Customer-Driven Marketing Strategy: Creating Value for Target Customers

Transcription

1 Customer-Driven Marketing Strategy: Creating Value for Target Customers

2 Customer-Driven Marketing Strategy: Creating Value for Target Customers Market Segmentation Market Targeting Topic Outline Differentiation and Positioning

3 Market Segmentation

4 Market Segmentation Market segmentation Dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.

5 Market Segmentation Segmenting consumer markets Segmenting business markets Segmenting international markets Requirements for effective segmentation Copyright 2014 by Pearson Education

6 Market Segmentation Segmenting Consumer Markets Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation

7 Market Segmentation Segmenting Consumer Markets Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities

8 Market Segmentation Segmenting Consumer Markets 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

9 Market Segmentation 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)

10 Market Segmentation Segmenting Consumer Markets Income segmentation divides the market into affluent, middle-income or lowincome consumers Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits

11 Market Segmentation Segmenting Consumer Markets 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

12 Market Segmentation Using Multiple Segmentation Bases PRIZM NE classifies every American household into 66 unique segments organized into 14 different social groups. Multiple segmentation is used to identify smaller, better-defined target groups

13 Market Segmentation Segmenting International markets Geographic location Politicallegal factors Economic factors Cultural factors

14 Market Segmentation Segmenting International Markets Intermarket segmentation divides consumers into groups with similar needs and buying behaviors even though they are located in different countries

15 Market Segmentation Requirements for Effective Segmentation To be useful, market segments must be: Measurable Accessible Substantial Differentiable Actionable

16 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

17 Market Targeting Evaluating Market Segments. Segment size and growth Segment structural attractiveness Company objectives and resources

18 Market Targeting Target Marketing Strategies Undifferentiated marketing targets the whole market with one offer Mass marketing Focuses on common needs rather than what s different

19 Market Targeting Target Marketing Strategies 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

20 Concentrated marketing targets a small share of a large market Market Targeting Limited company resources Knowledge of the market Target Market Strategies More effective and efficient

21 Marketing Targeting Target Market Strategies Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations Local marketing Individual marketing

22 Market Targeting Target Market Strategies Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups Cities Neighborhoods Stores

23 Market Targeting 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 Target Market Strategies

24 Depends on: Market Targeting Choosing a Target Market Company resources Product variability Product life-cycle stage Market variability Competitor s marketing strategies

25 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

26 Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions Differentiation and Positioning

27 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

28 Differentiation and Positioning 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

29 Differentiation and Positioning Choosing a Differentiation and Positioning Strategy Identifying a set of possible competitive advantages to build a position by providing superior value from: Product differentiation Service differentiation Channel differentiation People differentiation Image differentiation

30 Differentiation and Positioning Choosing the Right Competitive Advantage Difference to promote should be: Important Distinctive Superior Communicable Preemptive Affordable Profitable

31 Differentiation and Positioning Selecting an Overall Positioning Strategy Value proposition is the full mix of benefits upon which a brand is positioned

32 Differentiation and Positioning Developing a Positioning Statement To (target segment and need) our (brand) is (concept) that (point of difference)

33 Differentiation and Positioning

34 Communication and Delivering the Chosen Position Choosing the positioning is often easier than implementing the position.

35 Positioning and Targeting for Entrepreneurial Offerings: The Key Strategic Questions for any Venture What am I selling to whom and why should they buy? Positioning: What should be the perceived value of my offering compared to the competition? Targeting: Which is (are) my target segment(s)? 35

36 Market Driven Strategy Distinctive Competence Sustainable Competitive Advantage How should I be positioned? To which target market(s)? Pricing Screening ideas Product/Service development Naming the company and products Distribution Sales force Logos and stationary Promotion Public relations Advertising Raising capital Recruiting 36

37 Where Does Sustainable Advantage Come From for Entrepreneurs? 37

38 Sustainable Competitive Advantage (S.C.A.) from an Entrepreneurial Marketer s Point of View Customer s point of view Sustainable differential perceived values vs. competition comes from distinctive competence if and only if the customer perceives it! Possible Sources of S.C.A. Technology, patents Design, perceived high quality, image, customer habits Exceptional customer service, Ease of doing business with you, Reliability, Coolness Reputation, trust, &??? (Price usually isn t sustainable.) 38

39 Some Effective Value Propositions which Lever Distinctive Competence Dell for about 10 years Victoria s Secret Pom Wonderful Orvis Southwest Airlines Google David s Bridal Priceline.com Apple Starbucks Diapers.com/Soap.com/Beautybar.c om/wag.com/yoyo.com Hindustan Lever Toyota Lexus Milo.com Scancafe.com 39

40 Positioning Issues Why should a member of the target segment buy my product or service vs. the competition s? What are the unique differentiating characteristics of my product or service( the incremental value vs. the competitors) as perceived by members of the target segment(s)? Typically, humans cannot make decisions balancing more than two to four differentiating attributes at a time. Features vs. benefits 40

41 The Wharton School: An Entrepreneurial Positioning Example Globalization Cross Functional Integration Leveraging Technology Leadership The Wharton School University of Pennsylvania Global Cross-functional Leadership Technology 41

42 The Best Positioning Becomes an Offering that is an Exemplar Creates new category or subcategory Represents it to the mind of consumers Is an advocate for the new category Asahi Super Dry Beer Betty Crocker Gluten Free Cake Mixes Salesforce.com Geek Squad ESPN Zappos (Service) Is a thought leader & innovator Tide Coldwater Milo.com Invests enough to be the clear leader Source: D. Aaker, 11/30/11 Marketing News 42

43 Positioning via Names Is a name enough? It should be! A good name communicates your positioning in a memorable way 43

44 Positioning via Names 44

45 Positioning via Names 45

46 Positioning and Slogans If the name isn t enough Zappos Powered by Service Forbes: Capitalist Tool Synygy: the Incentive Compensation Company Michelin: Because So Much Is Riding on Your Tires Timken (Bearings): Precision Thinking Seiko Kinetic Watches: Someday All Watches Will Be Made This Way Since 1735 there has never been a quartz Blancpain Watch. And there never will be. Diapers.com We are number one in number two! We Deliver Everything but the Baby Like a good neighbor, State Farm is there Whatever it is you can get it on Ebay We try harder - Avis 46

47 Slogan Ground Rules* 1. Slogan can be your positioning or a mini vision statement 2. Be consistent 3. Avoid clichés Genuine Chevy, Miller, Underwear Ultimate Staples, Raincoats Take a stand Blancpain 5. Use numbers, but have them backed up 6. Beware of a boomerang effect -- Nike: Just Do It Foreign Labor Practices Ford: Quality is Job One 7. Be brief Honda: Simplify Hertz: Exactly 8. Make it your own FedEx: When it Positively, Absolutely has to. * Adapted from R. W. Keidel, Wall Street Journal, June 16,

48 Case Study: Tandem s East (Lodish et al, 2001)

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51 An Entrepreneurial Positioning Example: Wharton Business school (Lodish et al., 20010

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53 Positioning and Slogans (Lodish et al., 2001)