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CHAPTER 6:

DESIGNING A CUSTOMER VALUE-DRIVEN STRATEGY

CREATING VALUE FOR TARGET CUSTOMERS

MSc. Uyen H. Nguyen

Learning Objectives

Identify Explain Discuss

Major steps in designing a Major bases for How companies
customer-driven marketing segmenting differentiate and
strategy: consumer and position their
- Market segmentation business markets. products for
maximum
- Targeting competitive
- Differentiation How companies advantage
identify attractive
- Positioning market segments
and choose a
market-targeting
strategy.

MSc. Uyen H. Nguyen

3

TODAY TRENDS IN MARKETING

STRATEGY

MASS TARGET
MARKETING MARKETING

Identifying market segments,

selecting one or more of them, and
developing products and
marketing programs tailored to
each.

MSc. Uyen H. Nguyen

Customer-Driven Marketing Strategy

MSc. Uyen H. Nguyen

MARKET SEGMENTATION

Market segmentation requires dividing a

market into smaller segments with distinct 5

needs, characteristics, or behaviours that

might require separate marketing
strategies or mixes.
Copyright © 2018 Pearson Education Ltd. All Rights Reserved.
Dove shampoo Tresemmé shampoo

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

MSc. Uyen H. Nguyen
Four important segmentation topics

Segmenting Segmenting Segmenting Requirements

consumer business international for effective
markets markets markets segmentation

MSc. Uyen H. Nguyen

Segmenting Consumer Markets

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation
 Countries/
Nations Cities/
Population Regions/
density States/
Counties
Geographic segmentation
I
Climate/
Weather Rural/
Urban
Geographic segmentation divides
GEOGRAPHIC
SEGMENTATION the market into different
geographical units such as nations,
regions, states, counties, cities, or
even neighbourhoods.
Demographic segmentation

Demographic segmentation divides

the market into segments based on
variables such as age, life-cycle
stage, gender, income, occupation,
education, religion, ethnicity, and
generation.
Demographic segmentation (cont.)

Age and life-cycle

Gender segmentation Income segmentation
stage segmentation
divides a market into different divides a market into different divides a market into different
age and life-cycle groups. segments based on gender. income segments.

MSc. Uyen H. Nguyen

Psychographic segmentation

Psychographic
segmentation
divides a market into
different segments
based on social
class, lifestyle, or
personality
characteristics. The
products people buy
reflect their lifestyles.
Psychographic Segmentation

VF Corporation offers
a closet full of more
than 30 premium
lifestyle brands.

MSc. Uyen H. Nguyen

6-14
BEHAVIOURAL SEGMENTATION
divides a market into segments based on
consumer knowledge, attitudes, uses of a product,
or responses to a product.
ü Occasions

ü Benefits sought

ü User status

ü Usage rate

ü Loyalty status
Multiple Segmentation Bases
• Segmentation bases help companies to
oIdentify smaller, better-defined target groups
oIdentify and understand key customer segments
oReach 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.

MSc. Uyen H. Nguyen

6-16
 “
Business marketers can be
segmented geographically,
demographically (industry, company
size), or by benefits sought, user
status, usage rate, and loyalty status.
Yet, business marketers also use
some additional variables. Additional
variables include:

Customer operating characteristics

Purchasing approaches
Situational factors
Personal characteristics

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Segmenting International Markets

Geographic Economic
Intermarket segmentation
location factors involves forming segments of
consumers who have similar
needs and buying behaviors
even though they are located
Political and Cultural in different countries.

legal factors factors

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Requirements for Effective Segmentation

Think
multiple
variables!
MEASURABLE ACCESSIBLE SUBSTANTIAL

•Concerned consumers
•Sun avoiders
•Sun lovers
•Careless tanners
DIFFERENTIABLE ACTIONABLE •Beauty conscious
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A MARKET – TARGETING
STRATEGY
How companies identify attractive market segments
and choose a market-targeting strategy
 Market Targeting

How to select and

What’s target market?
evaluate market
A target market is a set of
segments? buyers who share common
It can be based on: needs or characteristics that
Segment size and growth the company decides to serve.
Segment structural attractiveness
Company objectives and resources 21
Market Targeting

Figure 7.2 Market-Targeting Strategies.

MSc. Uyen H. Nguyen

 How many target markets should be selected?
23

Target marketing strategies

UNDIFFERENTIATED (MASS) Marketing The

Mix Market

Mix 1 Segment 1
DIFFERENTIATED Mix 2 Segment 2
(SEGMENTED)
Mix 3 Segment 3

CONCENTRATED (NICHE) Marketing mix Segment 2

MICRO- AND INDIVIDUAL Tailoring products and marketing

MARKETING programmes to narrowly defined segments
or individuals
MSc. Uyen H. Nguyen
 24

Undifferentiated marketing targets the

Undifferentiated
marketing whole market with one offer.
ü Mass marketing
ü Focuses on common needs rather
than what’s different
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Differentiated marketing targets several

Differentiated
marketing different market segments and designs
separate offers for each.
ü Goal is to achieve higher sales and
stronger position
ü More expensive than
undifferentiated marketing
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Concentrated marketing targets a large

Concentrated
marketing of a smaller market.
ü Limited company resources
ü Knowledge of the market
ü More effective and efficient
27

Micromarketing is the practice of

Micromarketing
tailoring products and marketing
programs to suit the tastes of specific
individuals and locations.
ü Local marketing
ü Individual marketing
Market Targeting – Individual marketing

The PUMA
Factory sneaker
customization
Web site

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Micromarketing
Local marketing involves
tailoring brands and promotion
to the needs and wants of
local customer segments.
üCities
üNeighborhoods
üStores
Individual marketing involves
tailoring products and
marketing programs to the
needs and preferences of
individual customers.
Also known as:
üOne-to-one marketing
üMass customization
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Overall, how to select target market
segments?
Choosing a targeting strategy depends on
§ Company resources
§ Product variability
§ Product life-cycle stage
§ Market variability
§ Competitor’s marketing strategies

MSc. Uyen H. Nguyen 30

 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.

Copyright © 2017 Pearson Education, Ltd. 6 - 31

DIFFERENTIATION
& POSITIONING
Discuss how companies differentiate and
position their products/services for maximum
competitive advantage.

MSc. Uyen H. Nguyen

What’s product position?

Product position is the way the product

is defined by consumers on important
attributes.

Positioning maps show consumer 3

3
perceptions of marketer’s brands versus
competing products on important buying
dimensions.

MSc. Uyen H. Nguyen

 Differentiation and Positioning

IKEA does more than

just sell affordable
home furnishings;
it’s the “Life
improvement store.”

Copyright © 2017 Pearson Education, Ltd. 6 - 34

 “
Positioning gives consumers a
reason to buy

• Positioning is the means by which

products and services can be
differentiated from each other
• Consumers can position products
without the help of marketers....
• Marketers need to plan positioning
to ensure their products have
maximum advantage in selected
target markets
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Choosing a Differentiation and Positioning
Strategy

Identifying a set of Communicating and

Selecting an
possible Choosing the right delivering the
overall
competitive competitive chosen position to
positioning
advantages to build advantages the market
strategy
a position

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.
Choosing a Differentiation and
Positioning Strategy

▹Identifying a set of
possible competitive
advantages to 38
differentiate along the
lines of:
v Products
v Services
v Channels
v People
v Image
MSc. Uyen H. Nguyen
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

MSc. Uyen H. Nguyen

6-39
A COMPETITIVE
ADVANTAGE IMPORTANT DISTINCTIVE SUPERIOR
should be

COMMERCIALS PREEMPTIVE AFFORDABLE

PROFITABLE

MSc. Uyen H. Nguyen

VALUE PROPOSITION

Value proposition is the full mix of

benefits upon which a brand is
positioned.

MSc. Uyen H. Nguyen

 Winning Value Propositions
Value proposition Description
More for more • Provides the most upscale product or service

More for the same • High quality at lower prices

More for less • Best winning proposition

The same for less • Gives a good deal

Less for much less • Meeting consumers’ lower performance or
quality requirements at a lower price

6-42
Summarise brand positioning with a positioning statement

• Useful during NPD (new-product development) process

• Format: To (target segment and need) our (brand) is
(concept) that (point of difference)

“To young, active soft-drink consumers who have

little time for sleep, Mountain Dew is the soft
drink that gives you more energy than any other
brand because it has the highest level of
caffeine”
09/03/2021
MSc. Uyen H.Nguyen

Reminder: Perceptual Mapping

Superstores
Waitrose
Asda
Safeway

Sainsbury
Aldi
Kwik Save
Tesco
Discount Speciality
Co-op
Netto Spar

Neighbourhood

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Communicating and Delivering the Chosen Position

§ Choosing 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.
• Company must be able to deliver
the positioning
• Not just about communication: All of
the marketing mix must support the
positioning strategy
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Assignment

Each group will:

1) Explain and provide examples for each
possible value propositions on which a
company might position its products. Then
identify your best approach and explain
why.
2) Draw your perceptual mapping for your
chosen company/brand

Please note that summarizing your brand

positioning with a positioning statement will
help you do this homework more efficiently