1. Principles of Marketing
Customer-Driven Marketing Strategy: Creating Value for Target Customers

2. Steps in Segmentation, Targeting and Positioning
Market Segmentation
Steps in Segmentation, Targeting and Positioning

3. Market Segmentation
Market segmentation is dividing a heterogeneous market into smaller groups with distinct needs, characteristics, or behavior that might require seperate marketing strategies

4. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
What customers will we serve?
Geographic
Demographic
Psychographic
Behavioral

5. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market into different geographical units such as nations, regions, counties, or cities

6. Segmenting Consumer Markets
Discussion Question
Segmenting Consumer Markets
Geographical climate is a legitimate means of segmentation for many products or services.
Name examples of products for which need (and demand) would vary on a geographical basis.

7. Segmenting Consumer Markets
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
Most popular type of segmentation
Demographics are closely related to needs, wants and usage rates

8. Demographic Segmentation
Market Segmentation
Demographic Segmentation
Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groups – travel, holiday
Gender segmentation divides the market based on sex (male or female) – clothing, cosmetics, magazines
Income segmentation divides the market into different income groups – clothing, automobiles

9. What type of demographic segmentation is reflected by this ad?
Discussion Question
What type of demographic segmentation is reflected by this ad?

10. Market Segmentation Segmenting Consumer Markets
Psychographic segmentation divides buyers into different groups based on;
social class,
lifestyle,
personality traits

11. Market Segmentation
Psychographic Segmentation - Life Style

12. Market Segmentation
Swatch targets those with an active lifestyle

13. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers into groups based on;
knowledge,
attitudes,
uses,
responses to a product
Typically done first

14. Behavioral Segmentation
Market Segmentation
Behavioral Segmentation
Occasion segmentation
Different shaped chocolates for Easter, Valentine’s Day or Christmas
Benefit segmentation
Serious sportsmen vs. value-seeking moms for a sport wear
User status
Nonusers, ex-users, potential users, first-time users, regular users

15. Behavioral Segmentation
Market Segmentation
Behavioral Segmentation
Usage rate
Light, medium and heavy users
Loyalty
Mac users, Coke drinkers
Multiple segmentation is used to identify smaller, better-defined target groups

16. Market Segmentation
Segmenting International Markets
Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries

17. Market Segmentation
Intermarket Segmentation
What do majority of teens find appealing all over the world?

18. Requirements for Effective Segmentation
Market Segmentation
Requirements for Effective Segmentation
Measurable
Size, purchasing power, and profile of segment
Accessible
Can be reached and served
Substantial
Large and profitable enough to serve
Differentiable
Respond differently
Actionable
Effective programs can be developed

19. Market Targeting
Market targeting (Targeting) is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Which customers will the company serve?

20. Evaluating Market Segments
Market Targeting
Evaluating Market Segments
Segment size and growth
Segment structural attractiveness
Level of competition
Substitute products
Power of buyers
Powerful suppliers
Company objectives and resources

21. Selecting Target Market Segments
Market Targeting
Selecting Target Market Segments
Company objectives, strenght, resources
- Segment attractiveness (size & growth)
- Segment structure

22. Selecting Target Market Segments
Market Targeting
Selecting Target Market Segments

23. Target Marketing Strategies
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

24. Selecting Target Market Segments
Market Targeting
Selecting Target Market Segments
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

25. Market Targeting Targets high-end casual appearel Jeanswear
Targets outdoor enthusiasts
Workwear like jeanswear
Durable boots and apperal for all gender
Targets those who like up-scale activewear
Targets from college students to professionals

26. Selecting Target Market Segments
Market Targeting
Selecting Target Market Segments
Concentrated (niche) marketing targets a large share of one or few niches.
Greater knowledge of consumer needs
Special reputation
More effective marketing
More efficient targeting
Few competitiors

27. Selecting Target Market Segments
Market Targeting
Selecting Target Market Segments
Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
Local marketing
Wal-Mart uses more than 200 finely tuned shelf plans to match soup assortments
Individual marketing
Each customer can create his/her sneakers at NikeID Web site

28. Market Targeting
Individual marketing

29. Choosing a Targeting Strategy
Market Targeting
Choosing a Targeting Strategy
Which strategy is best depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Competitor’s marketing strategies

30. Choosing a Targeting Strategy
Market Targeting
Choosing a Targeting Strategy
Mass Marketing
Differentiated Marketing
Niche Marketing
Company resources
Not limited
Limited
Product variability
Uniform
Variable
PLC Stage
Introduction
Maturity
Market variability
Not variable
Highly variable
Competitor’s strategy
Competitor use the other two

31. Socially Responsible Target Marketing
Market Targeting
Socially Responsible Target Marketing
Concern for vulnerable segments
Children
Alcohol
Cigarettes

32. Differentiation and Positioning
How will we serve the customers?

33. 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
It must serve the needs and preferences of well-defined target markets

34. Differentiation and Positioning
Positioned on;
Cadillac - Luxury
Nissan - Economy
Porsche -
Performance

35. Differentiation and Positioning
Positioning maps show consumer perceptions of company brands versus competing products on important buying dimensions

36. Differentiation and Positioning
Positioning Map

37. Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible competitive advantages to build a position
Choosing the right competitive advantages
Selecting an overall positioning strategy

38. 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 - Bose
Service differentiation - Lexus
Channels – Amazon.com, Migros
People – Singapore Airlines
Image – Ritz Carlton

39. Differentiation and Positioning
Competitive Advantage
Competitive Advantage is the advantage over competitors gained by offering greater value either through lower prices or by providing more benefits that justify higher prices

40. Differentiation and Positioning
Selecting an Overall Strategy
Value proposition is the full mix of benefits upon which a brand is positioned

41. Differentiation and Positioning
Choosing the Right Competitive Advantages
More for More – Ritz Carlton, Mont Blanc, Mercedes, Apple
More for the Same – Toyota Lexus vs. BMW
The Same for the Less – METRO Cash&Carry, Online stores
Less for Much Less – Easy Jet
More for Less – Ikea