Tunis Business School

2022 - 2023

Fundamentals of Marketing
BCOR 210

Chapter 5

Customer Driven Marketing Strategy

1-1
 Learning Goals
1. Define the three steps of target marketing: market segmentation, target
marketing, and market positioning
2. List and discuss the major bases for segmenting consumer and business
markets
3. Explain how companies identify attractive market segments and choose
a target marketing strategy
4. Discuss how companies position their products for maximum
competitive advantage in the marketplace

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 Marketing Strategy
Define the major steps in designing a customer
value–driven marketing strategy:
Market Segmentation,
Targeting,
Differentiation,
Positioning.
 Designing Customer Driven Marketing Strategy

Figure 7.1 shows the four major steps in designing a customer value–driven
marketing strategy. In the first two steps, the company selects the customers that
it will serve. In the second two steps, the comapny will choose how to serve them
Marketing strategy
Market segmentation

Involves dividing a market into distinct groups of

buyers who have different needs, characteristics, or
behaviors and who might require separate marketing
strategies or mixes.

The company identifies different ways to segment the

market and develops profiles of the resulting market
segments.
1. Segmenting Consumer Markets
Segmenting Consumer Markets
+ Geographic segmentation
Dividing a market into different geographical units like countries,
regions,….
+ Demographic segmentation
Dividing a market into segments based on such variables like age,
income, gender ….
+ Psychographic segmentation
Dividing a market into different segments based on social class;
lifestyle and personality characteristics
 Behavioral segmentation
Dividing a market into segments based on consumer knowledge, attitudes,
uses of a product, or responses to a product.
❑ Occasion segmentation : Dividing the market into segments according to
occasions when buyers get the idea to buy, actually make their purchase, or
use the purchased item.
❑ Benefit segmentation : Dividing the market into segments according to the
different benefits that consumers seek from the product.
❑ Usage rate : Markets can also be segmented into light, medium, and heavy
product users.
 Behavioral segmentation
❑ User Status : Markets can be segmented into non-users, ex-users,
potential users, first-time users, and regular users of a product.
Marketers want to reinforce and retain regular users, attract targeted
nonusers, and reinvigorate relationships with ex-users.
❑ Loyalty Status : A market can also be segmented by consumer loyalty.
Consumers can be loyal to brands (Tide), stores (Target), and companies
(Apple). Buyers can be divided into groups according to their degree of
loyalty. Some consumers are completely loyal—they buy one brand all
the time and can’t wait to tell others about it.
Geographic Mc Donald’s serves many countries with differents menu like india and arab countries

Demographic Most companies use these criteria ( cosmetics, clothing, shoes, bags….)
Psychographic Social class : Gucci
Lifestyle : Apple for innovators; hummer for experiencers
Personnality : extraverti ( coca cola) versus introverti

Behavioral Occasion : holidays; everyday like coca cola; in the morning(Kellogg’s cereal) or
evening ( tea)

Benefit : antibacterial soap (dettol) or creamy soap (Sensai) or shampoog for a variety
of reason (Volumizing; Oil reduction; Dry scalp; Damaged hair)

User status : for examples, to get new parents off to the right start, P&G makes certain
its Pampers Swaddlers are the diaper provided for newborns at most U.S. hospitals.
This segmentation is also used by Lila in tunisia

Usage rate : Heavy users are often a small percentage of the market but account for a
high percentage of total consumption like restaurant or aiplane
Discussion Question

+ Based on the car examples on the

following slide, how do car
manufacturers use the following
segments when marketing
products?
Geographic
Demographic
Psychographic
Behavioural

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 2. Segmenting Business Markets
Consumer and business marketers use many of the same
variables to segment their markets.
Business buyers 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,
such as customer operating characteristics, purchasing
approaches, situational factors, and personal
characteristics.
3. Segmenting International Markets

Companies can segment international markets

using one or a combination of several variables.
They can segment by geographic location,
grouping countries by regions such as Western
Europe, the Pacific Rim, South Asia, or Africa.
Market Segmentation:
Requirements for Effective Segmentation

Measurable • Size, purchasing power, profiles

.of segments can be measured

Accessible • Segments can be effectively

.reached and served

Substantial • Segments are large or profitable enough to

serve.

Differential • Segments must respond differently to different

marketing mix elements & programs.

Actionable • Effective programs can be designed to attract

and serve the segments.

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 Market Targeting
The firm now has to evaluate the various segments and
decide how many and which segments it can serve best.
Evaluating Market Segments
A firm must look at three factors:
Segment size and growth,
Segment structural attractiveness (porter’s 5 forces), and
Company objectives and resources.
 Selecting Target Market Segments
• Target market
A set of buyers who share common needs or characteristics that a
company decides to serve.
▪ Market Targeting Strategies
 Target Marketing Strategies
+ Undifferentiated (mass) marketing:
Market coverage strategy that ignores market segment differences and targets the
whole market with one offer
+ Differentiated (segmented) marketing:
Market coverage strategy that targets several market segments and designs separate
offers for each
+ Concentrated (niche) marketing:
Market coverage strategy in which a company pursues a large share of one or a few
submarkets
+ Micromarketing:
The practice of tailoring products and marketing programs to the needs/wants of
specific individuals and local customer groups
Includes: local marketing and individual marketing 8-18
Undifferentiated Differentiated Concentrated Micromarketing:
(mass) marketing (segmented) (niche) marketing:
marketing:

Sonede •Toyota which uses To target specific age Drugstores ( specific

differentiated group like Jennifer, stores in
Steg marketing and targets Toyzoro; neighborhood)
all segments.
Green grocer. A Or specific social
retailer of fresh •Zara offers different class bentley or Unique pieces
vegetables and fruit products for men and lanborgini handmade
women in a variety of
National tv age groups.
Choosing a Target Marketing Strategy

Considerations include:
Company resources
The degree of product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies
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 Socially Responsible Target Marketing
Smart targeting helps companies become more efficient and effective

However, target marketing sometimes generates controversy and concern. The

biggest issues usually involve the targeting of vulnerable or disadvantaged
consumers with controversial or potentially harmful products.

+ For example, over the years marketers in a wide range of industries—from

cereal, soft drinks, and fast food to toys and fashion—have been heavily
criticized for their marketing efforts directed toward children. See page 231
for examples.
 Differentiation and Positioning
Beyond deciding which segments of the
market it will target, the company must
decide on a value proposition
How it will create differentiated value for
targeted segments and
What positions it wants to occupy in those
segments.
 Positioning ( Product position)
+ The way the product is defined by consumers on
important attributes - the place the product occupies
in consumers’ minds relative to competing
products.
+ Involves implanting the brand’s unique benefits and
differentiation in the customer mind
+ Perceptual positioning maps show perceptions of
brands on important buying dimensions

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 Product Position
Exp:
✔Your Visa card is “Everywhere you want to be”
✔ Tide is “a washing miracle,” an all-purpose,
heavy-duty family detergent that gets out grime and
tough stains.
✔ Positioning: IKEA does more than just sell affordable
home furnishings: it’s the “Life improvement store.”
Positioning Maps
In planning their differentiation and positioning
strategies, marketers often prepare perceptual
positioning maps that show consumer perceptions
of their brands versus those of competing products
on important buying dimensions: price and
orientation (luxury versus performance). The size of
each circle indicates the brand’s relative market
share.
The location of each circle shows where consumers position a brand on two
orientation. The size of each circle indicates the brand’s relative market share in the segment. Thus,
Toyota's Land Cruiser is a niche brand that is perceived to be relatively affordable and more
performance oriented.
Choosing a Positioning Strategy

+ Identifying Possible + Differentiation can be based

Competitive Advantages on:
+ Choosing the right Products
competitive advantage Services
Channels
+ Selecting an Overall
People
Positioning Strategy
Image

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Choosing a Positioning Strategy
+ How many differences to
+ Identifying Possible promote?
Competitive Advantages Unique selling proposition
Several benefits
+ Choosing the right competitive
+ Which differences to promote?
advantages Criteria include:
+ Selecting an Overall Important
Positioning Strategy Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

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Which Differences to Promote.
Important: The difference delivers a highly valued benefit to target
buyers.
Distinctive:Competitors do not offer the difference, or the company can
offer it in a more distinctive way.
Superior: The difference is superior to other ways that customers might
obtain the same benefit.
Communicable. The difference is communicable and visible to
buyers.
Preemptive. Competitors cannot easily copy the difference.
Affordable. Buyers can afford to pay for the difference.
Profitable. The company can introduce the difference profitably.
Choosing a Positioning Strategy
+ Identifying Possible + Value propositions represent
Competitive Advantages the full positioning of the
brand
+ Choosing the right
+ Possible value propositions:
competitive advantages
More for more
+ Selecting an Overall More for the same
Positioning Strategy More for less
The same for less
Less for much less

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 Developing a Positioning Statement

Positioning statement
A statement that summarizes company or brand
positioning using this form:
To (target segment and need) our (brand) is
(concept) that (point of difference).