Customer-Driven Marketing Strategy Creating Value for Target Customers

1. 6 Customer-Driven Marketing Strategy Creating Value for Target Customers

2. Chapter Outline • Customer-Driven Marketing Strategy • Market Segmentation • Market Targeting • Differentiation and Positioning

3. Customer-Driven Marketing Strategy

4. Market Segmentation Market segmentation involves dividing a • market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

5. Major Segmentation Variables

6. Geographic Segmentation • Geographic segmentation calls for dividing the market into different • geographical units • such as nations, • regions, states, • counties, cities, or • even neighborhoods. • McDonald in India

7. Demographic Segmentation

8. Discussion: Demographic Profile • Based on the following geographic description, what city is it? • Population: 154,147(2003), 3.1% increase from 2000 • Population under 18 years old 34.6% (State average 27.3%) • Foreign born persons: 36.7% (state average: 26.2%) • Median household income: $40,021 (State average: 47,793)

9. Psychographic Segmentation

10. Psychographic Segmentation • Lifestyle • Lifestyle segmentation divides people into groups according to the way they spend their time, the importance of the things around them, their beliefs, and socioeconomic characteristics such as income and education. • ClaritasPRIZM

11. Example of Clarita Segments • Young Digerati: Young digerati are the nation’s tech-savy singles and couples living in fashionable neighborhoods on the urban fringe. Affluent, highly educated and ethnically mixed. Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars-from juice to coffee to microbrew.

12. Example of Clarita Segments • New Beginnings: Filled with young, single adults, New Beginnings is a magnet for adults in transition. Many of its residents are twenty something singles and couples just starting out on their career paths–or starting over after recent divorces or company transfers. Ethnically diverse–with nearly half its residents Hispanic, Asian or African-American–New Beginnings households tend to have the modest living standards typical of transient apartment dwellers.

13. Example of Clarita Segments • Traditional Times is the kind of lifestyle where small-town couples nearing retirement are beginning to enjoy their first empty-nest years. Typically in their fifties and sixties, these middle-class Americans pursue a kind of granola-and-grits lifestyle. On their coffee tables are magazines with titles ranging from Country Living and Country Home to Gourmet and Forbes. But they're big travelers, especially in recreational vehicles and campers.

14. Behavioral Segmentation Occasions Benefits sought • Behavioral segmentation divides a market into segments based on consumer knowledge, attitudes, uses, or responses to a product. User Status Usage Rate Loyalty Status

15. Benefit Segmentation

16. Usage Segmentation

17. Segmenting Business and International Markets

18. Requirements for Effective Segmentation

19. Janet is married with two children. She is a college graduate with a household income of $75,000 per year. What type of segmentation variables are being used to describe Janet? Geographic Demographic Psychographic Behavioral

20. Janet is married with two children. She is a college graduate with a household income of $75,000 per year. What type of segmentation variables are being used to describe Janet? Geographic Demographic Psychographic Behavioral Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

21. To be useful, market segments must be all of the following EXCEPT: Actionable Measurable Undifferentiable Substantial To be useful, market segments must be measurable, accessible, substantial, differentiable, and actionable.

22. Outline • Targeting • Positioning

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

24. Discussion Question • A local accountant is looking to expand their services. What must they consider in the target market they choose?

25. Market TargetingEvaluating Target Segments

26. Market TargetingSelecting Target Segments

27. Undifferentiated Differentiated (segmented) Nice market Targeting Strategies

28. Differentiation and Positioning • A product’s position is the way the product is defined by consumers on important attributes – the place the product occupies in the consumer’s mind relative to competing products

29. Discussion Question • Consider all the brands of ice cream you know. How do they differ? Which is your favorite? Why?

30. Differentiation and PositioningPositioning Map

31. Differentiation and PositioningChoosing a Strategy

32. Identifying Possible Value Differencesand Competitive Advantages • Competitive advantage is an advantage over competitors gained • by offering greater • customer value, • either through lower • prices or by providing • more benefits that justify • higher prices.

33. Differentiation

34. Choosing the Right Competitive Advantages

35. Illustrations of Competitive Advantage Wal-Mart 3M Intel Honda Toyota Procter and Gamble Apple

36. Illustrations of Competitive Advantage Wal-Mart Sophisticated information management and product distribution systems 3M Product innovation Intel Design of complex semiconductors Honda Engine technology Procter and Gamble marketing-distribution skills Apple Product design

37. Selecting an Overall Positioning Strategy • The value proposition is the full positioning of a brand—the full mix of benefits upon which it is positioned. 6 - 37

38. Developing a Positioning Statement • To (target segment and need) our (brand) is (concept) that (point of difference)

39. Video Discussion: Meredith • On what main variables has Meredith focused in segmenting its markets? • Which target marketing strategy best describes Meredith’s efforts? Support your choice?

40. The way the product is defined byconsumers on important attributes—theplace the product occupies in consumers’minds relative to competing products—is known as the product’s: Position Perception Benefit Differentiation

41. The way the product is defined byconsumers on important attributes—theplace the product occupies in consumers’minds relative to competing products—is known as the product’s: Position Perception Benefit Differentiation A product’s position is the way the product is defined by consumers on important attributes.

42. A moving company’s ads stress the loving care taken when packing, loading, and unloading the client’s possessions. The competitive advantage being promoted is based on: Image differentiation  Product differentiation  Services differentiation Channel differentiation

43. A moving company’s ads stress the loving care taken when packing, loading, and unloading the client’s possessions. The competitive advantage being promoted is based on: Image differentiation  Product differentiation  Services differentiation Channel differentiation Services differentiation can be gained through speedy, convenient, or careful delivery.

44. Outline • Review STP process • Mini case analysis • Class activity three: simulation

45. Mini case 1: marketing technology • On what basis is Fisker Automotive segmenting the automobile market? • What market targeting strategy is Fisker pursuing with this automobile? • How is the company differentiating its automobile?

46. Mini case 2: Marketing and the economy • Based on the segmentation variables discussed in the class, construct a profile for vanilla Bicycle’s probable target market. • Given that most luxury products suffer in an economic downturn, why has Vanilla still succeed?

47. Class activity 3 • STP Strategy