) marketing:
Targets several segments and designs separate offers for each.
Concentrated (niche) marketing:
Targets one or a couple small segments.
Micromarketing (local or individual marketing)

Selecting Target Market Segments

Figure 6.2:

Marketing Targeting Strategies

Ikea targets the aspiring global middle class by selling good-quality furniture that ordinary people worldwide can afford.

Marketing in Action

Consumer and business markets use many of the same variables for segmentation.
Business marketers can also use:
Operating characteristics.
Purchasing approaches.
Situational factors.
Personal characteristics.

Segmenting Business Markets

Multivariable segmentation systems developed by Claritas, Inc.
Potential Rating Index for Zip Markets (PRIZM NE).
Based on U.S. census data.
Classifies U.S. households into 66 clusters or segments within 14 different social groups.

Market Segmentation

Best to use multiple segmentation bases in order to identify smaller, better-defined target groups.
Start with a single base and then expand to other bases.
Multivariable segmentation systems such as PRIZM NE are becoming more common.

Market Segmentation

Consumers don’t always buy the least expensive offering in a given product category, particularly when they are seeking certain benefits.

What other benefits – aside from saving money – might car owners seek when shopping for insurance? Can you think of an auto insurance provider that targets consumers who seek those benefits?

Fuel for Thought

The Benjamin Hotel’s “Dream Dog” program provides dogs of wealthy owners with canine room service, dog bathrobes, a variety of dog bed styles, DVDs for dogs, and access to a Pet Psychic.

Marketing in Action

Identifies and targets the affluent for luxury goods.
People with low annual incomes can be a lucrative market.
Troubled economy makes marketing to all income groups a challenge.

Market Segmentation

Neglected gender segments can offer new opportunities.
12% of new Harley-Davidson purchases are now made by women.

Market Segm

Age, gender, family size, family life cycle, income, occupation, education, race, religion, generation, nationality.
The most popular bases for segmenting customer groups as needs, wants and usage often vary by demographics.
Easier to measure than most other types of variables.

Market Segmentation

Region of country

Market Segmentation

Demographic, geographic, psychographic and behavioral characteristics are used.

Dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.


Figure 6.1:

Designing a Customer-Driven Marketing Strategy

Chapter 6

Customer-Driven Marketing Strategy

Copyright © 2011 Pearson Education, Inc.  
Publishing as Prentice Hall

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Rest Stop: Reviewing the Concepts

Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning.
List and discuss the major bases for segmenting consumer and business markets.
Explain how firms identify attractive market segments and choose a market-targeting strategy.
Discuss how companies differentiate and position their products for maximum competitive advantage.

DiGiornio’s pizza positions itself against delivered pizzas, rather than other store bought frozen pizzas. The firm uses the “No tipping. No kidding. It’s not delivery, it’s DiGiornia!” slogan to promote its points of difference.

Marketing in Action

Differentiation and Positioning

Developing a positioning statement:
Format: “To (target segment and need) our (brand) is (a concept) that (point of difference).”
Example: “To busy mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go.”

Less for much less positioning in action: Southwest is a no frills, low-price airline whose employees go the extra mile to amuse, surprise, and entertain passengers.

Marketing in Action

Overall or full positioning of the brand is called the brand’s value proposition.

Figure 6.4:
Possible Value Propositions

Positioning should make a brand stand out from the rest of the pack. As a late entrant into the small city car market in 2009, Nissan chose to position the Cube as a “personal mobile device” rather than on the basis of affordability or customization (attributes the Cube shared with the competition).

Marketing in Action

Evaluate against the criteria at left

Worthwhile differences that could be promoted are:

Differentiation and Positioning

Differentiation and Positioning

Choosing a differentiation and positioning strategy involves:
Identifying a set of differentiating competitive advantages on which to build a position.
Choosing the right competitive advantages.
Selecting an overall positioning strategy.

Figure 6.3:

Positioning Map for Large Luxury SUVs

Perceptual positioning maps can help define a brand’s position relative to competitors.

The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.


Although Victoria’s Secret targets its Pink line of young, hip, and sexy clothing to women 18-30 years old, critics charge that Pink is being worn by girls as young as age 11.

Should Victoria’s Secret take action to stop selling Pink to girls under the age of 18? Why or why not?

Marketing in Action

Socially Responsible Targeting

Smart targeting helps both companies and consumers.
Marketing sometimes generates controversy and concern when targeting:
Vulnerable, minority or disadvantaged populations
Children and teens
Controversy arises when an attempt is made to profit at the expense of segments.

Coupling phone services with GPS devices provides marketers with a way to target location specific offers to consumers wherever they might be.

Why aren’t more marketers embracing mobile marketing?

Fuel for Thought

Etsy follows a concentrated marketing strategy to serve those who buy and sell homemade items.

Marketing in Action

Market targeting involves evaluating and selecting marketing segments.
Market evaluation considers:
Segment size
The largest segment isn’t always best.
Segment structural attractiveness
Competition, substitute products, power of buyers and suppliers are examined.
Fit with company objectives
Company resources.

Market Targeting

The “lefty” segment is difficult to measure

To be useful, market segments must be:

Requirements for Effective Segmentation

Learn more about Prizm by watching the USA Today’s flash presentation related to market segmentation.
Then visit the zip code lookup to see what Prizm says about your neighborhood!

Marketing in Action

Marketing in Action

Behavioral segmentation:
Occasion segmentation:
Special labels and promotions for holidays.
Special products for special occasions.
Benefits sought:
Different segments desire different benefits from products.

Market Segmentation

Age and life-cycle stage addresses the fact that consumer needs and wants change with age.
Avoid stereotypes in promotions based on age.
Promote positive messages when marketing to mature consumers.

Market Segmentation

Zipcar targets densely populated metro areas and congested college campuses where their car-sharing

services are most needed.

Marketing in Action

No single way to segment is best. Variables are often combined to better define segments.

Marketing in Action

Rest Stop: Previewing the Concepts

Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning.
List and discuss the major bases for segmenting consumer and business markets.
Explain how firms identify attractive market segments and choose a market-targeting strategy.
Discuss how companies differentiate and position their products for maximum competitive advantage.

Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired position to target consumers.
The marketing mix efforts must deliver the positioning strategy.
Firm must also monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

Consumers value customer service

Types of differentiation:
Product differentiation
Services differentiation
Channels differentiation
People differentiation
Image differentiation

Differentiation and Positioning

Competitive advantage:
An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices.

Differentiation and Positioning

Factors to consider:
Company resources
Product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies

Choosing a Targeting Strategy

Factors used:
Geographic location.
Economic factors.
Political and legal factors.
Cultural factors.
Intermarket segmentation:
Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.

Segmenting International Markets

Market Segmentation

Behavioral segmentation:
User status:
Nonusers, ex-users, potential users, first-time users, regular users.
Usage rate:
Light, medium, heavy.
Loyalty status:
Brands, stores, companies.
Divide into groups by degree of loyalty.

Behavioral segmentation:
Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product.

Psychographic segmentation:
Dividing a market into different groups based on social class, lifestyle, or personality characteristics.

Market Segmentation


Ditching Demons: Deleted demons from marketing lists, reduced promotions that tended to attract them, instituted 15% restocking fee.
Embracing Angels: Stocked more items, developed better service of interest to them. Established Reward Zone loyalty program. Remodeled stores to reflect core customer segments, trained clerks to ID and cater to Angels’ shopping preferences. Overall sales have doubled, early customer centric stores outsold traditional.

Best Buy – Serving the “Right” Customers

At Issue

History: Increased competition from Wal-Mart and online retailers forced Best Buy to reexamine segmentation strategy and positioning strategies.
Customer Centricity: Adoption of this strategy forced Best Buy’s task force to ID profitable “Angel” and costly “Demon” customers. Angels accounted for 20% of customers generating bulk of profits. Demons were extreme bargain hunters.

First Stop
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