Principles of Marketing
Nineteenth Edition
Session 6
Customer Value–Driven Marketing
Strategy: Creating Value for Target
Customers
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Learning Objectives
1 Customer value-driven marketing strategy
2 Market Segmentation
3 Market Targeting
4 Differentiation and Positioning
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Learning Objective 1
Customer value-driven marketing strategy: market
segmentation, targeting, differentiation & positioning.
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From Mass Marketing to Target
Marketing
• Companies now recognize that they
cannot appeal to all buyers in the
marketplace—or at least not to all
buyers in the same way.
• They must design customer-driven
marketing strategies that build the right
relationships with the right customers.
➢ most companies have moved away
from mass marketing and toward target
marketing: identifying market segments,
selecting one or more of them, and
developing products and marketing
programs tailored to each.
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Customer Value–Driven Marketing
Strategy
4 major steps in designing a Customer Value–Driven
Marketing Strategy
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Learning Objective 2
Market Segmentation
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Market Segmentation
Market segmentation requires dividing a market into
smaller segments with distinct needs, characteristics, or
behaviors that might require separate marketing strategies
or mixes.
• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation
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Market Segmentation Example
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2.1 Segmenting Consumer Markets
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2.1 Segmenting Consumer Markets
Geographic segmentation divides the market into different
geographical units such as nations, regions, states, counties,
cities, or even neighborhoods.
For bigger, global brands
segmentation by country
becomes even more
important. One brand that
always hones it’s
advertisements to the
country it’s targeting is
McDonald’s.
McDonald’s ADS different countries
(youtube.com)
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2.1 Segmenting Consumer Markets
Demographic segmentation divides the market into
segments based on variables such as age, life-cycle stage,
gender, income, occupation, education, religion, ethnicity,
and generation.
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Demographic segmentation
Age and life-cycle stage segmentation divides a market
into different age and life-cycle groups.
P&G has different toothpastes for different
age groups.
P&G targets kids with Crest Kid’s Cavity
Protection toothpaste. It’s gentle on tooth
enamel and has “fun- filled sparkles and
sparkle fun flavor just for kids
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Demographic segmentation
Gender segmentation divides a market into different
segments based on gender.
• Women make 90% of home improvement decisions.
• Women influence 80% of all household consumer
purchases.
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Demographic segmentation
Income segmentation divides a market into different
income segments.
The marketers of products
and services such as
automobiles, clothing,
cosmetics, financial services,
and travel have long used
income segmentation.
Many companies target
affluent consumers with luxury
goods and convenience
services.
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2.1 Segmenting Consumer Markets
Psychographic segmentation divides a market into
different segments based on social class, lifestyle, or
personality characteristics. Mountain Dew projects a
youthful, rebellious,
adventurous personality
whereas Coca-Cola Zero
appeals to target
personality types which
are more mature,
practical, and cerebral
but good-humored. Its
subtly humorous ads
promise “Real Coca-Cola
taste and zero calories.”
Lifestyle segmentation: Fast- casual restaurant
Panera caters to a healthy eating lifestyle
segment of people who want more than just
good-tasting food—they want food that’s good
for them, too.
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Psychographic segmentation
• People in the same demographic group can have very
different psychographic characteristics.
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2.1 Segmenting Consumer Markets
Behavioral segmentation divides a market into segments based on
consumer knowledge, attitudes, uses of a product, or responses to a
product.
Starbucks welcomes the autumn
• Occasion segmentation: grouping buyers
season with its pumpkin spice latte
according to occasions when they get the idea to
which is sold only in the fall. Now this
buy, actually make their purchase, or use the
drink is available in >50 countries and
purchased item.
is Starbucks’s top selling seasonal
• Benefit sought segmentation: grouping buyers
beverage of all time.
according to the different benefits that they seek
from the product.
• User Status segmentation: dividing markets into
nonusers, ex-users, potential users, first- time
users, and regular users of a product.
• Usage Rate segmentation: grouping markets
into light, medium, and heavy product users.
• Loyalty Status: dividing buyers into groups
according to their degree of loyalty.
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Benefit segmentation: Schwinn
makes bikes for every benefit
segment. “No matter what you’re
looking for,” says Schwinn, “we’ve
got a line of bikes for you.”
Benefits Sought: P&G’s
multiple brands of laundry
detergents to satisfy different
needs in the product category
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2.1 Segmenting Consumer Markets
Multiple segmentation is used to identify smaller,
better-defined target groups.
Nike has distinct
marketing campaigns
directed at professional
athletes, weekend
warriors, and people
who wear athletic
clothing as a fashion
statement.
Nike - Dream Crazier | #JustDoIt - YouTube
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2.2 Segmenting Business Markets
Consumer and business marketers use many of the same
variables to segment their markets.
Additional variables include:
• Customer operating characteristics
• Purchasing approaches
• Situational factors
• Personal characteristics
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2.3 Segmenting International Markets
• International firms need to group their world markets into
segments with distinct buying needs and behaviors.
• Companies can segment international markets using one
or a combination of several variables:
– Geographic location
– Economic factors
– Political and legal factors
– Cultural factors
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2.3 Segmenting International Markets
Intermarket segmentation/ cross-market segmentation
involves forming segments of consumers who have similar
needs and buying behaviors even though they are located in
different countries.
Zara—the world’s largest fast-fashion
retailer—targets fashion-conscious but
value-seeking shop- pers spread across
cultures in over 96 countries. All of Zara’s
more than 2,500 stores and nearly 40
online marketplaces globally feature similar
appeals, a kind of “reverse sticker shock”
based on stylish, good quality, and
constantly refreshed fashions offered at a
fraction of the price of high-end brands.
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2.4 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.
• Actionable: Effective programs can be designed for
attracting and serving the segments.
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Learning Objective 3
Market Targeting
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3.1 Evaluating Segments
In evaluating different market segments, a firm must look at
03 factors:
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3.2 Selecting Target Market Segments
After evaluating different segments, the company must
decide which and how many segments it will target.
A target market is a set of
buyers who share common
needs or characteristics that the
company decides to serve.
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Market-Targeting Strategies
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3.2 Selecting Target Market Segments
Undifferentiated marketing targets the whole market with
one offer.
• Mass marketing
• Focuses on common needs rather than what’s different
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3.2 Selecting Target Market Segments
Differentiated marketing targets several different market
segments and designs separate offers for each.
• Goal is to achieve higher sales and stronger position
• More expensive than undifferentiated marketing
Differentiated marketing: With more than 30 differentiated hotel brands, Marriott International
dominates the hotel industry, capturing a much larger share of the travel and hospitality market than
it could with any single brand alone.
https://www.marriott.com/marriott-brands.mi#luxury
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3.2 Selecting Target Market Segments
Concentrated marketing targets
a large share of a smaller market.
• Limited company resources
• Knowledge of the market
• More effective and efficient
Nước hoa Niche | Nước hoa cao cấp | namperfume
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3.2 Selecting Target Market Segments
Micromarketing is the practice of tailoring products and
marketing programs to suit the tastes of specific individuals and
locations.
• Local marketing
• Individual marketing
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3.2 Selecting Target Market Segments
Choosing a targeting strategy depends on
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies
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Learning Objective 4
Differentiation & Positioning
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Product Positioning
Product position is the way the product is defined by
consumers on important attributes.
The company must decide on a value proposition—how it
will create differentiated value for targeted segments and
what positions it wants to occupy in those segments.
Positioning: Spotify does more
than just stream music. It gives
you “Music for every mood.”
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Product Positioning
Positioning maps show consumer perceptions of
marketer’s brands versus competing products on important
buying dimensions.
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Choosing a Strategy
Choosing a Differentiation and Positioning Strategy
Competitive advantage is an advantage over competitors gained by
offering consumers greater value, either through lower prices or by
providing more benefits that justify higher prices.
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Identifying A Set Of Possible Competitive Advantages
Identifying a set of possible competitive
advantages to differentiate along the lines of:
• Product
• Services
• Channels
• People
• Image
Positioning on multiple competitive
advantages: Land Rover positions its new
Defender as combining its legacy off-road
performance with state-of-the-art electronics
and luxury on-road comforts.
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Choosing a Right Competitive Advantages
A competitive advantage should be:
• Important
• Distinctive
• Superior
• Communicable
• Preemptive
• Affordable
• Profitable
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Selecting an Overall Positioning Strategy
More for more: This positioning involves providing the most upscale
product or service and charging a higher price to cover the higher costs.
More for the same: Companies can attack a competitor’s more for more
positioning by introducing a brand offering comparable quality at a lower
price
The same for less: Offering the
same for less can be a powerful
value proposition—everyone likes a
good deal.
Less for much less: A market
almost always exists for products
that offer less and therefore cost
less.
More for less: The winning value
positioning strategy, one that makes
the company special to its target
consumers.
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Selecting an Overall Positioning Strategy
Develop a Positioning Statement
Positioning statement summarizes company or
brand positioning using this form: To (target
segment and need) our (brand) is (concept) that
(point of difference)
Positioning statement: Public Goods
is positioned as an online food and
household goods retailer that makes
healthy, sustainable, everyday
essentials accessible at a fair price.
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Communicating and Delivering the Chosen Position
• Choosing the positioning is often easier than
implementing the position.
• Establishing a position or changing one usually takes a
long time.
• Maintaining the position requires consistent performance
and communication.
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