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Copyright 2017 Pearson Education, Ltd.

6-1
Learning Objectives
6-1. Define the major steps in
designing a customer value-
driven marketing strategy: market
segmentation, targeting,
differentiation, and positioning.
6-2. List and discuss the major bases
for segmenting consumer and
business markets.

Copyright 2017 Pearson Education, Ltd. 6-2


Learning Objectives
6-3. Explain how companies identify
attractive market segments and
choose a market- targeting strategy.

6-4. Discuss how companies


differentiate and position their
products for maximum
competitive advantage.

Copyright 2017 Pearson Education, Ltd. 6-3


First Stop: Henkels Persil
A Glocal Marketing Success

Persils success
in the Middle
East is
predominantly
due to a deep
Understanding
of the regional
consumers
needs and
preferences. Copyright 2017 Pearson Education, Ltd. 6-4
Learning Objective 6-1

Define the major steps in designing a


customer value-driven marketing
strategy: market segmentation,
targeting, differentiation, and
positioning.

Copyright 2017 Pearson Education, Ltd. 6-5


Figure 6.1 - Designing a
Customer Value-Driven Market
Strategy

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Learning Objective 6-1
Summary
Customer value-driven marketing
strategy
Identifying which customers to serve
Determining a value proposition
Market segmentation and market
targeting
Differentiating the market offering
Positioning in the minds of target
customers Copyright 2017 Pearson Education, Ltd. 6-7
Learning Objective 6-2

List and discuss the major bases for


segmenting consumer and business
markets.

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Table 6.1 - Major
Segmentation Variables for
Consumer Markets

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Geographic and
Demographic Segmentation
Geographic segmentation:
Dividing a market into different
geographical units
Such as nations, states, regions,
counties, cities, or neighborhoods
Demographic segmentation:
Dividing a market into segments
based on variables
Such as age, life-cycle stage, gender,
income, occupation, education, religion,
ethnicity, and generation 6 - 10
Copyright 2017 Pearson Education, Ltd.
Demographic Segmentation

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Psychographic
Segmentation
Marketers segment their markets
using variables such as
Social class
Lifestyle
Personality characteristics
The products people buy reflect
their lifestyles.

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Psychographic
Segmentation

VF Corporation
offers a closet
full of more than
30 premium
lifestyle brands.

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Behavioral Segmentation
Occasion segmentation: Segments
divided according to occasions, when
the buyers
Get the idea to buy
Make their purchase
Use the purchased item
Benefit segmentation: Segments
divided according to the different
benefits that consumers seek from
the product.
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Behavioral Segmentation

Schwinn
makes
bikes for
every
benefit
segment.

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Behavioral Segmentation
User status: Markets can be
segmented into nonusers, ex-users,
potential users, first-time users, and
regular users.
Usage rate: Markets can be
segmented into light, medium, and
heavy product users.
Loyalty status: Consumers can be
loyal to brands, stores, and
companies.
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Multiple Segmentation
Bases
Segmentation bases help companies
to
Identify smaller, better-defined target
groups
Identify and understand key customer
segments
Reach customers more efficiently by
tailoring market offerings and messages
to customers specific needs
Segmentation systems help
marketers segment people and
Copyright 2017 Pearson Education, Ltd. 6 - 17
Segmenting Business
Markets
Consumer and business markets use
many of the same variables for
segmentation.
Variables used by business marketers
for segmentation include
Operating characteristics
Purchasing approaches
Situational factors
Personal characteristics

Copyright 2017 Pearson Education, Ltd. 6 - 18


Segmenting International
Markets
Variables include
Geographic location
Economic factors
Political and legal factors
Cultural factors
Intermarket (cross-market)
segmentation: Grouping consumers
with similar needs and buying
behaviors irrespective of their
location
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Requirements for
Effective Segmentation

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Learning Objective 6-2
Summary
Consumer market segmentation
Geographic, demographic,
psychographic , and behavioral
Business market segmentation
Demographics, operating
characteristics, purchasing approaches,
situational factors, and personal
characteristics
Requirements for effective
segmentation
Measurable, accessible, substantial ,
Copyright 2017 Pearson Education, Ltd. 6 - 21
Learning Objective 6-3

Explain how companies identify


attractive market segments and
choose a market-targeting strategy.

Copyright 2017 Pearson Education, Ltd. 6 - 22


Market Targeting
Evaluating the various segments
based on
Segment size and growth
Segment structural attractiveness
Company objectives and resources
Selecting target market segments
Target market: Set of buyers sharing
common needs or characteristics that
the company decides to serve

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Figure 6.2 - Market-Targeting
Strategies

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Market Targeting

The PUMA
Factory
sneaker
customizati
on Web site

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Choosing a Targeting
Strategy
Factors to consider
Company resources
Product variability
Products life-cycle stage
Market variability
Competitors marketing strategies

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Socially Responsible Target
Marketing
Controversy and concern of target
marketing
Vulnerable or disadvantaged consumers
are targeted with controversial or
potentially harmful products.
Socially responsible target marketing
should be done to serve both the
interests of the company and the
interests of those targeted.

Copyright 2017 Pearson Education, Ltd. 6 - 27


Learning Objective 6-3
Summary

Four market-targeting strategies


Undifferentiated (or mass),
differentiated, concentrated (or niche),
and micromarketing

Micromarketing includes local and


individual marketing.

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Learning Objective 6-4

Discuss how companies differentiate


and position their products for
maximum competitive advantage.

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Differentiation and
Positioning
Firms must decide which segments
to target and on the value
proposition.

Product position is the way a


product is defined by consumers on
important attributes.

Copyright 2017 Pearson Education, Ltd. 6 - 30


Differentiation and
Positioning

IKEA does more


than just sell
affordable home
furnishings;
its the Life
improvement
store.

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Figure 6.3 - Positioning Map:
Large Luxury SUVs

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Choosing a Differentiation
and Positioning Strategy

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Identifying Possible Value
Differences and Competitive
Advantages
Competitive advantage: An
advantage over competitors gained
by offering greater customer value
either by
Having lower prices, or
Providing more benefits that justify
higher prices
Firms can differentiate in terms of
product, services, channels, people,
or image.
Copyright 2017 Pearson Education, Ltd. 6 - 34
Choosing the Right
Competitive Advantages

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Which Differences to Promote

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Figure 6.4 - Possible
Value Propositions

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Winning Value Propositions
Value Description
proposition
More for more Provides the most upscale
product or service
More for the High quality at lower prices
same
More for less Best winning proposition
The same for Gives a good deal
less
Less for much Meeting consumers lower
less performance or quality
requirements at a lower
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Developing a Positioning
Statement
Positioning statement: Summarizes
company or brand positioning
Format: To
(target
segment
and need)
our (brand)
is (concept)
that (point
of
difference). Copyright 2017 Pearson Education, Ltd. 6 - 39
Evernote Positioning
Statement
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 2017 Pearson Education, Ltd. 6 - 40


Communicating and
Delivering
the Chosen Position
All the companys marketing mix efforts
must support the positioning strategy.
Maintain the position obtained through
consistent performance and
communication.
The products position should be
monitored and adapted over time.

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Learning Objective 6-4
Summary
Differentiation and positioning has
three steps:
Identifying differentiations to create
competitive advantage
Choosing advantages to build a position
Selecting an overall positioning strategy

A brands full positioning is its value


proposition.

Copyright 2017 Pearson Education, Ltd. 6 - 42


Learning Objectives
6-1. Define the major steps in
designing a customer value-
driven marketing strategy: market
segmentation, targeting,
differentiation, and positioning.

6-2. List and discuss the major bases


for segmenting consumer and
business markets.
Copyright 2017 Pearson Education, Ltd. 6 - 43
Learning Objectives
6-3. Explain how companies identify
attractive market segments and
choose a market- targeting strategy.

6-4. Discuss how companies


differentiate and position their
products for maximum
competitive advantage.

Copyright 2017 Pearson Education, Ltd. 6 - 44