Marketing Strategy Chapter 1

Study Notes

A customer-driven marketing strategy involves designing a strategy that meets the needs of target customers.
The strategy includes four major steps: market segmentation, targeting, differentiation, and positioning.

Market segmentation involves dividing a larger market into smaller segments of consumers with similar needs and characteristics.
Bases for segmenting consumer markets include:
- Geographic segmentation (e.g., nations, states, regions, cities)
- Demographic segmentation (e.g., age, gender, life cycle stage, income)
- Psychographic segmentation (e.g., social class, lifestyle, personality)
- Behavioral segmentation (e.g., occasions, benefits, user status, usage rate, loyalty status)
Bases for segmenting business markets include:
- Personal characteristics (e.g., demographics)
- Situational factors (e.g., operating characteristics)
- Purchasing approaches
Bases for segmenting international markets include:
- Geography
- Economy
- Cultural factors
- Political and legal factors

Segments must be measurable (e.g., size, purchasing power, profiles)
Segments must be accessible (e.g., can be effectively reached and served)
Segments must be substantial (e.g., large or profitable enough to serve)
Segments must be differential (e.g., respond differently to different marketing mix elements and actions)
Segments must be actionable (e.g., can be attracted and served)

Evaluating market segments involves analyzing segment size and growth, segment structural attractiveness, and company objectives and resources.
There are four levels of market segmentation:
- Micromarketing (tailoring products to individual customers or locations)
- Niche marketing (tailoring products to subgroups within segments)
- Segmented marketing (tailoring products to one or more segments)
- Mass marketing (offering the same product to all consumers)

Market positioning involves creating an image or identity for a product or brand in the minds of target customers.
Steps to choosing and implementing a positioning strategy include:
- Identifying a set of possible competitive advantages
- Selecting the right competitive advantage
- Effectively communicating and delivering the chosen position to the market
Types of competitive differentiation include:
- Product differentiation (e.g., features, performance, quality, style)
- Service differentiation (e.g., ordering, installation, maintenance, training)
- Personnel differentiation (e.g., expertise, courtesy, responsiveness)
- Image differentiation (e.g., atmosphere, events, symbols)
A unique selling proposition (USP) is the one benefit that sets a brand or product apart from competitors in the minds of target customers.
A perceptual map is a visual representation of how consumers perceive a brand or product relative to competitors.

A value proposition is the full mix of benefits on which a product is positioned.
A positioning statement summarizes a company or brand's positioning using the form: "To [target segment and need], our [brand] is [concept] that [point of difference]."

Consistent performance and communication are key to delivering the chosen position.
A brand position must be kept in mind when communicating to consumers via all means (e.g., advertisements, public messages, promotional activities, social responsibility endeavors).
A brand positioning may evolve over time, but abruptly changing its position can damage the brand.