DESIGNING A CUSTOMER- DRIVEN  Family life cycle

MARKETING STRATEGY  income

STDP  occupation
Segmentation  Education
> the process of dividing a company's target  race
market into groups of potential customers with  religion
similar needs and behaviors.  generation
 nationality
Targeting
> Evaluate potential and commercial Most popular bases for segmenting
attractiveness of each segments customer groups like meeds, wants, and usage
> select one or more segments often vary by demographics
Easier to measure than most other types
Differentiation of variables
> crafting unique products and services to
attract and retain customers.  Age and life-cycle stage
> addresses the fact that consumer needs and
Positioning wants change with age
> Develop detailed product positioning for > avoid stereotypes in promotions based on
selected segments age
> Develop a marketing mix for each selected > promote positive messages when when
segment marketing to mature consumers

MARKET SEGMENTATION  Gender

> neglected gender segments can offer new
SEGMENTATION opportunities (HARLEY DAVIDSON &
> Dividing a market into smaller segments WOMEN)
with distinct needs, characteristics, or
behaviors that might require separate  Income
marketing strategies or mixes. > identifies and targets the affluent for luxury
goods
KEY VARIABLES: GDPB > people with low annual incomes can be a
1. Geographic NRSCCN lucrative (profitable or advantageous) market
 Nations > troubled economy makes marketing to all
 Region of a country income groups a challenge
 States
 Counties 3. Psychographic segmentation
 Cities > Dividing a market into different groups
 Neighborhoods based on social class, lifestyle or personality
characteristics
2. Demographic AGFFIOERRGN
 Age 4. Behavioral segmentation OBUUL
 gender Dividing markets into groups based on
 family size consumer knowledge, attitudes, uses or
responses to a product
 Occasion segmentation
 Benefits sought
 User status
 User rate
 Loyalty status
 Occasion segmentation
> special promotions and labels for
holidays
> special products for special occasions
 Benefits sought
> different segments desire different
benefits from products
 User status
> non users, ex-users, potential users,
first-time users, regular users
 User rate
> light, medium, heavy
 Loyalty status
> brands, stores, companies
> divide into groups by degree of
loyalty
“ No single way to segment is the best.
Variables are often combined to better define
segments.”
“ Best to use multiple segmentation bases in
order to identify smaller, better-defined target
groups”
> start with single base and then expand to
other bases
> PRIZM NE segmentation
PRIZM NE segmentation
> Multivariable segmentation system
> Developed by Claritas, Inc.
> Refers to the collection of geo-demographic
segmentation
> Segmentation system that harnesses the
power of both household and geographic level
data
> “Potential Rating Index for Zip Markets”
> Based on US census data
> Classified US households into 66 clusters
or segments within 14 different social groups
US HOUSEHOLDS
66 clusters
12 different social groups
SEGMENTING BUSINESS MARKETS
CONSUMER AND BUSINESS MARKETS
> use many of the same variables for
segmentation
BUSINESS MARKETS
> use: OPSP
 Operating characteristics
 Purchasing approaches
 Situational factors
 Personal characteristics
SEGMENTING INTERNATIONAL
MARKETS
> factors used: GEPC
 Geographic location
 Economic factors
 Political and legal factors
 Cultural factors
INTERMARKET SEGMENTATION
> forming segments of consumers who have
similar needs and buying behavior even
though they are located in different countries
REQUIREMENTS FOR EFFECTIVE
SEGMENTATION
To be useful, market segments must be:
MASDA
 Measurable  INDIVIDUAL
 Accessible MARKETING
 Substantial Tailoring products and marketing programs to
 Differentiable the meeds and preferences of individual
 Actionable customers

CHOOSING A TARGETING STRATEGY

MARKET TARGETING
> involves: ESSCSAB FACTORS TO CONSIDER: CPP
 Evaluating marketing segments:  Company resources
 Segment size  Product variability
 Segment structural attractiveness  Product’s life cycle stage
 Company resources
 Selecting target market segments: Product life cycle DIGMD
 Alternative range from 1. Development
undifferentiated marketing to 2. Introduction
micromarketing 3. Growth
 Being socially responsible 4. Maturity
5. Decline
SELECTING TARGET MARKET
SEGMENTS > developed by German economist Theodore
Levitt in 1965
4 TARGETING STRATEGIES UDCM
1. Undifferentiated (mass) marketing  Market variability
> ignores marketing segmentation  Competitors ’ marketing
strategies
2. Differentiated (segmented) marketing
> targets several segments and designs separate
offers for each other SOCIALLY RESPONSIBLE TARGETING

3. Concentrated (niche) marketing SMART TARGETING

> targets one or a couple small segments > helps both companies and consumers

4. Micromarketing (local or individual MARKETING

marketing) LI > sometimes generate controversy and concern
> tailoring products and marketing programs to when targeting: VMDT
suit the tastes of specific individuals and  Vulnerable
locations  minority
 Disadvantaged
 LOCAL MARKETING populations
Tailoring brands and promotions to the needs  Children
and wants of local customer groups ( cities,  teens
neighborhoods, specific stores) > controversy arises when an attempt is made
to profit at the expense of segments
TYPES OF DIFFERENTIATION PSCPI
DIFFERENTIATION AND 1. Product difference
POSITIONING 2. Services differentiation
3. Channels differentiation
PRODUCT’S POSITION 4. People differentiation
> the way the product is defined by consumers 5. Image differentiation
on important attributes
> the place the product occupies in consumers’ Choosing the right competitive advantage
minds relative to competing products requires selecting HOW MANY and WHICH
DIFFERENCES to promote
PERCEPTUAL POSITIONING MAPS
> can help define a brand’s position relative to UNIQUES SELLING PROPOSITION
competitors > often preferred

CHOOSING A DIFFERENTIATION AND PROMOTING MULTIPLE

POSITIONING STRATEGY DIFFERENCES
> involves: ICS > is possible
 Identifying a set of
differentiating competitive WORTHWHILE DIFFERENCES THAT
advantages on which to COULD BE PROMOTED ARE:
build a position IDSCPAP
 Choosing the right  Important
competitive advantages  Distinctive
 Selecting an overall  Superior
positioning strategy  Communicable
 Preemptive
COMPETITIVE ADVANTAGE  Affordable
> an advantage over competitors gained by  Profitable
offering greater customer value either through
lower prices or by providing more benefits that BRAND’S VALUE PROPOSITION
justify higher prices > overall or full positioning of the brand

IDENTIFYING POSSIBLE VALUE POTENTIAL VALUE PROPOSITION

DIFFERENCES AND COMPETITIVE include:
ADVANTAGES 1. More for more
> more benefits for higher price
 Key to winning target customers is to 2. More for same
understand their needs better than > more benefits for the same price
competitors do and to deliver more 3. More for less
value > more benefits for a lower price
 Finding points of differentiation 4. Same for less
requires that marketers examine the > same benefits for a lower price
entire customer experience. 5. Less for much less
> fewer benefits for much lower price

DEVELOPING A POSITIONING
STATEMENT

Format:
“To (target segment and need) our (brand) is (a
concept) that (point of difference).”

Example:
“ To busy mobile professionals who need to
always be in the loop, BlackBerry is a wireless
connectivity solution that gives an easier, more
reliable way to stay connected to data, people,
and resources while on the go.”

COMMUNICATING AND DELIVERING

THE CHOSEN POSITION

Company
> must take strong steps to deliver and
communicate the desired position to target
customers
> must monitor and adapt the position over
time to match changes in consumer needs and
competitors’ strategies

MARKETING MIX EFFORTS

> must deliver the positioning strategy