Customer-Driven Marketing Strategy:

August 23, 2017 Marketing

A REPORT ON Customer-Driven Marketing Strategy: Creating Value for Target Customers INDEX SL. NO. TOPICS PAGE NO. 1. Market segmentation1 2. Segmenting consumer markets 2-4 3. Segmenting business markets4 4. Segmenting International markets 5 5. Requirements for effective segmentation5-6 6. Market targeting 6 7. Target marketing strategies7-9 8. Differentiation and positioning 9 9.

Positioning maps 10 10. Choosing a Differentiation and positioning 10-14 strategy| Market Segmentation: Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. Steps in market segmentation, targeting and positioning A market can be segmented by three ways. These are as follows: * Segmenting consumer markets * Segmenting business markets * 1 1 1 Segmenting international markets 1

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Segmenting Consumer Markets: The segmentation of consumer markets requires the creation of sub-groups from a larger population to more specifically target them. There are virtually dozens of ways that a market might be segmented and the segments chosen will depend on the business and the products or services it offers. Basically, segmentation is all about identifying specific groups of people based on common characteristics. 2 The major categories of segmentation bases from which managers can select: Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities.

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 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 Gender segmentation divides the market based on sex (male or female) Income segmentation divides the market into affluent or low-income consumers Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits 3

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 Segmenting Business Markets * can use some of the same bases as used to segment consumer markets * often segment business markets on the type of customer or on industry classification * segmentation by size of customer really considers sales volume or potential * can also consider segmenting on the basis of the type of buying situation the customer is in 4 Segmenting international markets

International market segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries. Requirements for Effective Segmentation To be useful, Market segments must be: Measurable: – The degree to which the size and purchasing power of the segments can be measured. 5 Accessible: – A degree to which the segment can be effectively reached and served. Substantial: – The degree to which the segments are large and/or profitable enough. A segment should be the largest possible homogeneous group worth going after with tailored marketing programmed.

Differentiable: – The segments are conceptually be distinguished and has the ability to respond differently to different marketing mix elements and programs. Actionable: – The degree to which effective programs can be formulated for attracting and serving the segments. Market Targeting Selecting Target Market Segments Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Evaluating Market Segments * Segment size and growth * Segment structural attractiveness * 6 Company objectives and resources Target Marketing Strategies

Undifferentiated(mass) marketing| Micromarketing(local or individual marketing)| Differentiated(segmented) marketing| Concentrated(niche)marketing| Target widely Target narrowly Undifferentiated marketing targets the whole market with one offer I. Mass marketing II. Focuses on common needs rather than what’s different Differentiated marketing targets several different market segments and designs separate offers for each I. Goal is to achieve higher sales and stronger position II. More expensive than undifferentiated marketing 7

Concentrated marketing targets a large share of a small market I. Limited company resources II. Knowledge of the market III. More effective and efficient Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations I. Local marketing II. Individual marketing Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups I. Cities II. Neighborhoods III. Stores Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers 8

Also known as: * One-to-one marketing * Mass customization * Markets-of-one marketing 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 * Perceptions * Impressions * Feelings 9 Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions Choosing a Differentiation and positioning strategy * Identifying Possible Value Differences and Competitive advantages Choosing the right competitive advantages * Selecting an Overall Positioning Strategy * 10 Developing a Positioning Statement Identifying Possible Value Differences and Competitive Advantages 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 Choosing the right competitive advantages Identifying a set of possible competitive advantages to build a position by providing superior value from: * Product differentiation * Service differentiation Personnel differentiation * Image differentiation Suppose a company is fortunate enough to discover several potential differentiations that provide competitive advantages. It now must choose the ones on which it will build its positioning strategy. It must decide how many differences to promote and which ones. * How many differences to promote. * 11 Which differences to promote— A difference is worth establishing to the extent that it satisfies the following criteria : * Important * Distinctive * Superior * Communicable * Preemptive * Affordable * Profitable

Difference to promote should be — Important: The difference delivers a highly valued benefit to target buyers. Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way. Superior: The difference is superior to other ways that Customers might obtain the same benefit. 12 Communicable: The difference is communicable and visible to buyers. Preemptive: Competitors cannot easily copy the difference, Affordable: Buyers can afford to pay for the difference.

Profitable: The Company can introduce the difference profitably Selecting an Overall Positioning Strategy The full positioning of a brand is called the brand’s value proposition – the full mix of benefits upon which the brand is differentiated and positioned. It is the answer to the customer’s question “why should I buy your brand? ” Possible value propositions 13 Developing a position statement A statement that summarizes company or brand positioning – it takes this form: To (target segment and need) our (brand) is (concept) that (point of difference). 14 THANK YOU

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