customer-driven mktg strat.

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Customer-Driven Marketing Strategy: Creating Value for Target Customers

6-2Prentice Hall, Copyright 2009

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 companies identify attractive market segments and choose a market-targeting strategy.

Discuss how companies differentiate and position their products for maximum competitive advantage in the marketplace.

Rest Stop: Previewing the Concepts


Dunkin’ Donuts Background: Shifted focus from donuts to

coffee in mid 90s; coffee accounts for 64% of sales.

Customers: Blue- and white-collar workers from of all race, age, and income groups. Want to be part of a crowd.

Positioning: Low-brow, “everyman” appeal; simple fare for working class.

Starbucks? Dunkin’ Donuts customers disliked Starbucks’ atmosphere, the way laptops used tabletops, the couch seating, coffee lingo, and high prices.

Future plans: Move upscale while keeping existing customers, expanding menu into pizza and smoothies.

Dunkin’ Donuts vs. Starbucks - SegmentationCase Study

Starbucks Background: 5,400 coffee

shops with 10,000 more planned by 2020.

Customers: Higher income professionals. Desire to standout as individuals.

Positioning: High-brow “third place” outside of home and office, featuring art, eclectic music, wireless Internet, and couches.

Dunkin’ Donuts? Starbucks customers “couldn’t bear that they weren’t special anymore.”


Designing a Customer-Driven Marketing Strategy

Designing a true customer-driven marketing strategy involves:►Segmentation►Targeting►Differentiation►Positioning


Market Segmentation

Segmentation:► Dividing a market into smaller groups with distinct needs,

characteristics, or behaviors that might require separate marketing strategies or mixes.

Key variables:► Geographic► Demographic► Psychographic► Behavioral

No single way to segment is best. Often combine more than one variable to better define segments.


Market Segmentation

Geographic:►World region or country►Region of country►City or metro size►Density►Climate


Market Segmentation

Demographic:►Age, gender, family size, family life cycle,

income, occupation, education, race, religion, generation, nationality.

►The most popular bases for segmenting customer groups.

►Easier to measure than most other types of variables.


Market Segmentation

Age and life-cycle stage addresses the fact that consumer needs and wants change with age:►P&G has different toothpastes for different

age groups.

Avoid stereotypes in promotions. Promote positive messages.


Market Segmentation

Gender:► Neglected gender segments can offer new

opportunities (e.g., Nivea for men).

Income:► Identifies and targets the affluent for luxury goods.► People with low annual incomes can be a lucrative

market.► Some manufacturers have different grades of

products for different markets.


Market Segmentation

Psychographic segmentation:►Dividing a

market into different groups based on social class, lifestyle, or personality characteristics.

Behavioral segmentation:►Dividing buyers

into groups based on consumer knowledge, attitudes, uses, or responses to a product.


Market Segmentation

Behavioral segmentation:► Occasion segmentation:

• Special promotions and labels for holidays.► (E.g., Hershey Kisses)

• Special products for special occasions.► (E.g., Kodak disposable cameras)

► Benefits sought:• Different segments desire different benefits from

products.► (E.g., P&G’s multiple brands of laundry detergents to

satisfy different needs in the product category).


Behavioral segmentation:►User status:

• Nonusers, ex-users, potential users, first-time users, regular users

►Usage rate: • Light, medium, heavy

►Loyalty status: • Brands, stores, companies

Market Segmentation


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

PRIZM NE:►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 and organizes

them into 66 clusters or segments within 14 different social groups.


Segmenting Business Markets

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 International Markets

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.


Requirements for Effective Segmentation

To be useful, market segments must be:►Measurable►Accessible►Substantial►Differentiable►Actionable


Evaluating Market Segments

Segment size and growth:► Analyze current segment sales, growth rates, and

expected profitability. Segment structural attractiveness:

► Consider competition, existence of substitute products, and the power of buyers and suppliers.

Company objectives and resources:► Examine company skills and resources needed to

succeed in that segment.► Offer superior value and gain advantages over

competitors.


Market Targeting

Market targeting involves:►Evaluating marketing segments.

• Segment size, segment structural attractiveness, and company objectives and resources are considered.

►Selecting target market segments.• Alternatives range from undifferentiated

marketing to micromarketing.►Being socially responsible.


Selecting Target Market Segments

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)


Micromarketing

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.


Choosing a Targeting Strategy

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


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.

Socially Responsible Targeting


Differentiation and Positioning

A product’s 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.

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


Choosing a differentiation and positioning strategy involves:►Identifying a set of possible value

differences and competitive advantages on which to build a position.

►Choosing the right competitive advantages.►Selecting an overall positioning strategy.




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.

Competitive advantage:►Extent to which a company can position

itself as providing superior value.• Achieved via differentiation.



Differentiation► Actually differentiating the marketing offering to

create superior customer value. Types of differentiation:

► Product differentiation► Services differentiation► Channels differentiation► People differentiation► Image differentiation



Choosing the right competitive advantage requires selecting how many and which differences to promote.

Differences that could be promoted are:► Important► Distinctive► Superior► Communicable► Preemptive► Affordable► Profitable


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

Potential value propositions include:► More for more: More benefits for higher price.► More for same: More benefits for the same price.► More for less: More benefits for a lower price.► Same for less: Same benefits for a lower price.► Less for much less: Fewer benefits for much lower

price.



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.”



Company must take strong steps to deliver and communicate the desired position to target consumers.►The marketing mix efforts must support the

positioning strategy. Firm must also monitor and adapt the

position over time to match changes in consumer needs and competitors’ strategies.

Communicating and Delivering the Chosen Position


Thank you very much !!!


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mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

customer-driven mktg strat.

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