1. Chapter Seven
Chapter 7- slide 1
Chapter Seven
Customer-Driven Marketing Strategy:
Creating Value for Target Customers

2. Customer-Driven Marketing Strategy:
Creating Value for Target Customers
• Market Segmentation
• Market Targeting
Topic Outline
Chapter 7- slide 2Copyright © 2010 Pearson Education, Inc.
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• Market Targeting
• Differentiation and Positioning

3. Market segmentation is the process that
companies use to divide large
heterogeneous markets into small markets
Market Segmentation
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heterogeneous markets into small markets
that can be reached more efficiently and
effectively with products and services that
match their unique needs

4. Market Segmentation
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5. • Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
Market Segmentation
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• Segmenting international markets
• Requirements for effective segmentation

6. Market Segmentation
Geographic
segmentation
Demographic
segmentation
Segmenting Consumer Markets
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Psychographic
segmentation
Behavioral
segmentation

7. Market Segmentation
• Geographic segmentation divides the
market into different geographical units
such as nations, regions, states, counties,
Segmenting Consumer Markets
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such as nations, regions, states, counties,
or cities

8. Market Segmentation
Demographic segmentation divides the market
into groups based on variables such as age,
gender, family size, family life cycle, income,
Segmenting Consumer Markets
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gender, family size, family life cycle, income,
occupation, education, religion, race,
generation, and nationality

9. Market Segmentation
Age and life-cycle stage segmentation is the
process of offering different products or
using different marketing approaches for
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using different marketing approaches for
different age and life-cycle groups
Gender segmentation divides the market
based on sex (male or female)

10. Market Segmentation
Income segmentation divides the market
into affluent or low-income consumers
Psychographic segmentation divides
buyers into different groups based on
Segmenting Consumer Markets
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buyers into different groups based on
social class, lifestyle, or personality
traits

11. Market Segmentation
Behavioral segmentation divides
buyers into groups based on their
knowledge, attitudes, uses, or
responses to a product
Segmenting Consumer Markets
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responses to a product
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status

12. Market Segmentation
Multiple segmentation is used to identify smaller,
better-defined target groups
Using Multiple Segmentation Bases
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Geodemographic segmentation is an example of
multivariable segmentation that divides groups
into consumer lifestyle patterns

13. Market Segmentation
Geographic
location
Economic
factors
Segmenting International markets
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Political-
legal factors
Cultural
factors

14. Market Segmentation
Intermarket segmentation divides
consumers into groups with similar needs
and buying behaviors even though they are
Segmenting Business Markets
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and buying behaviors even though they are
located in different countries

15. Market Segmentation
• To be useful, market segments must be:
Requirements for Effective Segmentation
Measurable Accessible
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Substantial Differentiable
Actionable

16. Market Targeting
• Target market consists of a set of buyers
who share common needs or
characteristics that the company decides to
Selecting Target Market Segments
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characteristics that the company decides to
serve

17. Market Targeting
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
Evaluating Market Segments
.
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• Company objectives and resources

18. Market Targeting
Target Marketing Strategies
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19. Market Targeting
Undifferentiated marketing targets the
whole market with one offer
Target Marketing Strategies
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– Mass marketing
– Focuses on common needs rather than what’s
different

20. Market Targeting
Differentiated marketing targets several
different market segments and designs
separate offers for each
Target Marketing Strategies
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separate offers for each
• Goal is to achieve higher sales and stronger
position
• More expensive than undifferentiated
marketing

21. Market Targeting
• Concentrated marketing targets a
small share of a large market
• Limited company resources
Target Market Strategies
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• Knowledge of the market
• More effective and efficient

22. Market Targeting
Micromarketing is the practice of tailoring
products and marketing programs to suit
the tastes of specific individuals and
Target Market Strategies
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the tastes of specific individuals and
locations
• Local marketing
• Individual marketing

23. Market Targeting
Local marketing involves tailoring brands
and promotion to the needs and wants of
local customer groups
Target Market Strategies
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local customer groups
• Cities
• Neighborhoods
• Stores

24. Market Targeting
Individual marketing involves tailoring
products and marketing programs to the needs
and preferences of individual customers
Target Market Strategies
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and preferences of individual customers
• Also known as:
– One-to-one marketing
– Mass customization
– Markets-of-one marketing

25. Market Targeting
Depends on:
• Company resources
• Product variability
Choosing a Target Market
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• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies

26. Market Targeting
• Benefits customers with specific
needs
• Concern for vulnerable segments
Socially Responsible Target Marketing
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• Concern for vulnerable segments
• Children
– Alcohol
– Cigarettes
– Internet abuses

27. Differentiation and Positioning
Product position is the way the
product is defined by consumers on
important attributes—the place the
product occupies in consumers’ minds
relative to competing products
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relative to competing products
– Perceptions
– Impressions
– Feelings

28. Differentiation and Positioning
Positioning maps
show consumer
perceptions of
their brands
versus competing
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versus competing
products on
important buying
dimensions

29. Differentiation and Positioning
• Identifying a set of possible competitive
advantages to build a position
Choosing a Differentiation and Positioning
Strategy
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advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
• Developing a positioning statement

30. Differentiation and Positioning
Competitive advantage is an advantage over
competitors gained by offering consumers
greater value, either through lower prices or
Identifying Possible Value Differences and
Competitive Advantages
Chapter 7- slide 30Copyright © 2010 Pearson Education, Inc.
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greater value, either through lower prices or
by providing more benefits that justify higher
prices

31. Differentiation and Positioning
Identifying a set of possible competitive
advantages to build a position by
providing superior value from:
Choosing a Differentiation and Positioning
Strategy
Chapter 7- slide 31Copyright © 2010 Pearson Education, Inc.
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Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation

32. Differentiation and Positioning
Difference to promote should be:
Choosing the Right Competitive Advantage
Important Distinctive Superior
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Communicable Preemptive Affordable
Profitable

33. Differentiation and Positioning
Value proposition
is the full mix of
Selecting an Overall Positioning Strategy
Chapter 7- slide 33Copyright © 2010 Pearson Education, Inc.
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is the full mix of
benefits upon
which a brand is
positioned

34. Communication and Delivering the
Chosen Position
Choosing the positioning is often easier
than implementing the position.
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