Chapter 7

Customer-Driven Marketing Strategy

MKT 201, Zakia 1

 Market Segmentation

• Dividing the market into distinct groups with

distinct needs, characteristics, or behavior
who might require separate products or
marketing mixes.

MKT 201, Zakia

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 Bases for Segmenting
Consumer Markets
3. Behavioral
C 1. Demographic
H
A
R
A
C
T
E
R 4. Psychographic
I 2. Geographic
S
T
I
C
S

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Geographic
Region
Region

City
City or
or metro
metro size
size

Density
Density

Climate
Climate

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Demographic regions
Age/Family
Age/Family size
size &
& life
life cycle
cycle

Gender/Income
Gender/Income

Race/Religion/Nationality
Race/Religion/Nationality

Occupation/Education
Occupation/Education

Generation/Social
Generation/Social class
class
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 Psychographic

Lifestyle Personality

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 Behavioral

Occasions

User status Benefits

Usage rate

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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
• Benefits sought
• User status
• Usage rate
• Loyalty status
 Occasion Segmentation

• Dividing a market into different groups

according to occasions when buyers get idea
to buy, actually make their purchase or use
the purchased item.
• Cards for Eid, Diwali, Birthday, Friendship day,
Valentine’s day.

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MKT 201, Suman Saha 11
 Benefit Segmentation

• Dividing a market into different groups

according to the different benefits that
consumers seek from the product.

• Ex: Lifebuoy - 100% Protection. Clinic –

Dandruff free.

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MKT 201, Suman Saha 13
MKT 201, Suman Saha 14
 User Status

• Non Users, Ex Users, potential users, first time

users and regular users.
• Think about blood bank. Also a mother to be.

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MKT 201, Suman Saha 16
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 Usage Rate
• Light, Medium and Heavy Users.
• Like: Mobile phone users, Internet users.

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MKT 201, Suman Saha 19
 Market Segmentation
Using Multiple Segmentation Bases

Multiple segmentation is used to identify smaller,

better-defined target groups

Geodemographic segmentation is an example of

multivariable segmentation that divides groups
into consumer lifestyle patterns
 Effective Segmentation

Measurable
Accessible

Requirements
Actionable for
Effective
Segmentation
Differentiable

Substantial

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Requirements for effective segmentation
Measurable: The Size, purchasing power and
profiles of the segments can be measured.
Accessible: Not possible if it is targeted to single
men or women who stays late and socialize a lot.
Substantial: Profitable and large enough to
serve.
Differentiable: If a married and unmarried
women reacts same for a perfume then they are
considered to be one segment.
Actionable: Know your limits!!! Small pot Big
Loafs!!!
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 Target Marketing
• The process of evaluating each market
segment’s attractiveness and selecting one or
more segments to enter.

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 Target Marketing Strategies

Undifferentiated Differentiated Concentrated

(Mass) (Segmented) (Niche) Micro Marketing
Marketing Marketing Marketing

Targeting Targeting
Broadly Narrowly

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 Target Marketing Strategies
• Undifferentiated (Mass) Marketing:
 Ignore Market segment differences
 Whole Market = One offer
 Focuses on what is common in the needs of
consumers.
 Relies on mass distribution & Advertising.
 Aims to give the product a superior image.
 Difficult to develop a Product or Brand following
this strategy.
 Often have trouble competing with more focused
firms.
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 Target Marketing Strategies
• Differentiated Marketing:
 Target several segments & design separate
offerds for each.
 Ex: Nike athletic shoes for basketball, fencing,
golf, aerobics bicycling, baseball.
 Hope for higher sales and stronger position
within each market segments.
 More brands = more money.
 Negatives: development, research, channel,
promotional cost.

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 Target Marketing Strategies
• Concentrated Marketing:
 When company resources are limited; instead of
going for a small share of a big market; a firm
goes for a large share of one or a few segments
(Niches).
 It can market more effectively by fine tuning
products, prices, programs to the need of
carefully defined segments. Also Market
efficiently targeting its products, channels,
communications programs towards only
consumers that it can serve best and most
profitably.
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C. Concentrated Marketing
Segment
Segment33 Company
Company
Segment
Segment22 Marketing
Marketing
Mix
Mix
Segment
Segment11
B. Differentiated Marketing
Segment
Segment33 Company
CompanyMix
Mix33
Segment
Segment22 Company
CompanyMix
Mix22
Segment
Segment11 Company
CompanyMix
Mix11
A. Undifferentiated Marketing
Company
Company
Market
Market Marketing
Marketing
Mix
Mix
Selecting target market Segments
 Target Marketing Strategies
• Micromarketing: Tailoring products and
marketing programs to the needs and wants
of specific individuals and local customer
groups.
 Local Marketing: Tailoring brands and promotions to
the needs and wants of local customer groups – cities,
neighborhoods, and even specific stores. DRAWBACK:
Increase cost by reducing economies of scale, logistic
problems, confusion in Brand Image.
 Individual Marketing: Tailoring products and
marketing programs to the needs and preferences of
individual customers.

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 Market Positioning

• Arranging for a product to occupy a clear,

distinctive, and desirable place relative to
competing products in the minds of target
consumer.

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 Positioning for competitive Advantage
(Choosing a positioning Strategy)

Identifying Possible Competitive Advantages:

• 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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Image
Image Personnel
Personnel
Channel
Areas
Areas for
for Competitive
Competitive
Differentiation
Differentiation
Service
Service Product
Product
Positioning for Competitive Advantage
 Types of differentiation
Product Differentiation: Features, Attributes (Consistency,
durability, reliability) performance, style, design.
Service Differentiation: Speedy, Convenient, careful Delivery.
People Differentiation: Hiring and training better people than
the competitors.
Image Differentiation: Nike Swoosh….

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Positioning Map

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Selecting an Overall Positioning Strategy
• More for more; High quality-high price
• More for the same; compatible quality lower
Price
• More for less; High quality less price, Tata indica
• The same for less; same performance but less
price. walmart
• Less for much less; lower performance, for lower
price, lower the people don’t need.