Marketing for Hospitality and Tourism

Seventh Edition

CHAPTER 8
Customer-Driven
Marketing Strategy:
Creating Value for
Target Customers

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 Learning Objectives

1. Define the major steps in designing a

customer-driven marketing strategy:
market segmentation, targeting, and
positioning.
2. List and distinguish among the
requirements for effective
segmentation: measurability,
accessibility, substantiality, and
actionability.

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 Learning Objectives (cont.)

3. Explain how companies identify

attractive market segments and
choose a market-targeting strategy.
4. Illustrate the concept of positioning for
competitive advantage by offering
specific examples.

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 Target Marketing

Market Market Market

Segmentation Targeting Positioning

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 Market Segmentation

Geographic Demographic

Psychographic Behavioral

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Demographic Segmentation

Age and Life-

Cycle Stage

Gender Income

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Behavioral Segmentation

Occasion

Benefits Sought

User Status

Usage Rate

Loyalty Status
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 Requirements for Effective
Segmentation

Measurability Accessibility
Effective
Segmentation
Substantiality Actionability

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Evaluating Market Segments

Size & Growth

Company Structural
Objectives & Attractive-
Resources ness

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 Selecting Market Segments

Concentrated

Marketing
Undifferentiated Strategies Differentiated

Micromarketing

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 Positioning Strategy

Effectively
Identifying Selecting
Communicate
Competitive Competitive
Chosen
Advantages Advantages
Position

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Differentiating Competitive
Advantages

Management
Orientations

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 Positioning Errors

Underpositioning

Confused Over-
Positioning Positioning

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 Which Differences?

Important

Distinctive

Superior

Communicable

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Which Differences? (cont.)

Preemptive

Affordable

Profitable

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Figure 8–3 Positioning map of service level versus price.
Source: Lovelock, Christopher H; Wirtz, Jochen, Services Marketing: People, Technology, Strategy, 7th Ed.,
©2011, p. 74. Reprinted and Electronically reproduced by permission of Pearson Education, Inc., New York, NY.

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 Key Terms

• Behavioral segmentation
– Dividing a market into groups based on
consumers' knowledge, attitude, use, or
response to a product

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 Key Terms (cont.)

• Competitive advantage
– 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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 Key Terms (cont.)

• Competitors' strategies
– When competitors use segmentation,
undifferentiated marketing can be
suicidal. Conversely, when competitors
use undifferentiated marketing, a firm
can gain an advantage by using
differentiated or concentrated
marketing.

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 Key Terms (cont.)

• Confused positioning
– Leaving buyers with a confused image
of a company
• Degree of product homogeneity
– Undifferentiated marketing is more
suited for homogeneous products.
Products that can vary in design, such
as restaurants and hotels, are more
suited to differentiation or
concentration.
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 Key Terms (cont.)

• Demographic segmentation
– Dividing the market into groups based
on demographic variables such as age,
gender, family size, family life cycle,
income, occupation, education, religion,
race, and nationality
• Gender segmentation
– Dividing a market on the basis of
gender

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 Key Terms (cont.)

• Geographic segmentation
– Dividing a market into different
geographic units such as nations,
states, regions, counties, cities, or
neighborhoods
• Income segmentation
– Dividing a market into different income
groups

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 Key Terms (cont.)

• Local marketing
– Tailoring brands and promotions to the
needs and wants of local customer
groups-cities, neighborhoods, and
specific restaurant/hotel/store locations

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 Key Terms (cont.)

• Market homogeneity
– If buyers have the same tastes, buy a
product in the same amounts, and react
the same way to marketing efforts,
undifferentiated marketing is
appropriate.
• Market positioning
– Formulating competitive positioning for
a product and a detailed marketing mix

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 Key Terms (cont.)

• Market segmentation
– Dividing a market into direct groups of
buyers who might require separate
products or marketing mixes
• Market targeting
– Evaluating each market segment's
attractiveness and selecting one or
more segments to enter

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