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MarketingMarketingBusiness 243Business 243

3-2Prentice Hall, Copyright 2009

Cognitive Dissonance

A buyer’s doubts shortly after a purchase about whether it

was the right decision.

Marketers combat cognitive dissonance via 1-800 numbers, FAQs, and Web

feedback forms.

CHAPTER 6

Customer-Driven Marketing Strategy:

Creating Value for Target Customers

Designing a true customer-driven marketing strategy involves:

1. Segmentation

2. Targeting

3. Differentiation

4. Positioning

SEGMENTATION

Dividing a market into smaller groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes

Key variables:GeographicDemographicPsychographicBehavioral

No single way to segment is best

Geographic

World region or country

Region of country

City or metro size

Density

Climate

Demographic

Age, gender, family size, family life cycle, income, occupation, education, race, religion, generation, nationality

The most popular bases for segmenting customer groups

Easier to measure than most other types of variables

Psychographic 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

Segmentation

Best to use multiple segmentation bases in order to identify smaller, better-defined target groups

Start with a single base and then expand to other bases.

Business Segmentation

Consumer and business markets use many of the same variables for segmentation

Business marketers can also use:Operating characteristicsPurchasing approachesSituational factorsPersonal characteristics

Requirements for Effective Segmentation

To be useful, market segments must be:

Measurable

Accessible

Substantial

Differentiable

Actionable

Market Targeting

Market targeting involves:Evaluating marketing segments

Segment size, segment structural attractiveness, and company objectives and resources are considered

Selecting target market segments.Alternatives range from undifferentiated

marketing to micromarketing

Being socially responsible

Selecting Target Market Segments

Targeting strategies include:Undifferentiated (mass) marketing:

Ignores segmentation opportunities

Differentiated (segmented) marketing:Targets several segments and designs

separate offers for each

Concentrated (niche) marketing:Targets one or a couple small segments

Micromarketing (local or individual marketing)

Micromarketing

Tailoring 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

Socially Responsible Targeting

Smart targeting helps both companies and consumers.

Marketing sometimes generates controversy and concern when targeting:

Vulnerable, minority or disadvantaged populations

Children and teens

Controversy arises when an attempt is made to profit at the expense of segments

Differentiation and Positioning

A product’s 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.

Perceptual positioning maps can help define a brand’s position relative to competitors

Differentiation and Positioning

Actually differentiating the marketing offering to create superior customer value

Types of differentiation:Product differentiationServices differentiationChannels differentiationPeople differentiationImage differentiation

Differentiation and Positioning

Choosing the right competitive advantage requires selecting how many and which differences to promote

Differences that could be promoted are:ImportantDistinctiveSuperiorPreemptiveAffordableProfitable

Value Proposition

Overall or full positioning of the brand is called the brand’s value proposition

Potential value propositions include:More for more: More benefits for higher price

More for same: More benefits for the same price

More for less: More benefits for a lower price

Same for less: Same benefits for a lower price

Less for much less: Fewer benefits for much lower price

Value Proposition

Developing a positioning statement

Format: “To (target segment and need) our (brand/company) is (a concept) that (point of difference).”

Example: “To busy mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go.”

Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired position to target consumers

The marketing mix efforts must support the positioning strategy

Firm must also monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies