CUSTOMER VALUE

DRIVEN MARKETING STRATEGY

 • The marketing logic by which the company hopes to create
Marketing Strategy customer value and achieve profitable customer
relationships.
Market Segmentation
• Buyers in any market differ in their wants, resources, locations, buying
attitudes, and buying practices. Through market segmentation,
companies divide large, diverse markets into smaller segments that
can be reached more efficiently and effectively with products and
services that match their unique needs.
• Market segmentation Dividing a market into distinct groups of buyers
who have different needs, characteristics, or behaviors and who might
require separate marketing strategies or mixes
Market Segmentation
• There could be many variables that might be used to segment the
market. Some of the major variables are as under.
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
• Behavioral Segmentation
Geographic Segmentation
• Geographic segmentation calls for dividing the market into different
geographical units, such as nations, regions, states, counties, cities, or
even neighborhoods. A company may decide to operate in one or a
few geographical areas or operate in all areas but pay attention to
geographical differences in needs and wants. Moreover, many
companies today are localizing their products, services, advertising,
promotion, and sales efforts to fit the needs of individual regions,
cities, and other localities.
Demographic Segmentation
• Demographic segmentation divides the market into segments based
on variables such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation. Demographic factors
are the most popular bases for segmenting customer groups.
• Demographic factors are the most popular bases for segmenting
customer groups- easier to measure & to assess the size of the target
market a
Psychographic Segmentation
• Psychographic segmentation divides buyers into different segments
based on lifestyle or personality characteristics. People in the same
demographic group can have very different psychographic
characteristics
Behavioral Segmentation
• Behavioral segmentation divides buyers into segments based on their
knowledge, attitudes, uses, or responses to a product.
• Occasion segmentation Dividing the market into segments according
to occasions when buyers get the idea to buy, actually make their
purchase, or use the purchased item.
• Benefit segmentation Dividing the market into segments according to
the different benefits that consumers seek from the product. e.g
wearable health and activity trackers
Requirement for Effective Segmentation
• 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. A segment should be the largest possible homogeneous group
worth pursuing with a tailored marketing program. It would not pay,
for example, for an automobile manufacturer to develop cars
especially for people whose height is greater than seven feet.
• Differentiable. The segments are conceptually distinguishable and
respond differently to different marketing mix elements and
programs. If men and women respond similarly to marketing efforts
for soft drinks, they do not constitute separate segments.
• Actionable. Effective programs can be designed for attracting and
serving the segments. For example, although one small airline
identified seven market segments, its staff was too small to develop
separate marketing programs for each segment.
Target Market
• Market segmentation reveals the firm’s market segment opportunities.
The firm now has to evaluate the various segments and decide how many
and which segments it can serve best. We now look at how companies
evaluate and select target segments.
• In evaluating different market segments, a firm must look at three factors:
• segment size and growth,
• segment structural attractiveness (BS/MS=Market Share)
• company objectives and resources
• First, a company wants to select segments that have the right size and
growth characteristics.
Target Market
• Target Market would be less attractive due to
• Lack of skills and resources to target large market in spite of good size,
growth and market share.
• Highly competitive Market
• Easy target for the New Entrants
• Actual or potential Substitute Products
• Power of Buyer
Target Market
• Even if a segment has the right size and growth and is structurally
attractive, the company must consider its own objectives and
resources. Some attractive segments can be dismissed quickly
because they do not go with the company’s long-run objectives. Lack
of skills and resources
• A company should only enter segments in which it can create superior
customer value and gain advantages over its competitors.
Target Market
• target market: A set of buyers who share common needs or
characteristics that a company decides to serve.
• After Evaluating company must decide which and how many
segments it will target.
• Undifferentiated Marketing
• Differentiated Marketing
• Concentrated Marketing
• Micro Marketing
Undifferentiated Marketing

• Using an undifferentiated marketing (or mass marketing) strategy, a

firm might decide to ignore market segment differences and target
the whole market with one offer. Such a strategy focuses on what is
common in the needs of consumers rather than on what is different.
The company designs a product and a marketing program that will
appeal to the largest number of buyers.
• Challenges
1. Difficulty in developing a product or brand
2. Trouble in competing with more focused brands (niches)
Differentiated Marketing
• Using a differentiated marketing (or segmented marketing) strategy, a
firm decides to target several market segments and designs separate
offers for each. For example, P&G
• P&G markets at least six different laundry detergent brands in the
United States (Tide, Gain, Cheer, Era, Dreft, and Bold), which compete
with each other on supermarket shelves. Then P&G further segments
each detergent brand to serve even narrower niches
Concentrated Marketing
• A concentrated marketing (or niche marketing) strategy, instead of
going after a small share of a large market, a firm goes after a large
share of one or a few smaller segments or niches. For example,
consider nicher Stance Socks or you may say Minnie Minors Pakistan
• Socks are mostly be sold as side line product in super stores or which
was a largely overlooked and undervalued market. So the founders of
Stance Sock found a gap in the US market and used niche target
marketing to capture that segment by offering value such as fun, style
and status. Now they are selling their socks ranging from $10 to $40 a
pair.
Concentrated Marketing
Advantage:
• Niching lets smaller companies focus their limited resources on
serving niches that may be unimportant to or overlooked by larger
competitors.
• Through this strategy they can foothold against the giant competitors
• For example, Southwest Airlines began by serving intrastate, no-frills
commuters in Texas but is now one of the nation’s largest airlines.
Micro Marketing
• Differentiated and concentrated marketers tailor their offers and
marketing programs to meet the needs of various market segments
and niches. At the same time, however, they do not customize their
offers to each individual customer. Micromarketing is the practice of
tailoring products and marketing programs to suit the tastes of
specific individuals and local customer segments. Rather than seeing a
customer in every individual, micromarketers see the individual in
every customer. Micromarketing includes local marketing and
individual marketing.
Micro Marketing
• Local Marketing. Local marketing involves tailoring brands and
promotions to the needs and wants of local customers. For example,
Marriott’s Renaissance Hotels has rolled out its Navigator program,
which hyper-localizes guest experiences at each of its 155 lifestyle
hotels around the world
Micro Marketing
• Individual Marketing. In the extreme, micromarketing becomes
individual marketing— tailoring products and marketing programs to
the needs and preferences of individual customers. Individual
marketing has also been labeled one-to-one marketing, mass
customization, and markets-of-one marketing