Chapter 7 Slides

Principles of Marketing
Seventeenth Edition
Chapter 7
Customer Value-Driven Marketing Strategy:

Creating Value for Target Customers
Copyright © 2018 Pearson India Education Services Pvt. Ltd. All Rights Reserved.
Learning Objectives
7-1 Define the major steps in designing a customer-driven marketing
strategy: market segmentation, targeting, differentiation, and
positioning.
7-2 List and discuss the major bases for segmenting consumer and
business markets.
7-3 Explain how companies identify attractive market segments and choose
a market-targeting strategy.
7-4 Discuss how companies differentiate and position their products for
maximum competitive advantage.
Learning Objective 1
Define the major steps in designing a customer-driven marketing strategy:
market segmentation, targeting, differentiation, and positioning.
Customer-Driven Marketing Strategy
List and discuss the major bases for segmenting consumer and business
markets.
Market Segmentation
Market segmentation requires dividing a market into smaller segments with
distinct needs, characteristics, or behaviors that might require separate
marketing strategies or mixes.
Market Segmentation
• Segmenting consumer markets
• Segmenting international markets
• Requirements for effective segmentation
Market Segmentation
Segmenting Consumer Markets
Geographi Demograp
c hic
segmentati segmentati
on on
Psychograp
Behavioral
hic
segmentati
segmentatio
on
n
Market Segmentation
Geographic segmentation divides the market into different geographical units such as
nations, regions, states, counties, cities, even neighborhoods or urban, suburban, rural
Many companies localize their products to
fit the needs of various geographies
Market Segmentation
Demographic segmentation divides the market into segments based on

variables such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation.
Market Segmentation
Gender segmentation Age and life-cycle stage Income segmentation

segmentation
Market Segmentation
Psychographic
segmentation
divides a market into
different segments
based on social
class, lifestyle, or
personality
characteristics.
Market Segmentation
Behavioral segmentation
divides a market into segments
based on consumer
knowledge, attitudes, uses of a
product, or responses to a
product.
• Occasions
• Benefits sought
• User status
• Usage rate
• Loyalty status
Market Segmentation
Behavioral Segmentation
Benefits-sought
Market Segmentation
Behavioral Segmentation
Loyalty status
Market Segmentation
Market Segmentation
Multiple segmentation is used to identify
smaller, better-defined target groups.
Experian’s Mosaic USA system classifies
U.S. households into one of 71 lifestyle
segments and 19 levels of affluence.
Market Segmentation
Segmenting International Markets
Geographic Economic
location factors
Political and Cultural

legal factors factors
Market Segmentation
Segmenting International Markets
Intermarket segmentation involves forming segments of consumers who
have similar needs and buying behaviors even though they are located in
different countries.
Market Segmentation
Requirements for Effective Segmentation
Measurable Accessible Substantial
Differentiable Actionable
Explain how companies identify attractive market segments and

choose a market-targeting strategy.
Market Targeting
Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Competitors, new entrants, substitute products, power of buyers
relative to sellers, and powerful suppliers
• Company objectives and resources
Market Targeting
Selecting Target Market Segments
A target market is a set of buyers who share common needs or
characteristics that the company decides to serve.
Market Targeting
Figure 7.2 Market-Targeting Strategies.
Targeting
Market Targeting
Undifferentiated marketing targets the whole market with one offer.
• Mass marketing
• Focuses on common needs rather than what’s different
• electric and gas utilities, soap, paper towels and gasoline
Market Targeting
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
Market Targeting
Selecting Target Markets
Concentrated marketing targets a large
share of a smaller market.
• Limited company resources
• Knowledge of the market
• More effective and efficient
• https://www.shopify.com/blog/niche-
markets
Market Targeting
Micromarketing is the practice of tailoring products and marketing programs

to suit the tastes of specific individuals and locations.
• Local marketing
• Individual marketing
Market Targeting
Local marketing involves tailoring brands and promotion to the needs and
wants of local customer segments.
• Cities
• Neighborhoods
• Stores
• Location-based marketing
Market Targeting
Selecting Target Markets
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
• Example:
https://www.youtube.com/watch?v=
hZma3bsx9xI
• https://www.youtube.c
om/watch?v=tKOITm
V0NfU&ab_channel=
AtlantisUniversity
Market Targeting
Choosing a targeting strategy depends on
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies
Socially responsible target marketing
Discuss how companies differentiate and position their products for maximum
competitive advantage.
Differentiation and Positioning
Product position is the way the
product is defined by consumers on
important attributes.
Positioning maps show consumer

perceptions of marketer’s brands
versus competing products on
important buying dimensions.
• https://www.perceptua
lmaps.com/make-a-
perceptual-map/free-
download/
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
• Communicating and delivering the chosen position to the market
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.
Identifying a set of possible competitive
advantages to differentiate along the lines of:
Product
Services
Channels
People
Image
How many competitive advantages to promote
develop a unique selling proposition (USP) for companies should position themselves on more than
each brand and stick to it one differentiator
Not every differentiation pays off
A competitive advantage should be:
Important Distinctive Superior
Communicable Preemptive Affordable
Profitable
Value proposition is the full

mix of benefits upon which a
brand is positioned.
More for more
More or the same
Why not more for less?
Same for less
Less for much less
Positioning statement summarizes company or brand positioning using this
form: To (target segment and need) our (brand) is (concept) that (point of
difference)
Communicating and Delivering the Chosen Position
Choosing the positioning is often easier than implementing the position.
Establishing a position or changing one usually takes a long time.
Maintaining the position requires consistent performance and communication.
Class Exercise
• Exercise Question (write one paragraph for each question):
• 1. How will you segment the market for your project product (you
MUST provide rationale for your choice)?
• 2. What target markets will you select (you MUST provide rationale for
your choice)?
• 3. What will be your differentiation and positioning strategy (you MUST
provide rationale for your choice)?
Copyright

Chapter 7 Slides

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

Chapter 7 Slides

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 7 Slides

Uploaded by

Copyright:

Available Formats

Principles of Marketing

Customer Value-Driven Marketing Strategy:

Demographic segmentation divides the market into segments based on

Gender segmentation Age and life-cycle stage Income segmentation

Political and Cultural

Measurable Accessible Substantial

Explain how companies identify attractive market segments and

Differentiated marketing targets several

Micromarketing is the practice of tailoring products and marketing programs

Positioning maps show consumer

Competitive advantage is an advantage over competitors gained by offering

Important Distinctive Superior

Communicable Preemptive Affordable

Value proposition is the full

You might also like