Designing Customer Value-Driven Marketing Strategies

School

Amjad Ali Khan College Of Business Admn**We aren't endorsed by this school

Course

AD 3

Subject

Marketing

Date

Dec 10, 2024

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Uploaded by GrandBoulderLobster26

Principles of MarketingNineteenth Edition, Global EditionChapter 7Customer Value–Driven Marketing Strategy: Creating Value for Target CustomersCopyright © 2024 Pearson Education Ltd. All Rights Reserved.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objectives7.1Define the major steps in designing a customer value-driven marketing strategy: market segmentation, targeting, differentiation, and positioning.7.2Discuss the major bases for segmenting consumer and business markets.7.3Explain how companies identify attractive market segments and choose a market-targeting strategy.7.4Discuss how companies differentiate and position their products for maximum competitive advantage.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. FACEBOOK (META): Targeting the Diverse Needs of Different Social Media SegmentsThanks to successful segmentation and targeting, Facebook/Meta’s four huge social media platforms—Facebook, Instagram, WhatsApp, and Messenger—now constitute four or the world’s top five social media brands. rvlsoft/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objective 1Define the major steps in designing a customer value-driven marketing strategy: market segmentation, targeting, differentiation, and positioning.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (1 of 14)Market segmentationrequires dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (2 of 14)•Segmenting consumer markets•Segmenting business markets•Segmenting international markets•Requirements for effective segmentation

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (3 of 14)Segmenting Consumer Markets•Geographic segmentation•Demographic segmentation•Psychographic segmentation•Behavioral segmentation

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (4 of 14)Segmenting Consumer MarketsGeographic segmentation divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (5 of 14)Segmenting Consumer MarketsDemographic segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (6 of 14)Segmenting Consumer MarketsPsychographic segmentation divides a market into different segments based on social class, lifestyle, or personality characteristics.Hyperlocal social marketing: Mazda uses personalized ads for customers within a certain radius of a dealer.Car Collection/Alamy Stock Photo

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (7 of 14)Segmenting Consumer MarketsAge and life-cycle stage segmentationdivides a market into different age and life-cycle groups.Gender segmentationdivides a market into different segments based on gender.Income segmentationdivides a market into different income segments.Gender segmentation: Toy company L E G O Group announced recently that it will work harder to remove gender stereotypes from its products and marketing.Creativa Images/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (8 of 14)Segmenting Consumer MarketsBehavioral segmentation divides a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product.Lifestyle segmentation: Rocky Mountain Tiny Houses caters to the “tiny house” lifestyle segment of consumers seeking “a place of pride and comfort, yet one of simplicity and affordability.” “Live Simply,” advises the company.p p a/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (9 of 14)Segmenting Consumer MarketsBehavioral Segmentation •Occasions•Benefits sought•User status•Usage rate•Loyalty statusBenefit 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.”Used with permission of Pacific Cycle Inc

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (10 of 14)Segmenting Consumer MarketsMultiple segmentation is used to identify smaller, better-defined target groups.Experian’s Mosaic U S A system classifies U.S. households into one of 71 lifestyle segments and 19 levels of affluence.Using Acxiom’s Personicx segmentation system, marketers can paint a surprisingly precise picture of who you are and what you buy. Personicx clusters carry such colorful names as “Skyboxes and Suburbans,” “Shooting Stars,” “Soccer and S U V s,” “Raisin’ Grandkids,” “Truckin’ and Stylin’,” Pennywise Mortgagees,” and “Cartoons and Carpools.”Acxiom Corporation

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (11 of 14)Segmenting Business MarketsConsumer 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

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (12 of 14)Segmenting International Markets•Geographic location•Economic factors•Political and legal factors •Cultural factors

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Segmentation (13 of 14)Segmenting International MarketsIntermarket segmentation involves forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries.Intermarket segmentation: Today’s technologies let fast-fashion retailer Zara target like-minded style conscious but value-seeking consumers anywhere in the world they live.Eyal Dayan Photography

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (1 of 10)Evaluating Market Segments•Segment size and growth•Segment structural attractiveness•Company objectives and resources

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (2 of 10)Selecting Target Market SegmentsAtarget market is a set of buyers who share common needs or characteristics that the company decides to serve.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (4 of 10)Selecting Target Market SegmentsUndifferentiated marketing targets the whole market with one offer.•Mass marketing•Focuses on common needs rather than what’s different

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (5 of 10)Selecting Target Market SegmentsDifferentiated 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: The InterContinental Hotels Group (I H G) serves a wide range of customer segments through 16 differentiated hotel brands. It offers something for every travel segment, from the Holiday Inn (for customers looking for essentials) to Hotel Indigo (for those who want to be “part of the pulse and rhythm of a place”). atgof.co/Alamy Stock Photo; Radharc Images/Alamy Stock Photo

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (6 of 10)Selecting Target MarketsConcentrated marketing targets a large share of a smaller market.•Limited company resources•Knowledge of the market•More effective and efficientConcentrated marketing: Apparel company American Giant has grown explosively in its back-to-basics, made-in-America niche.David Paul Morris/Bloomberg via Getty Images

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (7 of 10)Selecting Target Market SegmentsMicromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.•Local marketing•Individual marketing

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (8 of 10)Selecting Target Market SegmentsLocal marketing involves tailoring brands and promotion to the needs and wants of local customer segments.•Cities•Neighborhoods•StoresLocal marketing: The Kroger app personalizes and optimizes the customer’s experience in a preferred local store. Its Google Maps pickup service shares a pick-up customer’s estimated time of arrival with the store so orders are ready for handover just when the customer arrives at the store.Koshiro K/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (9 of 10)Selecting Target MarketsIndividual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers.Also known as:•One-to-one marketing•Mass customizationIndividual marketing: Based on images submitted by a customer using its smartphone app, FitMyFoot 3-D prints footwear that fits that customer and no one else.FitMyFoot

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Market Targeting (10 of 10)Selecting Target Market SegmentsChoosing a targeting strategy depends on•Company resources•Product variability•Product life-cycle stage•Market variability•Competitor’s marketing strategiesSocially responsible targeting: In this era of increased social responsibility, marketers must consider not just whether targeted consumers buy and like their products but also whether they use them wisely.Cagkan Sayin/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (1 of 9)Product positionis the way the product is defined by consumers on important attributes.Positioning: Spotify does more than just stream music. It gives you “Music for every mood.”rafapress/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (2 of 9)Positioning maps show consumer perceptions of marketer’s brands versus competing products on important buying dimensions.Figure 7.3Positioning Map: Large Luxury S U V srafapress/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (3 of 9)Choosing a Differentiation and Positioning Strategy•Identifying a set of possible competitive advantages to build a position•Choosing the right competitive advantages•Selecting an overall positioning strategy•Communicating and delivering the chosen position to the market

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (4 of 9)Choosing a Differentiation and Positioning StrategyCompetitive 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.

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (5 of 9)Choosing a Differentiation and Positioning StrategyIdentifying a set of possible competitive advantages to differentiate along the lines of:•Product•Services•Channels•People•ImagePositioning 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.anzheni/Shutterstock

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (6 of 9)Choosing a Differentiation and Positioning StrategyA competitive advantage should be: •Important•Distinctive•Superior•Communicable•Preemptive•Affordable•Profitable

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (7 of 9)Choosing a Differentiation and Positioning StrategyValue proposition is the full mix of benefits upon which a brand is positioned.Figure 7.4 Possible Value Propositions

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (8 of 9)Choosing a Differentiation and Positioning StrategyPositioning 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.Courtesy of Public Goods

Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning (9 of 9)Communicating and Delivering the Chosen PositionChoosing 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.