CHAPTER 6 CUSTOMER DRIVEN MARKETING STRATEGY Designing a Customer Driven Marketing Strategy select customers to serve segmentation dividing market into smaller segments of buyers with distinct needs characteristics or behaviors that might require separate marketing strategies or mixes targeting evaluating each market segment s attractiveness and selecting one or more market segments to enter decide on value proposition customer value differentiation differentiating the firm s market offerings to create superior positioning arranging for a market offering to occupy a clear distinctive and desirable place relative to competing products in the minds of target consumers Major Segmentation Variables for Consumer Markets geographical units geographic segmentation dividing market into segments based on different demographic segmentation dividing market into segments based on variables such as age life cycle stage gender income occupation education religion ethnicity and generation psychographic segmentation divides market into segments based on social class behavioral segmentation consumer lifestyles and consumer personality occasion segmentation dividing market into segments according to occasions when buyers get the idea to buy make their purchase use purchased them benefits that consumers seek from the product benefit segmentation dividing market into segments according to different user status usage rate loyalty status Segmenting Business Markets consumer and business markets use many of the same variables to segment markets operating characteristics situational factors personal characteristics Segmenting International Markets traits and behaviors Geographic Location assumes nations close to one another will have many common Economic Factors countries may be grouped together by population income levels or overall level of economic development Political and Legal Factors segmented by political and legal factors such as type and stability of the government receptivity to foreign firms monetary regulations and amount of bureaucracy and attitudes customs and behavioral patterns Cultural Factors grouping countries according to common languages religions values intermarket cross market segmentation grouping consumers with similar needs and buying behaviors irrespective to their locations even though they are located in different countries Requirements for Effective Segmentation measured Measurable size purchasing power and profiles of marketing segments should be Accessible segments should be accessible effectively reached and served Substantial segments should be large or profitable enough to serve Differentiable conceptually distinguishable and respond differently to different marketing Actionable effective programs can be designed for attracting and serving the segments Evaluating various segments based on mix elements and programs Market Targeting segment size and growth segment structural attractiveness company objectives and resources Target Market set of buyers sharing common needs or characteristics that the company decides to serve Market Targeting Strategies or niches and design separate offers for each and go after the whole market with one offer Undifferentiated Mass Marketing firm decides to ignore market segment differences Differentiated Segmented Marketing firm decides to target several market segments Concentrated Niche Marketing firm goes after a large share of one or a few segments Micromarketing local or individual marketing tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments local marketing tailoring brand and marketing to the needs and wants of local individual marketing tailoring products and marketing programs to the needs and customer segments like cities neighborhoods and even specific stores preferences of individual customers Differentiation and Positioning Product Position way a product is defined by consumers on important attributes the place the product occupies in the consumers mind relative to competing products Choosing a Differentiation and Positioning Strategy Identifying set of differentiating competitive advantages Competitive Advantage advantage over competitors gained by offering greater customer value by having lower prices or providing more benefits that justify higher prices Choosing the right competitive advantages developing a unique selling proposition for each brand and sticking to it positioning on more than one differentiator Selecting Overall Positioning Strategy price to cover the higher costs blue winning propositions purple losing propositions green marginal proposition more for more providing most upscale product or service and charging higher more for the same comparable quality at lower price more for less best winning propositions difficult for companies to sustain best the same for less gives good deal less for much less lower performance or quality requirement at a much lower of both worlds price Positioning Statement summarizes company or brand positioning Format To target segment and need our brand is concept that point of difference CHAPTER 7 PRODUCTS SERVICES AND BRANDS Products consumption that might satisfy a want or need product anything that can be offered to a market for attention acquisition use or services activities benefits or satisfactions offered for sale intangible and do not result in ownership of anything Three Levels of a Product connection Core Customer Value what is bought by the customer entertainment productivity Actual Product product planners must turn core customer value into an actual product product and service features design quality level brand name and packaging Augmented Product additional consumer services and benefits warranty product support after sale service Product and Service Classifications Consumer Products bought by final consumer for personal consumption shopping efforts low customer involvement comparison of brands on price quality and style convenience products frequent purchases little planning little comparison or shopping products less frequent purchase much planning and shopping effort specialty products strong preference and loyalty special purchase effort little unsought products little product awareness or knowledge or if aware little or comparison of brands low price sensitivity even negative interest Industrial Products bought by individuals and organizations for further processing or for use in conducting a