Customer-Driven Marketing Strategy, Supply Chain & Logistics Management

GROUP 8

 Customer-Driven

Major steps in designing a customer-driven marketing strategy:

 market segmentation,
 targeting,
 differentiation, and positioning

 Customer-Driven Marketing Strategy

The four major steps in designing a customer-driven marketing strategy.

1. Market segmentation: requires dividing a market into smaller segments with distinct needs,
characteristics, or behaviors that might require separate marketing strategies or mixes.

 Segmenting Consumer Markets:

Market Segmentation

1. Geographic segmentation

 Dividing a market into different geographical units such as nations, provinces,

regions, parishes, cities, or neighborhoods.

 Examples:

 World region or country: Western Europe, Middle East, Pacific Rim, China, India,
Canada, Mexico, North America

 Country region: East Asia, South Asia, North Asia

 Density: Urban, suburban, exurban, rural

2. Demographic segmentation
 Dividing the market into groups based on variables such as age, gender, family
size, family life cycle, income, occupation, education, religion, race, generation,
and nationality.

a. Examples:

b. Age: Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+

c. Gender: Male, female

d. Family life cycle: Young, single; married, no children; married with children; single
parents, unmarried couples; older, married, no children under 18; older, single; other

e. Income: Under $20,000; $20,000-$30,000; $30,000-$50,000; $50,000-$100,000;

$100,000-$250,000; $250,000 and over

3. Psychographic segmentation
 Dividing a market into different groups based on social class, lifestyle, or
personality characteristics.

a. Examples:

b. Social class: Lower lowers, upper lowers, working class, middle class, upper middles,
lower uppers, upper uppers

c. Lifestyle: Achievers, strivers, survivors

d. Personality: Compulsive, gregarious, authoritarian, ambitious

 4. Behavioral segmentation

 Dividing a market into groups based on consumer knowledge, attitudes, uses, or

responses to a product.

a. Examples:

b. Occasions: Regular occasion; special occasion; holidays; seasonal

c. Benefits: Quality, service, economy, convenience, speed

d. User status: Nonuser, ex-user, potential user, first-time user, regular user

e. User rates: Light user, medium user, heavy user

Segmentation International Markets:

5. Intermarket segmentation

 Forming segments of consumers who have similar needs and buying behavior
even though they are located in different countries.

Requirements for Effective Segmentation:

6. Measurable: not too hard to identify and measure

7. Accessible: effectively reached and served

8. Substantial: large or profitable enough to serve

9. Differentiable: worthy to separate segments

10. Actionable: possible to develop separate marketing programs

Market Targeting:

 Target market: A set of buyers sharing common needs or characteristics that the company
decides to serve.

 Selecting Target Market Segments:

Evaluating Market Segment Three factors:

a) Segment size and growth

b) Segment structural attractiveness: competitors, substitute products, power of buyers,
powerful suppliers
c) Company objectives and resources

Target Selection Strategies:

1. Undifferentiated(mass) Marketing
 A market-coverage strategy in which a firm decides to ignore market segment
differences and go after the whole market with one offer.
 Focuses on what is common in the needs of consumers rather than on what is
different.

2. Differentiated(segmented) Marketing

 A market-coverage strategy in which a firm decides to target several market

segments and designs separate offers for each.
 More expensive than undifferentiated marketing

3. Concentrated(niche) Marketing

 targets a large of a smaller market.

a) Limited company resources

b) Knowledge of the market

c) More effective and efficient

4. Micromarketing

 The practice of tailoring products and marketing programs to the needs and
wants of specific individuals and local customer groups-includes local
marketing and individual marketing.

I. Local Marketing
 Tailoring brands and promotions to the needs and wants of
local customer groups--cities, neighborhoods, and even
specific stores.
II. Individual Marketing
 Tailoring products and marketing programs to the needs and
preferences of individual customers-also labeled “one-to-one
marketing,” “customized marketing,” and “markets-of-one
marketing.”
Choosing a targeting strategy depends on:

1. Company resources

2. Product variability

3. Product life-cycle stage

4. Market variability

5. Competitor’s marketing strategies

Differentiation and Positioning

 Product position is the way the product is defined by consumers on important attributes.

 Positioning maps show consumer perceptions of marketer’s brands versus competing products
on important buying dimensions.

INTEGRATING SUPPLY CHAIN AND LOGISTICS MANAGEMENT:

 Relating marketing Channels, Logistics, and Supply Chain Management

1. Logistics

2. Logistics Management

3. Supply Chain

4. Supply Chain Management

 SUPPLY CHAIN AND LOGISTICS MANAGEMENT

 Logistics: Those activities that focus on getting the right amount of the right products to
the right place at the right time at the lowest possible price.

 Logistics Management: The practice of organizing the cost-effective flow of raw

materials, in-process inventory, finished goods, and related information from point of
origin to point of consumption to satisfy customer requirements.

 Supply Chain: A sequence of firms that perform activities required to create and deliver
a good or service to consumers or industrial users.

 Supply Chain Management: The integration and organization of information and logistic
activities across firms in a supply chain for the purpose of creating and delivering goods
and services that provide value to customers.
Aligning a Supply Chain with Marketing Strategy:

1. Understand the customer

2. Understand the supply chain
3. Harmonize the supply chain with
the marketing strategy

Supply chain managers balance total logistics cost factors against customer service factors:

Advantages and disadvantages of five modes of transportation: