FUNDAMENTALS OF MARKETING

PART 2 Designing a marketing strategy and mix

Chapter 4 Creating a value-driven marketing strategy (1h30)

In marketing, it is difficult to appeal to all buyers in the marketplace because buyers are too numerous
and varied in their needs and buying practices. Indeed, young people do not have the same behavior
as retired people.

In this chapter, we are going to study the 4 major steps in designing a customer value-driven marketing
strategy. The two first steps aim to select customers to serve. The final two one consists of deciding on
a value proposition.

Document 1 the 4 steps of the marketing strategy

The aim of the marketing strategy is to create value for targeted consumers. The two firsts steps will
select customers to serve, the 2 lasts steps decide on a value proposition.

segmentation
(dividing the market into distinct groups of buyers)

targeting
(selecting one or more market segments to serve)

differentiation
(market offering with superior customer value than competitors)

positioning
(occupying a clear, distinctive place in consumers minds)
minds)

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  List and discuss the major bases for segmenting consumer markets

There is not a single way to segment market. Here, we look at the major variables.

Segment variable examples

Geographic States, Cities, neighbourhoods, Region
Demographic Age, life-cycle stage, gender, income, education,
religion, ethnicity, generation
Psychographic Lifestyle, personality
Behavioral Occasions, benefits, user status, usage rate,
loyalty status

Document 2 Tanzanite Segmentation

Like many companies, we divide our emails into a variety of segments. One of the best performing
customer segmentation is based on the gender of the buyer. While we do not ask this of our customers,
our 3rd party email provider has an AI for this.

Vraux Jean-Pierre – Fundamentals of marketing

Being in the jewellery industry, sometimes women buy for themselves, other times it is the significant
other.

What we implemented was the segmentation of gender for all our follow up emails. If someone
purchases a ring, they get a follow up of a necklace, If they purchase a necklace, they get a follow up
with a pair of earrings.

Where the segmentation comes into place is with the content of the email. If our system thinks it is a
male, the email is more focused around giving a gift. If it thinks they are female, it is all about
purchasing a matching item for yourself.

This has increased our open rate by about 50% and has had a nice positive impact on repeat buyers.
Because of that, it’s something we will continue to use.

Source : https://survicate.com/customer-segmentation/customer-segmentation-examples/

Q1. Which variable the Tanzanite company choose to segment its market? What are the
consequences of this segmentation?

 Target attractive market segments

In order to determine if a market segment is attractive (size and growth), the company can use porter’s
five force model. For example, a segment is less attractive if competitive rivalry is high, or the power of
buyer is intense.

Document 3 market-targeting strategy

Target strategy definition

Undifferentiated (mass) marketing Target the whole market with one offer
Differentiated (segmented) marketing Target several segments and designs separate
offer
Concentrated (niche) marketing (niche marketing) : one segment chosen

Document 4 Doro mobile phone

https://www.youtube.com/watch?v=rgIYR8cKie4

Q2. Identify the target strategy in this video

 Choosing a differentiation and positioning strategy

To build profitable relationships with customers, marketers must understand customer needs and
create a differentiated value proposition. The company must as well establish the place it will occupy
in consumers’ minds relative to competing products : the product position.

Vraux Jean-Pierre – Fundamentals of marketing

Document 5 possible value proposition to gain competitive advantage

The value proposition is the full mix of benefits on which the brand is positioned.

Source : Marketing, an Introduction 14thEdition Gary Armstrong & Philip Kotler

Document 6 Rocket Mortgage

Q3. How does Rocket Mortgage differentiate from competitors? Identify the value proposition.

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Document 7 The Ryanair Experience

Q4. According to marketoonist.com, what is Ryanair value proposition?

Document 8 Brand positioning

The product position is the place that a company want to occupy in consumers ’minds relative to
competing product. Once the position chosen, the company must take strong steps to deliver and
communicate the desired position to its target consumers. The brand image is different from the brand
positioning.

 Brand image : how do consumers perceive your brand in reality (consumer perception)
 Brand positioning : how companies want to be perceived by consumers (company goal)

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Document 9 Brand’s positioning

Q5. Identify Primark brand’s positioning.

Vraux Jean-Pierre – Fundamentals of marketing