sisi dO. ine PABYol pa ees ae cd oy ta) | ~ A Philip Kotler | Gary Armstrong Prafulla Y. Agnihotri | Ehsan ul Haque 0 hs c.- qv) =Chapter 7 Customer-Driven Marketing Customers Strate SY Creating Value for Target Crate inyawtanensteireeer PREVIEW | te mpanane of undestanng conser ond the marepace onan: th at ba yen yore nw ey dee dase ome Sy ons {Stes tpt oot fuer yanmar maken Scaey eine To ve vp rakes ie meaning Cs tarer gaps Gagmenaton, cheoe veh caome rt ste {ageing crete mre gs tat et sve ated stone {citrenaton sn poston te often then cose (ons. Than, te chapters ha ftw expe the actin keting tolth Four P—by wtih markets big ese stead toile ‘Wel stat thischapter wh acess from Ln, Whe itcomes to targeting 2nd potiong te brands forthe te, eh ‘no company does beter than Dimah. Her, we lok = he Diman scored on impart customer segment—peope longed forthe racional sephsteaon and cn ee kane Sty postoned ts fast-groving Dinah "Wate bred 19 mee the sped needs of hot nene, ‘gan. Dinah erating ca high, exciting and shen able At Dima, tain rocks! Dinah,» company funded in 1988 by Mel. Femando and named after his wo sons Dilan an Mali, as ben inpied bythe vision ofits founder. Fernando had noi with concern hat fet had over the year, become an oi-ashionad comma, Dende! with en lenves fo varios parts of the wel, with an ‘je toward cost reduction an soldat counts Wi the ea cio and many other eins he Indian subcontinent ea had lost ts earterenitage nd lav. Asa suppl of pare Ceylon te” to many countries, Femando wncemtood the consuer need for Premium quality tn. He observed has large segment of cr us fomors wate longing fr the tadionsl gual, feshnesy. en utenti in ta He decide to ofer whi hee customers Were ooking fe, 5 he loved ten. Dia ed stent in contig the value chain fea fer authene garnet ingle, ure Ceylon tat hese ts drinkers withthe promise of en "the ‘way ured te As prt ofthe strategy to upgrade the image ote inthe minds of people and 4 provide prelum te to dscering custanen, Dinah focused an intersting customer group-—the hoes ed restaurant gent Fenando notoed tat he quay of ts avail blz even at feta hots and restaurant ic ob dai ‘The patlons seemed to prefer their home-tred eno the fea serve in these plats. Dicussons wih these insionl cus ‘mer (execute choo and beverage detory, and purchas- Ing managers) imcovered many teresting nigh, Mono tem wore not aja ofthe opportuni in fe they conidered its an ‘important add-on. The purchasing ots wn simply ded ono "he support ofthe chose cde supplies Mot of tee os Is ete though that ea Was sing an ld shined think 160 iliy customers were interested in dfereniting thee offen {o provide innovative and exing cstomer expences, ut the id no noe hoe sling th polenta Dita launched ticted progam called the Seven-Slar Lamy Ten Experience which aimed tad cacterent tne dithing hough pis pre) tation eter sri and by pang tea with aston. ‘heh latin he Sever Lamy Tn Exerc sth poset Dinah isch a paadizesing range of tes ele ate” Whi Sale, ean ged” Wi pte a ig fine wing, borowing the einai destbed suc, ep ton and tng in" Watts Four noes ou) fines tegong eons Si Lana, were pred and it ste fue ages of wine—Changuge,Fnst Na, Sir ae CCabemetSuigen. The Wate sglengon ant singer ta uper prem, The superpemium Wate sre of boutique teas~Yto tte, Meds Watt, de Wette and Ran Watt—bost ofthe unique hertagg of each Stl Lankan ea-growing locate which alone grows that special brand ata tas The ospley apes of Wate wos fxtsnced ung Watte-branded Soe pln towltand pom Waar ere a Wate tes serie ms he nad, hh eat Aetofarvingtst© ‘Satof sora.chapter 7 | ClstomerDrvan Marketing stoteay: Creating Vole forTerget Customers 161 {Sega ek ein sc part of spreading the word howd Atodation of Chel Soiees in the Middle East, and pat 0 fr and hospi profesional es Hospitality operators Wel 2 ial es thinking an Were meplive sich colaboreions The (Sob scepted bythe indus, axed oth Sueno id inode tocar tothe nendsol the youth, idends. Th succes of Dilmah withthe boutique tea concept wih ecpehod the tases of radely diferene electors of the hospitality sector ls aided the brand's tage and appeal iver gre tee ncn rene (ons exper mised. armongat etl customer, where the sales of Dima shot op ‘uss, mackie wih Jee and ther nnaleshoic Founded in the midst ofa civil war in 198 and compet rapa) ad her hot sn ideas Te sie ws resend with giants f the FMCG werld, ila has effectively cet wey tute Ress? notion Dima eshancedthe appeal niche player anymore. tis now the world’s third-largest “ic lhe tase by Inning -bresandalae, hicand- standalone plabal ea bend, wth the sper premium oF “bow ray oie sing Dltmah te. ets pce! a pving gus” ten ctepory coniuting over 2D percent of the com larket segmentation Compania recngize hat they cana ppl tall buyer in the markatplace, rat es not Se eee jer wal buyers in the same way: Buyer ar oo eros, to wily seater and to varied in thet motndstne recy, nea rel buying paces Moreover he cepa theses vary wel in thr abet serve Tics or een hat_ Gren sagen ofthe mane! Intec Hke PC, a company mast end the parts ofthe markt eset that tan sive Hest and most profaly. emust design cesmerdeven marketing statis that etna sapere) eg batons with the ight customers. forte exgeting “Thus, most companies have moves may fom mass marketing nd toward get mating— posing) 4a, Mentfying mare gent lenge or more fhe ad develo ros nd mrt = In the fest two steps, the company selects the customers that it will sevve, Market segmentation eboney Soe Maan ee aie sopcaie aang ete cr mca, Th compery dees der Poti ofeing_teretng or targeting concreting ech mat ementacvens and seeing ac a he compen dies on ae Propnson—on he clenaertian nef ee Ferrio lve ccunlyaitcening bc ens markt ofesg 0Be 324 Port mree | Designing a Customer Onven Shategy and Mix | ‘Segmentation, Targeting, Ditferentiation, and Positioning Decisions ‘Retailers must st segmont and define their target narkets and then decide hoe they will tine and position themselves in these markets Should the store focus on upscale, mis ddownscale shoppers? Do target shoppers want vay, depth of assortment, canvenienee ries? Until they define and profile their markets, ealers cannot make consistent deisios product assrtment, services, pricing, advertising, sore dae, o any ofthe other deci snus uppoe thee postions, Too many retailers, even big ones fall to eine thet target markets and pasiions “They tried to have “something for everyone” anc end up saistying no market well. For © what market does Sears arge? What sits value proposition? For yers nov the venerable lion retailer in the United Stats has struggled nucessully fo answer these qustce _esulking in customer apathy and stagnant sales nd profits "We have a lot of lapsed cust Saye Sean's new chief marketing oie. "Sears isa great brand in people's minds. We've! fut ite less tp of min" The answer? “We have to make sue tha the overall custome "Henee—merchandise, instore environment) sevice, and marketing—are the best att ‘be andl working together to create a difermiat proposition that makes someone come versus going somewhere else” In contrast, sucessful retailer define thelr target markets well and position ther strongly. For example, Big Bazaar promises the lowest posible prices to its customers ro tagline estou nar? (it doesnt get cheapesthan this) I hs postions itself sry rice and so does Wal-Mart. For decades, Ws-Mrtconastnily promised “Always lowe Akon." Recently it succesfully extended this positioning to include what thse aly» ae ‘ean to ts cstomers It now promises that eastorers wil “Save money, Live beter” TEWab-Mart owns thelow-price postin, hw an other discounters hope to compete? Agp answer is good tangetng and positioning, For example, rather than facing WalMart he “Target—or Tara as many fans cll tin the United Statea—thrives by aiming ta seming ‘moronic “upscale discount” niche. thas become te nations number discount chain by 6 low prices butrisng above the discount fray with upmarket style and design and higher grad se Tarr’ "Expect more, pay less” positioning sts i part and helps insulate i fom Wat ‘An the other side of price specram, an example of upmatk, sophisticated retin ‘higher quality products and service from the subcontinent stat of ODEL department st strana" ‘MEL Sei Lanka's most prominent and glamorous example of tailing success Starting single company focusing on the etal garment rade, ODEL has eansformad rapidly over yous, Toy, itis the lagest department store in Si Lanka. The lagsipstre spans over 36 ‘Square feet. The buildings architecture a combination of colonial grandeur interspersed + lass and glistening meta “Te ist reason for ODEL's success a ng tis manager is its eens com ‘ment to providing & wide range high-qualty prods ots discerning « tomers. The ODEL brand represete © temporary international style, The comps ns foused on the ite and tend sn ofthe market and has posdoned isl las moder, and intemational The st houses the largest colton of nterati signer brands in Sei Lanka, incu) Dissel, Gas, Morgan, Kenzo, Calvin Ki, Almest Famous, and Savage Culture dition t elthing ant acossories, CE) also sels household appliances anid cx sori. I also has 2 “Daigh” departing that sels sweet indulgences am choco to exotic ts Other departments 2 O°)‘Chapter 13 | Retaing and Wholescing include spt, perfume and cosmetics, books an music, shes and handhag, ely gage, stationery git wrap, and souvenir ‘The secon! reason for ODEL's sucess isthe quality ofits employees. The company strongly believes in providing excellent services to its customers, which snot posible without «highly ‘motivated workforce, ODEL' philosophy isto be the employe of choice. Apart fom extensive texning to all staf members, ODEL provides opportunites for personal development and eer proseason Allthes efforts have made ODEL a brand that has strong recognition both locally and intern ‘only. About 50 percent of ODEL's customers are tui visting S Lanka, while the lca comprise the et. The company ha witnessed strong growth with he 2007 sale turnover hav ring around 14 milion, Product Assortment and Services Decision Retailers must decide on thee major product variables: pfu atvortment, sere mit, ne hore ‘The retailer's product eset should diferente the retailer while matching target shop ot’ expectations. One strategy isto offer merchant that no other competitor carses such oe store brands or national brands on which it holds exclusives. To diferent tall. retaler an lain excusve rights to carry a well-known designer's abel for instance, alongwith ts own private-label Ines, For example, hoppers Stop offers private-label brands ike Stop and Kashish ‘ong with all the sigjor national brands of menswesr such as Van Heusen, Lous Pilippe, Arow, and Peter Engiand, Another sate’ to feature blockbuster merchandising events—Bloomingdale'sin the Unie Sates known for runing spectacular shows featuring goods froma certain country, such a nia ‘9¢ China. Or the retailer can ofr surprise merchandise, a when Costco oles surprise scorns of cconds, overstock, and closeouts Finally, the retailer cn iferentiate ise by oleing highly targeted product assortment—Lane Bryant canes plus-size clothing; Brookstone offers a ea ‘sssorient of gadgets in what amounts to an adul fy store. ‘The series mis can also help set one retailer apart from snother, For example, some ears lnvitecustomes to ask questions or consult service mpreseniativesin person ova phane ot ky ‘board. Home Depot offers a diverse mix ofservies to do-i-yourseles,fom "how #0 ates toa roprietary crit card. Nordstrom promise “ake eae ofthe customer, no mater what takes ‘Thesis stmephrs another important een in the elles prod areal. The rear wants ‘o crate a ungie store experience, ne that sus the get markt and moves customers to uy. Aor ‘sample, Apple's al sts ae very seductive places ‘The toe design i en, simple and just oneng with siyle-much lke an Apple iPod or iPhone. The srs Invite shoppers to stays wile use the eaipment and soak pal ofthe exang raw technology ‘Was? o'clock inthe morning but in the sbi ranean retailing mecea in Midtown Manhatian, ‘othervse known asthe Apple store, it might as well have been midaéernoon. Late one night shortly before Chistmas, parents pushed strollers and tourists straight off the plane mingled with nocturnal New Yorkers, clicking though iPod playlists, cruising the Internet on MacBooks, a touch-pedding their way around iPhones. And hough the night cheerful als stall stayed busy ringing up customers at the main ‘counter and on hand-held devices ins uniner rupted stream of brckandemertar com ‘only has the company made many of tne lke gathering places, but the be 4 ee