Chapter-7

Customer Value–Driven
Marketing Strategy:
Creating Value for Target
Customers
► Market segmentation Marketing Strategy
► Market targeting (targeting)
► Differentiation
► Positioning
► Market Segmentation Marketing Strategy
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 Targeting (Targeting)

► Positioning
Arranging for a market offering to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of target
consumers.
Segmenting
Consumer Market
 Segmenting Consumer
Market
A market segment consists of a group of customers who share similar sets of needs & wants.

Heterogeneous: Market comprises of customer who are different from each other.

Homogeneous: Here all the customers are similar in term of gender, age, attitude. They
have NWD. Each homogeneous group response in a same way in a mkt mix. They want same
Product, afford same price.
 Segmenting Consumer
Market
► Geographic Segmentation
Dividing a market into different geographical units, such as nations, states,
regions, counties, cities, or even neighborhoods.
► Demographic Segmentation
Dividing the market into segments based on variables such as age, life-cycle
stage, gender, income, occupation, education, religion, ethnicity, and
generation.
 Demographic
Segmentation
► Age and life-cycle segmentation:
Dividing a market into different age and life-cycle groups.

► Gender segmentation:
Dividing a market into different segments based on gender.

► Income segmentation:
Dividing a market into different income segments
 Psychographic
Segmentation
► Psychographic Segmentation
Dividing a market into different segments based on lifestyle or
personality characteristics.

- Lifestyle
- Personality
 Behavioral
Segmentation
► Behavioral segmentation
Dividing a market into segments based on consumer knowledge, attitudes,
uses of a product, 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
- User Status: Markets can be segmented into nonusers, ex-users, potential
users, first-time users, and regular users of a product.
 Behavioral
Segmentation
► Usage Rate.
Markets can also be segmented into light, medium, and heavy product users
► Loyalty Status.
A market can also be segmented by consumer loyalty

i) Hardcore Loyal: These are those buyers who buy only one brand all the time.
ii) Split Loyal: These are those customers who are loyal to two or three brands.
iii) Shifting Loyal: These are those customers who shift from one brand to other.
iv) Switchers: They are those who show no loyalty to any brands.
•Hardcore Loyal: One brand, always.
•Split Loyal: Loyal to two or three brands.
•Shifting Loyal: Loyalty shifts between brands.
•Switcher: No brand loyalty, always looking for the
best option.
 Requirements 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.
• 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.
Market Targeting

► Undifferentiation/mass market
► Differentiation market
► Concentrated / niche market
► Local Market
► Individual market
i) Undifferentiation/Mass Market:
Go for whole market with 1 mkt mix. Don't go for mkt segmentation.\
Ex : Coca-cola

ii) Differentiated Market:

v) Individual Market:
Design 1 mkt mix for 1 individual customer.
1 customer - 1 4ps
Ex: Event management, tailor etc.
Certainly, let's discuss the different market targeting
strategies with examples:
1. Undifferentiated/Mass Market
•Definition: In this strategy, the company treats the entire
market as a single segment and aims to appeal to a broad
range of customers with a single marketing mix.
•Example: Coca-Cola's classic cola product. Coca-Cola
uses a mass marketing approach, targeting a wide range
of consumers with its classic cola flavor. They focus on
creating a strong brand image and using consistent
marketing messages across all channels
Differentiation Market
•Definition: This strategy involves creating unique product
offerings or marketing messages to appeal to specific customer
segments. The company differentiates itself from competitors by
offering something unique and valuable to its target audience.
•Example: Apple's iPhone. Apple differentiates itself from
competitors like Samsung by focusing on design, user experience,
and a strong ecosystem of apps and services. They target
customers who value innovation, style, and a seamless user
experience
. Concentrated/Niche Market
•Definition: This strategy focuses on a
specific, narrow segment of the market.
The company tailors its marketing
efforts to meet the unique needs and
preferences of this niche market.
•Example: A company that specializes
in producing vegan, gluten-free, and
organic dog food. This company targets
a specific niche of dog owners who are
concerned about their pet's health and
well-being. They focus on providing
high-quality, specialized products that
cater to the specific dietary needs of
this niche market.
Local Market
•Definition: This strategy focuses on targeting
customers within a specific geographic area. The
company tailors its marketing efforts to the local
culture, preferences, and needs of the target
market.
•Example: A local bakery that specializes in baking
traditional cakes and pastries for a specific
community. They focus on using locally sourced
ingredients, catering to local tastes, and
participating in local events.
Individual Market
•Definition: This strategy focuses on individual customers and
their unique needs and preferences. It involves creating
customized products and services for each individual customer.
•Example: A tailor-made suit company that creates custom-made
suits for each client based on their specific measurements, style
preferences, and lifestyle. They offer a personalized experience
and cater to the individual needs of each customer.
Which Differences
to Promote
► Important: The difference delivers a highly valued benefit to target
buyers.
► Distinctive: Competitors do not offer the difference, or the company
can offer it in a more distinctive way.
► Superior: The difference is superior to other ways that customers
might obtain the same benefit.
► Communicable: The difference is communicable and visible to
buyers.
► Preemptive: Competitors cannot easily copy the difference.
► Affordable: Buyers can afford to pay for the difference.
► Profitable: The company can introduce the difference profitably.
Selecting an Overall Positioning Strategy
Selecting an Overall Positioning
Strategy
► More for More:
More-for-more positioning involves providing the most upscale
product or service and charging a higher price to cover the higher
costs. A more-for-more market offering not only offers higher
quality, it also gives prestige to the buyer. It symbolizes status and a
loftier lifestyle. Four Seasons hotels, Patek Philippe watches,
Starbucks coffee, Louis Vuitton handbags, Mercedes automobiles,
SubZero appliances—each claims superior quality, craftsmanship,
durability, performance, or style and therefore charges a higher
price.
Selecting an Overall Positioning
Strategy
D More for the Same:
A company can attack a competitor’s value proposition by
positioning its brand as offering more for the same price. For
example, Target positions itself as the “upscale discounter.” It
claims to offer more in terms of store atmosphere, service, stylish
merchandise, and classy brand image but at prices comparable to
those of Walmart, Kohl’s, and other discounters.
Selecting an Overall Positioning
Strategy
► More for Less:
Of course, the winning value proposition would be to offer more for less.
Many companies claim to do this. And, in the short run, some companies can
actually achieve such lofty positions. For example, when it first opened for
business, Home Depot had arguably the best product selection, the best
service, and the lowest prices compared with local hardware stores and other
home-improvement chains.
Yet in the long run, companies will no doubt find it very difficult to sustain
such bestof-both positioning. Offering more usually costs more, making it
difficult to deliver on the “for-less” promise. Companies that try to deliver
both may lose out to more focused competitors.
Selecting an Overall Positioning
Strategy
► The Same for Less:
Offering the same for less can be a powerful value proposition—
everyone likes a good deal. Discount stores such as Walmart uses
this positioning. They don’t claim to offer different or better
products. Instead, they offer many of the same brands as
department stores but at deep discounts based on superior
purchasing power and lower-cost operations.
 Selecting an Overall Positioning
Strategy
► Less for Much Less:
▪ A market almost always exists for products that offer less and therefore cost
less. Few people need, want, or can afford “the very best” in everything they buy.
In many cases, consumers will gladly settle for less-than-optimal performance or
give up some of the bells and whistles in exchange for a lower price. For
example, many travelers seeking lodgings prefer not to pay for what they
consider unnecessary extras, such as a pool, an attached restaurant, or mints
on the pillow. Hotel chains such as Ramada Limited, Holiday Inn Express, and
Motel 6 suspend some of these amenities and charge less accordingly