Principles of Marketing Seventeenth Edition PDF

Principles of Marketing Seventeenth Edition Chapter 7 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers Copyright © 2018 Pearson Education Ltd. All Rights...

Principles of Marketing Seventeenth Edition Chapter 7 Customer Value-Driven Marketing Strategy: Creating Value for Target Customers Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Learning Objectives 7-1 Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning. 7-2 List and discuss the major bases for segmenting consumer and business markets. 7-3 Explain how companies identify attractive market segments and choose a market-targeting strategy. 7-4 Discuss how companies differentiate and position their products for maximum competitive advantage. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Learning Objective 1 Define the major steps in designing a customer-driven marketing strategy: market segmentation, targeting, differentiation, and positioning. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Customer-Driven Marketing Strategy Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Learning Objective 2 List and discuss the major bases for segmenting consumer and business markets. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Market segmentation requires dividing a market into smaller segments with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting consumer markets Segmenting business markets Segmenting international markets Requirements for effective segmentation Copyright © 2018 Pearson Education Ltd. All Rights Reserved.  Market Segmentation Segmenting Consumer Markets Geographi Demograp c hic segmentati segmentati on on Psychograp Behavioral hic segmentati segmentati on on Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Demographic segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Age and life-cycle stage segmentation divides a market into different age and life-cycle groups. Gender segmentation divides a market into different segments based on gender. Income segmentation divides a market into different income segments. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Psychographic segmentation divides a market into different segments based on social class, lifestyle, or personality characteristics. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Behavioral segmentation divides a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Behavioral Segmentation Occasions Benefits sought User status Usage rate Loyalty status Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Consumer Markets Multiple segmentation is used to identify smaller, better-defined target groups. Experian’s Mosaic USA system classifies U.S. households into one of 71 lifestyle segments and 19 levels of affluence. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting Business Markets Consumer and business marketers use many of the same variables to segment their markets. Additional variables include: Customer operating characteristics Purchasing approaches Situational factors Personal characteristics Copyright © 2018 Pearson Education Ltd. All Rights Reserved.  Market Segmentation Segmenting International Markets Geographic Economic location factors Political and Cultural legal factors factors Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Segmentation Segmenting International Markets Intermarket segmentation involves forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries. Copyright © 2018 Pearson Education Ltd. All Rights Reserved.  Market Segmentation Requirements for Effective Segmentation Measurable Accessible Substantial Differentiabl Actionable e Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Learning Objective 3 Explain how companies identify attractive market segments and choose a market-targeting strategy. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Evaluating Market Segments Segment size and growth Segment structural attractiveness Company objectives and resources Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments A target market is a set of buyers who share common needs or characteristics that the company decides to serve. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Figure 7.2 Market-Targeting Strategies. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments Undifferentiated marketing targets the whole market with one offer. Mass marketing Focuses on common needs rather than what’s different Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments Differentiated marketing targets several different market segments and designs separate offers for each. Goal is to achieve higher sales and stronger position More expensive than undifferentiated marketing Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Markets Concentrated marketing targets a large of a smaller market. Limited company resources Knowledge of the market More effective and efficient Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Local marketing Individual marketing Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments Local marketing involves tailoring brands and promotion to the needs and wants of local customer segments. Cities Neighborhoods Stores Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Markets Individual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers. Also known as: One-to-one marketing Mass customization Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Market Targeting Selecting Target Market Segments Choosing a targeting strategy depends on Company resources Product variability Product life-cycle stage Market variability Competitor’s marketing strategies Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Learning Objective 4 Discuss how companies differentiate and position their products for maximum competitive advantage. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Product position is the way the product is defined by consumers on important attributes. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Positioning maps show consumer perceptions of marketer’s brands versus competing products on important buying dimensions. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Identifying a set of possible competitive advantages to build a position Choosing the right competitive advantages Selecting an overall positioning strategy Communicating and delivering the chosen position to the market Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy 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. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Identifying a set of possible competitive advantages to differentiate along the lines of: Product Services Channels People Image Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy A competitive advantage should be: Important Distinctive Superior Communicable Preemptive Affordable Profitable Copyright © 2018 Pearson Education Ltd. All Rights Reserved.  Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Value proposition is the full mix of benefits upon which a brand is positioned. Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Positioning statement summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference) Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Positioning Statement Example for Evernote: “To busy multitaskers who need help remembering things, Evernote is a digital content management application that makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet, and the Web.” Copyright © 2018 Pearson Education Ltd. All Rights Reserved. Differentiation and Positioning Communicating and Delivering the Chosen Position Choosing the positioning is often easier than implementing the position. Establishing a position or changing one usually takes a long time. Maintaining the position requires consistent performance and communication. Copyright © 2018 Pearson Education Ltd. All Rights Reserved.