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Chapter 7- slide 1Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Chapter Seven
Customer-Driven Marketing Strategy:
Creating Value for Target Customers
Chapter 7- slide 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Customer-Driven Marketing Strategy:Creating Value for Target Customers
• Market Segmentation• Market Targeting• Differentiation and Positioning
Topic Outline
Chapter 7- slide 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Companies today recognize that they cant appeal to all buyers in the marketplace or at least not to all buyers in the same way.
• Buyers are too numerous, too widely scattered and too varied in their needs and buying practices.
• Companies vary widely in their abilities to serve different segments of the market.
Introduction
Chapter 7- slide 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• 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.
Introduction
Chapter 7- slide 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs
Market Segmentation
Chapter 7- slide 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Chapter 7- slide 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• The figure shows the four major steps in designing a customer driven marketing strategy, in the first two steps, the company selects the customer that it will serve.
• In the final two steps , the company decides on a value proposition , on how it will create value for target customers.
Market Segmentation
Chapter 7- slide 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Differentiation involves actually differentiating the firm’s market offering to create superior customer value.
• Positioning consists of arranging for a market offering to occupy a clear, distinctive and desirable place relative to the competing products in the minds of target customers.
Market Segmentation
Chapter 7- slide 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Segmenting consumer markets• Segmenting business markets• Segmenting international markets• Requirements for effective segmentation
Market Segmentation
Chapter 7- slide 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Segmenting Consumer Markets
Chapter 7- slide 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, cities or even neighborhoods.
• A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants.
Segmenting Consumer Markets
Chapter 7- slide 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Many companies today are localizing their products, advertising, promotion and sales effort to fit the needs of individual regions, cities, and even neighborhoods.
• For example :one consumer products company ships additional cases of low calorie snack food to stores in neighborhoods near(weight loss) clinics
Segmenting Consumer Markets
Chapter 7- slide 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
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
Segmenting Consumer Markets
Chapter 7- slide 14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs , wants, and usage rates often vary closely with demographic variables, another reason is that demographics variables are easier to measure than most other types of the variables.
Segmenting Consumer Markets
Chapter 7- slide 15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Marketers first define segments using other bases such as benefits sought or behavior, they must know segment demographic characteristics in order to assess the size of the target market and to reach it efficiently.
Segmenting Consumer Markets
Chapter 7- slide 16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups
Gender segmentation divides the market based on sex (male or female)
Chapter 7- slide 17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Gender segmentation has been long used in clothing , cosmetics and magazines.
• Many women’s cosmetics makers have begun marketing men’s lines.
• Nivea markets Nivea for men “ an advance line of enriching skincare and soothing aftershave products specially designed for the active, healthy men’s lifestyle”
Market Segmentation
Chapter 7- slide 18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• A neglected gender segment can offer new opportunities in markets ranging from
motorcycles to Guitars
Market Segmentation
Chapter 7- slide 19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Marketers of products and services such as clothing, financial services and travel have long used income segmentation
Income segmentation divides the market into affluent or low-income consumers
Segmenting Consumer Markets
Chapter 7- slide 20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Many companies target affluent consumers with luxury goods and convenience services.
• For example: luxury hotels provide amenities to attract specific groups of affluent travelers such as families.
Segmenting Consumer Markets
Chapter 7- slide 21Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• However, not all the companies that use income segmentation target the affluent.
• For example: when experts scout locations for new pound and dollar stores, they look for lower-middle class neighborhoods where people wear less expensive shoes and drive old cars that drip a lot of oil.
Segmenting Consumer Markets
Chapter 7- slide 22Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits
• Marketers often segment their markets by consumer lifestyles and base their marketing strategies on lifestyle appeals.
Segmenting Consumer Markets
Chapter 7- slide 23Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product
Many marketers believe that behavioral variables are the best starting point for building market segments.
Segmenting Consumer Markets
Chapter 7- slide 24Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• Occasions• Benefits sought• User status• Usage rate• Loyalty status
Segmenting Consumer Markets
Chapter 7- slide 25Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Buyers can be grouped according to the occasions when they get the idea to buy, actually make their purchase, or use the purchased item.
• Occasion segmentation can help firms build up product usage
• For example, most consumers drink orange juice in the morning but orange growers have promoted drinking orange juice as a cool refresher at other times of the day.
Occasions
Chapter 7- slide 26Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Some holidays such as the mother’s day was originally promoted partly to increase the sale of candy, flowers, cards and other gifts.
• Many marketers prepare special offers and ads for holiday occasions.
Occasions
Chapter 7- slide 27Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• A powerful form of segmentation is to group buyers according to the different benefits that they seek from the product
• Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.
Benefits Sought
Chapter 7- slide 28Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• For example: Champion athletic wear segments its markets according to the benefits that different consumers seek from their active wear , consumers seek a balance between function and style.
Benefits Sought
Chapter 7- slide 29Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Markets can be segmented into nonusers, ex-users , potential users, first time users and regular users of the product
• Marketers want to reinforce and retain regular users, attract targeted nonusers , and reinvigorate relationships with exusers.
• Included in the potential user group are consumers facing life- stage changes such as new parents
User status
Chapter 7- slide 30Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Markets can also be segmented into light , medium , and heavy product users.
• Heavy users are often a small percentage of the market but account for a high percentage of total consumption
• For example : Burger king targets what it calls “ super fans”, they eat at burger king an average of 16 times a month
Usage Rate
Chapter 7- slide 31Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• A market can also be segmented by consumer loyalty.
• Consumers can be loyal to brands , stores , and companies
• Buyers can be divided into groups according to their degree of loyalty
• Some consumers are completely loyal, they buy one brand all the time.
Loyalty status
Chapter 7- slide 32Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Other consumers are somewhat loyal , they are loyal to two or three brands of a given product or favor one product while sometimes buying others.
• Still other buyers show no loyalty to any brand. They either want something different each time they buy or they buy whatever’s on sale.
Loyalty status
Chapter 7- slide 33Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• A company can learn a lot by analyzing loyalty patterns in its market
• Studying less loyal buyers, the company can detect which brands are most competitive with its own
• By looking at customers who are shifting away from its brand, the company can learn about its marketing weakness.
Conclusion
Chapter 7- slide 34Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Multiple segmentation:Marketers rarely limit their segmentation analysis to
one or a few variables. Rather , they often use multiple segmentation bases in an effort to identify smaller, better defined target groups
* Several business information services provide multivariable segmentation systems that merge geographic, demographic , lifestyle and behavioral data to help in segmenting the markets
Using Multiple Segmentation Bases
Chapter 7- slide 35Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Geodemographic segmentation is an example of multivariable segmentation that divides groups into consumer lifestyle patterns
Market Segmentation
Chapter 7- slide 36Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
PRIZM NE classifies every American household into 66 unique segments organized into 14 different social groups.
• These groups segment people and locations into marketable groups of like-minded consumers that exhibit unique characteristics and buying behavior based on a host of demographic factors
Using Multiple Segmentation Bases
Chapter 7- slide 37Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Consumer and business marketers use many of the same variables to segment their markets.
• Business buyers can be segmented geographically, demographically or by benefits sought, user status, usage rate, and loyalty status.
Segmenting business markets
Chapter 7- slide 38Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Business marketers also use some additional variables such as customer , operating characteristics, purchasing approaches, situational factors, and personal characteristics.
• By going after segments instead of the whole market, companies can deliver just the right value proposition to each segment served and capture more value in return.
Segmenting business markets
Chapter 7- slide 39Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following is not a way to segment consumer markets?1. Geographic 2. Psychographic 3. Demographic 4. Derived demand
Chapter 7- slide 40Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following is not a way to segment consumer markets?1. Geographic 2. Psychographic 3. Demographic 4. Derived demand
Chapter 7- slide 41Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Dividing a market based on consumer attitude, use, or response to a product is called ________ segmentation.1. occasion2. psychographic3. behavioral4. market
Chapter 7- slide 42Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Dividing a market based on consumer attitude, use, or response to a product is called ________ segmentation.1. occasion2. psychographic3. behavioral4. market
Chapter 7- slide 43Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A marketer selling different offerings in different communities would be using ________ segmentation.1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 44Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A marketer selling different offerings in different communities would be using ________ segmentation.1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 45Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Marketers selling luxury cars often use income as a segmenting variable. Income is one component of ________ segmentation. 1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 46Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Marketers selling luxury cars often use income as a segmenting variable. Income is one component of ________ segmentation. 1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 47Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Many marketers believe that ________ variables are the best starting point for building market segments. 1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 48Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Many marketers believe that ________ variables are the best starting point for building market segments. 1. geographic 2. psychographic 3. demographic 4. behavioral
Chapter 7- slide 49Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Segmenting International markets
Chapter 7- slide 50Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Few companies have either the resources or the will to operate in all , or even most, of the countries that dot the globe, although some large companies sell products in more than 200 countries such as ( Coca- Cola)
• Operating in many countries presents new challenges.
Segmenting international markets
Chapter 7- slide 51Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Different countries, even those that are closer together, can vary greatly in their economic, cultural, and political make up.
• 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
Segmenting international markets
Chapter 7- slide 52Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Marketers can segment the market by the geographic location, grouping countries by regions such as Western Europe, Pacific Rim, the Middle East or Africa .
• Geographic segmentation assumes that nations close to one another will have many common traits and behaviors
Segmenting international markets
Chapter 7- slide 53Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• World markets can also be segmented on the basis of economic factors . For example countries might be grouped by population income levels or by their overall level of economic development.
• A country’s economic structure shapes its population’s product and service needs, and therefore, the marketing opportunities it offers
Segmenting international markets
Chapter 7- slide 54Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Countries can be segmented by political and legal factors such as the type and stability of government, monetary regulations and the amount of bureaucracy.
• Cultural factors can also be used, grouping markets according to the common languages, religions, values and attitudes.
Segmenting international markets
Chapter 7- slide 55Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries.
Coca cola is the official sponsor of American Idol, the country’s no.1 television show. In the Middle East commercial features Arab pop star such as Nancy Ajram
Segmenting Business Markets
Chapter 7- slide 56Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Mercedes Benz targets the world’s well-to-do and IKEA targets the aspiring global middle class. These companies are involved with ________ segmentation.1. positioning2. differentiation3. intermarket4. lifecycle
Chapter 7- slide 57Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Mercedes Benz targets the world’s well-to-do and IKEA targets the aspiring global middle class. These companies are involved with ________ segmentation.1. positioning2. differentiation3. intermarket4. lifecycle
Chapter 7- slide 58Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Segmentation
• To be useful, market segments must be:
Requirements for Effective Segmentation
Chapter 7- slide 59Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Measurable: the size, purchasing power, and profiles of the segments can be measured, certain segmentation variables are difficult to measure.
• For example: there are many left handed people in the world, yet few products are targeted toward them. The main problem maybe that the segment is hard to identify and measure.
Requirements for Effective Segmentation
Chapter 7- slide 60Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Accessible : the market segments can be effectively reached and served.
• For example : a fragrance company finds that heavy users of its brand are single men and women who stay out late and socialize a lot. Unless this group shops at certain places and is exposed to certain media, it members will be difficult to reach.
Requirements for Effective Segmentation
Chapter 7- slide 61Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Substantial: the market segments are large or profitable enough to serve. A segment should be the largest possible homogenous group worth pursuing with a tailored marketing program
• For example: for an automobile manufacturer to develop cars especially for people whose height is greater than 7 feet
Requirements for Effective Segmentation
Chapter 7- slide 62Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Differentiable : the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs
• For example : if married and unmarried women respond similarly to a sale on perfume, they don’t constitute separate segments.
Requirements for Effective Segmentation
Chapter 7- slide 63Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• 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.
Requirements for Effective Segmentation
Chapter 7- slide 64Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
In order to be useful, market segments need to be which of the following? 1. Differentiable2. Accessible3. Substantial4. All of the above
Chapter 7- slide 65Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
In order to be useful, market segments need to be which of the following? 1. Differentiable2. Accessible3. Substantial4. All of the above
Chapter 7- slide 66Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
• Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve
• Market segmentation reveals the firm’s market segment opportunities.
• The firm has to evaluate the various segments and decide how many and which segments it can serve best.
Selecting Target Market Segments
Chapter 7- slide 67Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
• In evaluating different market segments, a firm must look at three factors:
1.Segment size and growth2.Segment structural attractiveness3.Company objectives and resources
Evaluating Market Segments
Chapter 7- slide 68Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• The company must first collect and analyze data on current segment sales, growth rates and expected profitability for various segments, the firm will be interested in segments that have the right size and growth characteristics.
Evaluating Market Segments
Chapter 7- slide 69Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Evaluating Market Segments
• “ Right size and growth “ is a relative matter. The largest, fastest growing segments are not always the most attractive ones for every company.
• Smaller companies may lack the skills and resources needed to serve the larger segments, or they may find these segments too competitive.
1. Segment size and Growth
Chapter 7- slide 70Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Evaluating Market Segments
• Such companies may target segments that are smaller and less attractive, in an absolute sense, but that are more profitable for them
1. Segment size and Growth
Chapter 7- slide 71Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Evaluating Market Segments
• The company also needs to examine major structural factors that affect long run segment attractiveness.
• For example , the segment is less attractive if it already contains many strong and aggressive competitors
• The existence of many actual or potential substitute products may limit prices and the profit that can be earned in a segment
2. Segment structural attractiveness
Chapter 7- slide 72Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Evaluating Market Segments
• The power of buyers affects segment attractiveness, buyers with strong bargaining power relative to sellers will try to force prices down, demand more services and set competitors against one another
• A segment may be less attractive if it contains powerful suppliers who can control prices or reduce the quality/quantity of ordered goods and services
2. Segment structural attractiveness
Chapter 7- slide 73Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Evaluating Market Segments
• Some attractive segments can be dismissed quickly because they don’t mesh with the company’s long run objectives, or the company may lack the resources and skills needed to succeed in an attractive segment.
• A company should enter only segments in which it can create superior customer value
3.Company objectives and resources
Chapter 7- slide 74Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following structural factors is not related to a segment’s attractiveness? 1. The presence of strong competitors in the
segment.2. The existence of potential substitute products.3. The lack of raw materials.4. A number of powerful suppliers.
Chapter 7- slide 75Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following structural factors is not related to a segment’s attractiveness? 1. The presence of strong competitors in the
segment.2. The existence of potential substitute products.3. The lack of raw materials.4. A number of powerful suppliers.
Chapter 7- slide 76Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market TargetingTarget Marketing Strategies
Chapter 7- slide 77Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
Undifferentiated: marketing targets the whole market with one offer– Mass marketing– Focuses on common needs rather than what’s
different– The company designs a product and a
marketing program that will appeal to the largest numbers of buyers
Undifferentiated marketing
Chapter 7- slide 78Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
• Most modern marketers have strong doubts about this strategy
• Difficulties arise in developing a product or brand that will satisfy all consumers.
• Moreover, mass marketers often have trouble competing with more focused firms that do a better job of satisfying the needs of specific segments and niche.
Undifferentiated marketing
Chapter 7- slide 79Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
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
Chapter 7- slide 80Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
When using a(n) ________ marketing (mass-marketing) strategy, a firm decides to ignore market segment differences and target the whole market with one offer.1. differentiated2. undifferentiated 3. positioning4. segmentation
Chapter 7- slide 81Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
When using a(n) _____ marketing (mass-marketing) strategy, a firm decides to ignore market segment differences and target the whole market with one offer.1. differentiated2. undifferentiated 3. positioning4. segmentation
Chapter 7- slide 82Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
• Concentrated marketing targets a small share of a large market
• Limited company resources• Knowledge of the market• More effective and efficient
Target Market Strategies
Chapter 7- slide 83Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Marketing Targeting
Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
• Local marketing• Individual marketing
Target Market Strategies
Chapter 7- slide 84Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups
• Cities• Neighborhoods• Stores
Target Market Strategies
Chapter 7- slide 85Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers
• Also known as:– One-to-one marketing– Mass customization– Markets-of-one marketing
Target Market Strategies
Chapter 7- slide 86Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
This type of micromarketing is also known as one-to-one marketing or mass customization.1. Local marketing2. Tailored marketing3. Niche marketing4. Individual marketing
Chapter 7- slide 87Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
This type of micromarketing is also known as one-to-one marketing or mass customization.1. Local marketing2. Tailored marketing3. Niche marketing4. Individual marketing
Chapter 7- slide 88Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
Depends on:• Company resources• Product variability• Product life-cycle stage• Market variability• Competitor’s marketing strategies
Choosing a Target Market
Chapter 7- slide 89Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Market Targeting
• Benefits customers with specific needs
• Concern for vulnerable segments
• Children– Alcohol– Cigarettes– Internet abuses
Socially Responsible Target Marketing
Chapter 7- slide 90Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
If a beer manufacturer were to place a commercial on a TV show that was predominantly viewed by children, it could be considered using ________. 1. socially irresponsible targeting2. socially responsible targeting3. adult targeting4. niche targeting
Chapter 7- slide 91Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
If a beer manufacturer were to place a commercial on a TV show that was predominantly viewed by children, it could be considered using ________ .1. socially irresponsible targeting2. socially responsible targeting3. adult targeting4. niche targeting
Chapter 7- slide 92Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
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
– Perceptions– Impressions– Feelings
Chapter 7- slide 93Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions
Chapter 7- slide 94Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
• Identifying a set of possible competitive advantages to build a position
• Choosing the right competitive advantages• Selecting an overall positioning strategy• Developing a positioning statement
Choosing a Differentiation and Positioning Strategy
Chapter 7- slide 95Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A product’s ________ is the way the product is defined by consumers on important attributes relative to the competition.1. image2. equity3. position4. value
Chapter 7- slide 96Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A product’s ________ is the way the product is defined by consumers on important attributes relative to the competition.1. image2. equity3. position4. value
Chapter 7- slide 97Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
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
Identifying Possible Value Differences and Competitive Advantage
Chapter 7- slide 98Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
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 99Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A firm that practices ________ differentiation gains competitive advantage by the way it designs its channel coverage.1. services2. product3. people4. channel
Chapter 7- slide 100Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
A firm that practices ________ differentiation gains competitive advantage by the way it designs its channel coverage.1. services2. product3. people4. channel
Chapter 7- slide 101Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
Difference to promote should be:
Choosing the Right Competitive Advantage
Chapter 7- slide 102Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Important : the difference delivered a high valued benefit to target buyers
• Distinctive: competitors don’t 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
Differentiation and Positioning
Chapter 7- slide 103Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Communicable : the difference is visible to buyers
• Preemptive: competitors cant easily copy the difference
• Affordable: buyers can afford to pay for differences
• Profitable: the company can introduce the difference profitably
Differentiation and Positioning
Chapter 7- slide 104Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
Value proposition is the full mix of benefits upon which a brand is positioned
Selecting an Overall Positioning Strategy
Chapter 7- slide 105Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Differentiation and Positioning
• To (target segment and need) our (brand) is (concept) that (point of difference)
Developing a Positioning Statement
Web link
Chapter 7- slide 106Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Communication and Delivering the Chosen Position
Choosing the positioning is often easier than implementing the position.
Chapter 7- slide 107Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What is the first step in target marketing?1. Market positioning2. Market segmentation3. Target marketing 4. None of the above
Chapter 7- slide 108Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What is the first step in target marketing?1. Market positioning2. Market segmentation3. Target marketing 4. None of the above
Chapter 7- slide 109Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following steps of target marketing takes into account competitors’ offerings to the market?1. Market positioning2. Market segmentation3. Market targeting4. All of the above
Chapter 7- slide 110Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Which of the following steps of target marketing takes into account competitors’ offerings to the market?1. Market positioning2. Market segmentation3. Market targeting4. All of the above
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