BM3108 INTRODUCTION TO MARKETING Lecture Five Customer Driven Marketing Strategy Creating Value for Target Customers
Overview
Define the meaning of market segmentation, targeting, differentiation and positioning Discuss the major ases for segmentation !"plain ho# companies identify attractive market segments and choose a market$targeting strategy Discuss ho# companies differentiate and position their products for competitive advantage
DESIGNING A CUSTOMER-DRI EN MARKETING STRATEG!
Designing a true customer$driven marketing strategy involves%
Segmentation Targeting Differentiation &ositioning
MARKET SEGMENTATION
Se"#e$t%ti&$
Dividing a market into smaller groups #ith distinct needs, characteristics, or ehaviors that might re'uire separate marketing strategies or mi"es marketing strategies Ke' %ri%()e*+ (eographic, Demographic, &sychographic, )ehavioral *o single #ay to segment is est+ ,ften com ine more than one varia le to etter define segments
MARKET SEGMENTATION
Ge&"r%,-ic+
-orld region or country .egion of country City or metro si/e Density Climate
MARKET SEGMENTATION
De#&"r%,-ic
0ge, gender, family si/e, family life cycle, income, occupation, education, race, religion, generation and nationality The most popular ases for segmenting customer groups !asier to measure than most other types of varia les
MARKET SEGMENTATION
.*'c-&"r%,-ic Se"#e$t%ti&$
Dividing a market into different groups ased on social class, lifestyle or personality characteristics
Be-%vi&r%) Se"#e$t%ti&$
Dividing uyers into groups ased on consumer kno#ledge, attitudes, uses or responses to a product
SEGMENTING BUSINESS MARKETS
Customers and usiness markets use many of the same varia les for segmentation )usiness marketers can also use%
,perating characteristics 1should #e serve heavy users, medium, light or non user23 &urchasing approaches 1serve those companies seeking 'uality2 Service2 ,r price23 Situational factors 1should #e serve company that need 'uick and sudden delivery or service23 &ersonal characteristics 1should #e serve risk taking or risk avoiding customers23
SEGMENTING BUSINESS MARKETS
4actors used segmentation%
in
international
market
(eographic location !conomic factors &olitical and legal factors Cultural factors
5ntermarket Segmentation
4orming segments of consumers #ho have similar needs and uying ehavior even though they are located in different countries
RE/UIREMENT FOR EFFECTI E SEGMENTATION
E ALUATING MARKET SEGMENTS
Se"#e$t *i0e %$1 "r&wt 0naly/e current segment sales, gro#th rates and e"pected profita ility
Se"#e$t *tructur%) %ttr%ctive$e**
Consider competition, e"istence of su stitute products and po#er of uyers and suppliers
C&#,%$' &(2ective* %$1 re*&urce*
!"amine company skills and resources needed to succeed in that segment
MARKET TARGETING
Market targeting involves%
Ev%)u%ti$" #%r3et *e"#e$t*
Segment si/e, segment structural attractiveness, company6s o jectives and resources are considered
Se)ecti$" t%r"et #%r3et *e"#e$t*
0lternatives range from undifferentiated marketing to micromarketing
Bei$" *&ci%))' re*,&$*i()e
(enerates controversy and concern
SELECTING TARGET MARKET SEGMENTS
SELECTING TARGET MARKET SEGMENTS
M%** M%r3eti$"
0 firm might decide to ignore market segment differences and target the #hole market #ith one offer
Di44ere$ti%te1 M%r3eti$"
0 market$coverage strategy in #hich a firm decides to target several market segments and designs separate offers for each
SELECTING TARGET MARKET SEGMENTS
C&$ce$tr%te1 M%r3eti$"
0 market$coverage strategy in #hich a firm goes after a large share of one or a fe# segments or niches
Micr&#%r3eti$"
The practice of tailoring products and marketing programs to the needs and #ants of specific individuals and local customer segments includes )&c%) #%r3eti$" and i$1ivi1u%) #%r3eti$"
SELECTING TARGET MARKET SEGMENTS
Micr&#%r3eti$"
L&c%) M%r3eti$"
Tailoring rands and promotions to the needs and #ants of local customer groups $ cities, neigh orhoods, specific stores 1(roupon3
I$1ivi1u%) M%r3eti$"
Tailoring products and marketing programs to the needs and preferences of individual customers 17aptop Demonstration D!77, Smart Car3
C5OOSING A TARGETING STRATEG!
4actors to consider%
%6 (6 c6 16 e6 C&#,%$' Re*&urce* .r&1uct %ri%(i)it' .r&1uct7* Li4e-C'c)e St%"e M%r3et %ri%(i)it' C&#,etit&r*7 M%r3eti$" Str%te"'
SOCIALL! RES.ONSIBLE TARGETING
Smart targeting helps oth companies and consumers Marketing sometimes generates controversy and concern #hen targeting
Vulnera le, minority or disadvantaged Children and teens
Controversy arises #hen an attempt is made to profit at the e"pense of segments
DIFFERENTIATION AND .OSITIONING
0 product6s position is%
The #ay the product is defined y consumers on important attri utes the place the product occupies in consumers6 minds relative to competing products &erceptual positioning maps can help define a rand6s position relative to competitors
DIFFERENTIATION AND .OSITIONING
Choosing a differentiation strategy involves% and positioning
5dentifying a set of possi le value differences and competitive advantages on #hich to uild a position Choosing the right competitive advantages Selecting an overall positioning strategy
DIFFERENTIATION AND .OSITIONING
I1e$ti4'i$" ,&**i()e v%)ue 1i44ere$ce* %$1 c&#,etitive %1v%$t%"e*
The key to #inning target customers is to understand their needs etter than competitors do and deliver more value C&#,etitive %1v%$t%"e
!"tent to #hich a company can position itself as providing superior value 0chieved via differentiation
DIFFERENTIATION AND .OSITIONING
Di44ere$ti%ti&$
0ctually differentiating the market offering to create superior customer value Types of differentiation%
&roduct Differentiation Services Differentiation Channels Differentiation &eople Differentiation 5mage Differentiation
DIFFERENTIATION AND .OSITIONING
DIFFERENTIATION AND .OSITIONING
C-&&*i$" t-e ri"-t c&#,etitive %1v%$t%"e
.e'uires selecting ho# many and #hich differences to promote Differences that could e promoted are%
i+ ii+ iii+ iv+ v+ vi+ vii+ 5mportant Distinctive Superior Communica le &reemptive 0fforda le &rofita le
DIFFERENTIATION AND .OSITIONING
Se)ecti$" %$ &ver%)) .&*iti&$i$" Str%te"'
,verall or full positioning of the rand is called the rand6s value proposition &otential value propositions include%
i+ ii+ iii+ iv+ v+ More for more more enefits for higher price More for same more enefits for the same price More for less more enefits for a lo#er price Same for less same enefits for a lo#er price 7ess for much less fe#er enefits for much lo#er price
DIFFERENTIATION AND .OSITIONING
Deve)&,i$" % ,&*iti&$i$" *t%te#e$t
Company and rand positioning should up in a positioning statement .&*iti&$i$" St%te#e$t e summed
0 statement that summari/es company or positioning
rand
F&r#%t
8To 1target segment and need3 our 1 rand3 is 1a concept3 that 1point the difference39
DIFFERENTIATION AND .OSITIONING
Developing a positioning statement
E8%#,)e
8To (u*' ,r&4e**i&$%)* w-& $ee1 t& %)w%'* (e i$ t-e )&&,, B)%c3Berr' is a wire)e** c&$$ectivit' *&)uti&$ that "ive* '&u %$ e%*ier9 #&re re)i%()e w%' t& *t%' c&$$ecte1 t& 1%t%9 ,e&,)e %$1 re*&urce* w-i)e &$ t-e "&9
COMMUNICATING AND DELI ERING T5E C5OSEN .OSITION
Company must take strong steps to deliver and communicate the desired position to target consumers
The marketing mi" positioning strategy efforts must support the
4irm must monitor and adapt the position over time to match changes in consumer needs and competitors6 strategies
