Slide 1Designing a Customer-Driven Marketing StrategyStep 1: Market SegmentationMarket SegmentationMarket SegmentationMarket SegmentationMarket SegmentationMarket SegmentationMarket SegmentationMarket SegmentationMarket SegmentationSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationStep 2: TargetingTargetingEvaluating Market SegmentsTargeting StrategiesTargeting StrategiesTarget Marketing StrategiesMicromarketingChoosing a Targeting StrategySocially Responsible TargetingPositioningDifferentiation and PositioningDifferentiation and PositioningDifferentiation and PositioningHere’s Why All Of This Is So Important!Chapter 6Customer Driven Marketing Strategy: Creating Value for Target CustomersDesigning a Customer-Driven Marketing StrategyWho is our customer?!What do our customers think aboutWhen they think about us?Step 1: Market SegmentationDividing a market into smaller groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.The basic idea here: Take a group of customers that are inherently heterogeneous, and divide it into smaller groups that are more homogeneousThe basic idea here: Take a group of customers that are inherently heterogeneous, and divide it into smaller groups that are more homogeneousMarket SegmentationKey segmentation variables: geographicDemographic psychographicBehavioralNo single way to segment is best. Often combine more than one variable to define segments.Market SegmentationGeographic: world region or countryRegion of countryCity or metro size densityClimateMarket SegmentationDemographic:Age, gender, family size, family life cycle, income, occupation, education, race, religion, generation, nationality. most popular basis for segmenting customer markets easier to measure then most other types of variablesMarket SegmentationGender:Segmenting on the basis of gender often requires different products variations for men and women. neglected gender segments can offer new opportunities (nivea for men)Market SegmentationIncome:Identifies and targets the affluent for luxury goods. people with low annual incomes can be a lucrative marketSome manufacturers have different grades of products for different markets.Market SegmentationPsychographic segmentation:Dividing a market into different groups based on social class, lifestyle, or personality characteristics.Behavioral segmentation:Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product.Behavioral segmentation:User Status: Nonusers, ex-users, potential users, first-time users, regular usersUsage Rate: Light, medium, heavy Loyalty Status: brands, stores, companiesMarket SegmentationMarket SegmentationMarketers will frequently use more than one segmentation variable.Use multiple segmentation bases in order to identify smaller, better-defined target groups.Start with a single base and then expand to other bases.The goal: Create a heterogeneous customer group that mi ght be a good target for marketing activity.Segmenting Business MarketsConsumer and business markets use many of the same variables for segmentation.Business marketers can also use: operating characteristicsPurchasing approaches situational factorsPersonal characteristicsSegmenting International MarketsFactors used:Geographic location economic factorsPolitical and legal factors cultural factorsRequirements for Effective SegmentationTo be useful, market segments must be:Measurable accessible Substantial differentiable actionableStep 2: TargetingSelecting the market segments that will become the chosen targets of opportunityThe basic idea here: From the segments that have been identified in Step 1, pick those segment(s) to whom you plan to market your products or services.The basic idea here: From the segments that have been identified in Step 1, pick those segment(s) to whom you plan to market your products or services.TargetingYou have to decide which segments are most attractive.This is done by evaluating market segments on the criteria of:Segment size and growthSegment structural attractivenessCompany objectives and resourcesEvaluating Market SegmentsSegment Size and Growth:Analyze current segment sales, growth rates, and expected profitabilitySegment Structural Attractiveness:Consider competition, existence of substitute products, and the power of buyers and suppliers.Company Objectives and Resources:Examine company skills and resources needed to succeed in that segment.Offer superior value and gain advantages over competitors.Targeting StrategiesTargeting StrategiesUndifferentiated (mass) marketingIgnores segmentation opportunities such products rarely succeed for long in the american marketplaceDifferentiated (segmented) marketingTargets several segments and designs separate offers for each coca-cola, procter & gamble, toyota,Target Marketing StrategiesConcentrated (niche) marketingTargets one or a couple of small segments.Niches have very specialized interests.MicromarketingTailoring products and marketing programs to suit the tastes of specific individuals and locations.Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, specific stores.Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.Choosing a Targeting StrategyFactors to consider:Company resourcesProduct variabilityProduct’s life-cycle stageMarket variabilityCompetitors’ marketing strategiesMarketing sometimes generates controversy and concern when targeting: Vulnerable, minority, or disadvantaged populationsChildren and teensSocially Responsible Targeting24PositioningA product’s position is the way a product is defined by consumers on important attributes —the place the product occupies in consumers’ minds relative to competing products.The basic idea here: What does a customer think about when he/she think about US?The basic idea here: What does a customer think about when he/she think about US?Choosing a differentiation and positioning strategy involves:Identifying a set of possible value differences and competitive
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