UNIT 5

CUSTOMER-DRIVEN
MARKETING STRATEGY
CREATING VALUE FOR TARGET CUSTOMERS

School of International Business-Marketing

University of Economics Ho Chi Minh City

Lecturer: Thac Dang-Van

TOPIC OUTLINE

Market Segmentation
Market Targeting
Differentiation and Positioning

Segmentation
Targeting
Positioning
(STP) 2/34
 MARKET SEGMENTATION
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

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MARKET SEGMENTATION

Segmenting Segmenting
consumer business
markets markets

Segmenting Requirements
international for effective
markets segmentation

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MARKET SEGMENTATION
Segmenting Consumer Markets

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation
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 MARKET SEGMENTATION
Segmenting Consumer Markets
 Geographic segmentation: divides the
market into different geographical units such
as nations, regions, states, counties, or cities.

Example:
Marriott International’s Renaissance
Hotels: Navigator Program

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 MARKET SEGMENTATION
Segmenting Consumer Markets

 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.

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 MARKET SEGMENTATION
Age and life-cycle stage
segmentation is the Example: Amazon’s
process of offering FreeTime Unlimited
for kids (Kindle Fire)
different products or
using different
marketing approaches
for different age and life-
cycle groups
Gender segmentation Example:
divides the market based L’Oreal’s products

on sex (male or female)

Income segmentation
divides the market into
affluent or low-income
consumers 8/34
Example: Walmart
Louis XIII Casino &
Hotels
 MARKET SEGMENTATION
Segmenting Consumer Markets
 Psychographic segmentation: divides buyers into
different groups based on social class, lifestyle, or
personality traits

Tetley’s black tea and Yogi Tea (personality)

Examples: FamilyMart (lifestyles)

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 MARKET SEGMENTATION
Segmenting Consumer Markets

 Behavioral segmentation: divides buyers

into groups based on their knowledge, attitudes,
uses, or responses to a product
 Occasions:
Example: Clothing, foods…
 Benefits sought:
Example: Toothpaste: whitening-sensitive-fresh breath-cavity protection…
 User status:
Example: Toyota car’s potential users, first-time users, regular users….
 Usage rate:
Example: Internet user: under 4G - 4G to 8G - 8G or above…
 Loyalty status: 10/34

Example: Apple’s loyalty and non loyalty consumers

 MARKET SEGMENTATION
Using Multiple Segmentation Bases

 Multiple segmentation: is used to identify smaller,

better-defined target groups
 PRIZM classifies every American household into 66
unique segments organized into 14 different social
groups

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 MARKET SEGMENTATION
Segmenting Business Markets

 Consumer and business marketers use many

of the same variables to segment their
markets.

Additional variables include:

 Customer operating characteristics
 Purchasing approaches
 Situational factors
 Personal characteristics 12/34
 MARKET SEGMENTATION

Segmenting International markets

Geographic Economic
location factors

Political- Cultural
legal factors factors 13/34
 MARKET SEGMENTATION

Requirements for Effective Segmentation

To be useful, market segments must be:

Accessible
Measurable Substantial

Differentiable
Actionable 14/34
 MARKET TARGETING
Target market: consists of a set of buyers
who share common needs or characteristics
that the company decides to serve

Target

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 MARKET TARGETING

Evaluating Market Segments

 Segment size and growth

 Segment structural attractiveness
 Company objectives and resources

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 MARKET TARGETING
Target Marketing Strategies

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 MARKET TARGETING

Target Marketing Strategies

 Undifferentiated
marketing: targets
the whole market
with one offer
 Mass marketing
 Focuses on
common needs
rather than
what’s different
 MARKET TARGETING
Target Marketing Strategies

 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

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 MARKET TARGETING
Target Market Strategies

 Concentrated marketing: targets a small

share of a large market
 Limited company resources
 Knowledge of the market
 More effective and efficient

Walmart Kroger Whole Foods

No. of stores 10,000 3,600 360
Sales 469 Billion USD 96 Billion USD 13 Billion USD
Targets Low price Low price High price
Products All categories All categories organic, natural foods
 MARKETING TARGETING
Target Market Strategies
 Micromarketing: is the practice of tailoring products and
marketing programs to suit the tastes of specific
individuals and locations.
 Local marketing: involves tailoring brands and
promotion to the needs and wants of local customer
groups (e.g., cities, neighborhoods, stores)
 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 21/34
marketing)
 MARKET TARGETING
Choosing a Targeting Strategy

Depends on:
 Company resources
 Product variability
 Product life-cycle stage
 Market variability (consumer needs…)
 Competitor’s marketing strategies

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 MARKET TARGETING
Socially Responsible Target Marketing

 Concern for vulnerable segments

 Children
 Alcohol
 Cigarettes
 Internet abuses

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 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

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 DIFFERENTIATION AND POSITIONING
Positioning Maps
 Positioning
maps show
consumer
perceptions
of their
brands
versus
competing
products on
important
buying
dimensions
DIFFERENTIATION AND POSITIONING
Choosing a Differentiation
and Positioning Strategy
Step 1: Identifying a set of possible competitive
advantages to build a position
Step 2: Choosing the right competitive
advantages
Step 3: Selecting an overall positioning strategy
Step 4: Developing a positioning statement

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DIFFERENTIATION AND POSITIONING
Choosing a Differentiation
and Positioning Strategy

Step1 : Identifying Possible Value Differences

and Competitive Advantages

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
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 DIFFERENTIATION AND POSITIONING
Choosing a Differentiation and
Positioning Strategy

Identifying a set of possible competitive advantages to

build a position by providing superior value from:

Product differentiation
Services differentiation
Channel differentiation
People differentiation
Image differentiation
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DIFFERENTIATION AND POSITIONING
Choosing a Differentiation and
Positioning Strategy

Step 2: Choosing the Right Competitive Advantages

– How many differences to promote

Gatorade

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DIFFERENTIATION AND POSITIONING
Choosing a Differentiation and
Positioning Strategy

-Which differences to promote

Important Distinctive Superior

Preemptive
Communicable Affordable
(領先性)

Profitable
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 DIFFERENTIATION AND POSITIONING
Choosing a Differentiation and
Positioning Strategy
Step 3: Selecting an Overall Positioning Strategy

Value
proposition
is the full mix
of benefits
upon which a
brand is
positioned

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 DIFFERENTIATION AND POSITIONING
Choosing a Differentiation and
Positioning Strategy
Step 4: Developing a Positioning Statement

Positioning statement: summarizes company

or brand positioning using this form: To (target
segment and need) our (brand) is (concept) that
(point of difference)
Positioning Statement Example for Evernote:
“To busy multitaskers who need help remembering things,
Evernote is a digital content management application that
makes it easy to capture and remember moments and ideas
from your everyday life using your computer, phone, tablet,
and the Web.”
 DIFFERENTIATION AND POSITIONING
Communicating and Delivering the
Chosen Position
Once it has chosen a position, the company must
take strong steps to deliver and communicate the
desired position to its target consumers. All the
company’s marketing mix efforts must support the
positioning strategy.

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THE END OF THE CHAPTER