Customer value-driven marketing strategy

– Identifying which customers to serve – Determining a value proposition • Market segmentation and market targeting • Differentiating the market offering • Positioning in the minds of target customers • Right relationships with the right customer

Geographic segmentation

Dividing a market into different geographical units – Such as nations, states, regions, counties, cities, or neighborhoods

Demographic segmentation

Dividing a market into segments based on variables – Such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

Psychographic Segmentation

• Marketers segment their markets using variables such as – Social class – Lifestyle – Personality characteristics • The products people buy reflect their lifestyle

Behavioral Segmentation

User status: Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users. • Usage rate: Markets can be segmented into light, medium, and heavy product users. • Loyalty status: Consumers can be loyal to brands, stores, and companies

Occasion segmentation:

Segments divided according to occasions, when the buyers – Get the idea to buy – Make their purchase – Use the purchased item

Benefit segmentation

Segments divided according to the different benefits that consumers seek from the product

Multiple Segmentation Bases

Segmentation bases help companies to – Identify smaller, better-defined target groups – Identify and understand key customer segments – Reach customers more efficiently by tailoring market offerings and messages to customers’ specific needs • Segmentation systems help marketers segment people and locations into marketable groups of like-minded consumers.

Segmenting Business Markets

Consumer and business markets use many of the same variables for segmentation. • Variables used by business marketers for segmentation include – Operating characteristics – Purchasing approaches – Situational factors – Personal characteristics

Segmenting International Markets

Variables include – Geographic location – Economic factors – Political and legal factors – Cultural factors • Intermarket (cross-market) segmentation: Grouping consumers with similar needs and buying behaviors irrespective of their location

intermarket (cross-market) segmentation

Grouping consumers with similar needs and buying behaviors irrespective of their location

Requirements for Effective Segmentation

Measurable • Accessible • Substantial • Differentiable • Actionable

Market Targeting

Evaluating the various segments based on – Segment size and growth – Segment structural attractiveness – Company objectives and resources • Selecting target market segments – Target market: Set of buyers sharing common needs or characteristics that the company decides to serve

Target market

Set of buyers sharing common needs or characteristics that the company decides to serve

Choosing a Targeting Strategy

Factors to consider – Company resources – Product variability – Product’s life-cycle stage – Market variability – Competitors’ marketing strategies

Socially Responsible Target Marketing

Controversy and concern of target marketing – Vulnerable or disadvantaged consumers are targeted with controversial or potentially harmful products. • Socially responsible target marketing should be done to serve both the interests of the company and the interests of those targeted

Differentiation and Positioning

• Firms must decide which segments to target and on the value proposition. • Product position is the way a product is defined by consumers on important attributes

Product position

is the way a product is defined by consumers on important attributes

Choosing a Differentiation and Positioning Strategy

Identifying a Set of Differentiating Competitive Advantages Choosing the Right Competitive Advantages Selecting an Overall Positioning Strategy

Identifying Possible Value Differences

Firms can differentiate in terms of product, services, channels, people, or image

Competitive advantage

An advantage over competitors gained by offering greater customer value either by – Having lower prices, or – Providing more benefits that justify higher priceChoosing

Choosing the Right Competitive Advantages

Number of differences to promote • Developing a unique selling proposition (USP) for each brand and sticking to it • Positioning on more than one differentiator

Which Differences to Promote

• Important – the difference delivers a highly valued benefit • Distinctive – competitors cannot offer something similar • Superior – superior in acquisition to consumers • Communicable – must be visible to buyers • Preemptive – competitors cannot copy your product • Affordable – can afford to pay the difference • Profitable – you can offer your product profitably

Positioning statement

Summarizes company or brand positioning

Communicating and Delivering the Chosen Position

• All the company’s marketing mix efforts must support the positioning strategy. • Maintain the position obtained through consistent performance and communication. • The product’s position should be monitored and adapted over time