LEARNING OBJECTIVES

 Define the major steps in designing a customer value–driven marketing

strategy: market segmentation, targeting, differentiation, and positioning.

 List and discuss the major bases for segmenting consumer and business
markets.

 Explain how companies identify attractive market segments and choose a

market-targeting strategy.

 Discuss how companies differentiate and position their products for maximum
competitive advantage.

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MARKETING STRATEGY

 Marketing strategy
 The marketing logic by which the company hopes to create customer value
and achieve profitable customer relationships.

 Development of marketing strategy

Product-variety
Mass marketing Target marketing
marketing

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CUSTOMER VALUE–DRIVEN MARKETING
STRATEGY

CUSTOMER VALUE–DRIVEN MARKETING STRATEGY

Select customers to serve Decide on a value
proposition
1 3
Segmentation Differentiation
Divide the total market into Differentiate the market
smaller segments offering to create superior
Create value customer value
for targeted
Targeting customers Positioning
Select the segment or Position the market
segments to enter offering in the minds of
target customers
2 4

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1. MARKET SEGMENTATION

 Market segmentation
 divide large, diverse markets into smaller, more defined segments
 who have different needs, characteristics, or behaviors
 who might require separate marketing strategies or mixes.

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MARKET SEGMENTATION

 Market segment
 A group of buyers that share similar characteristics such as
demographics, interests, needs, or location or similar
behavioral responses to marketing programs.

Yomost
Enfamama Enlene
Enfa grow

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SEGMENTATION VARIABLES

Segmentation variables

Geographic Demographic Psychographic Behavioral

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 GEOGRAPHIC SEGMENTATION
 Geographic segmentation
 Dividing a market into different geographical
units, such as nations, states, regions, counties,
cities, or even neighborhoods.
 Examples:
• Nations
• Regions/Cities
• Neighborhoods
• Population size
• Population density (urban, suburban, rural)
• Climate

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DEMOGRAPHIC SEGMENTATAION

 Demographic segmentation
 Dividing the market into segments based on variables such as:
• Age  Education

• Life-cycle stage  Religion

• Gender  Ethnicity

• Occupation  Generation

• Income  Nationality

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DEMOGRAPHIC SEGMENTATAION

 Age and life-cycle stage

 Toys, food, consumer products, clothing, etc.
 Gender
 Clothing, cosmetics, toiletries, toys, magazines, etc.
 Income
 Automobiles, clothing, cosmetics, financial services, travel, etc.
 Occupation

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PSYCHOGRAPHIC SEGMENTATION

 Psychographic segmentation
 Dividing a market into different segments based on lifestyle, personality
characteristics or social status.

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BEHAVIORAL SEGMENTATION

 Behavioral segmentation
 Dividing a market into segments based on
consumer knowledge, attitudes, uses of a
product, or responses to a product.
 Examples:
• Occasions
• Benefits
• User status
• Usage rate
• Loyalty status

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USING MULTIPLE SEGMENTATION BASES

 Using Multiple Segmentation Bases

Demographic

Geographic

Geographic Demographic Psychographic Behavioral

Psychographic

Behavioral

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MULTIPLE SEGMENTATION BASES
BUSINESS MARKET SEGMENTATION

 Segmentation variables
 Business market segmentation variables
• Geographic
• Demographic (industry, company size)
• Benefits sought; User status; Usage rate; Loyalty status
 Other variables
• Customer operating characteristics
• Purchasing approaches
• Situational factors
• Personal characteristics

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INTERNATIONAL MARKET SEGMENTATION

 Segmentation variables
 Geographic location (regions)
 Economic factors (income levels; level of economic development)
 Political and legal factors (type and stability of government, receptivity to
foreign firms, monetary regulations, and amount of bureaucracy
 Cultural factors (common languages, religions, values and attitudes,
customs, and behavioral patterns)
 Intermarket/Cross-market segment
 Forming segments of consumers who have similar needs and buying
behaviors even though they are located in different countries.

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REQUIREMENTS FOR EFFECTIVE SEGMENTATION

 Measurable  Differentiable
 The size, purchasing  The segments are
power, and profiles of conceptually
the segments can be distinguishable and
measured. respond differently to
different marketing mix
 Accessible
elements and programs.
 The market segments
can be effectively  Actionable
reached and served.  Effective programs can
be designed for
 Substantial attracting and serving
 The market segments the segments.
are large or profitable
enough to serve.
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2. MARKET TARGETING
InterContinental Hotels Group
 Market targeting
 Evaluate the various
segments and decide how
many and which segments
the company can serve best.

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EVALUATING MARKET SEGMENTS

 In evaluating different market segments, a firm must look at

three factors:

Company
Segment size and Segment structural
objectives and
growth attractiveness
resources

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EVALUATING MARKET SEGMENTS
 Segment structural attractiveness

(Michael Porter, 1985)

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MARKET TARGETING

 Selecting Target Market Segments

Micromarketing
Undifferentiated Differentiated Concentrated
(local or
(mass) (segmented) (niche)
individual
marketing marketing marketing
marketing)

Targeting Targeting
broadly narrowly

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MARKET TARGETING
 Undifferentiated marketing (or 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.
 Focus on what is common in the needs of consumers rather than on what is
different

Marketing mix The whole market

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MARKET TARGETING
 Differentiated marketing (or segmented
marketing)
 A market-coverage strategy in which a firm
targets several market segments and designs
separate offers for each.

Marketing mix 1 Segment 1

Marketing mix 2 Segment 2

Marketing mix 3 Segment 3

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MARKET TARGETING

 Concentrated marketing (or niche marketing)

 A market-coverage strategy in which a firm goes after a large share of one
or a few segments or niches.

Phối thức marketing 1 Segment 1

Segment 2
Marketing mix
(Target market)

Phối thức marketing 3 Segment 3

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MARKET TARGETING
 Micromarketing
 Tailoring products and
marketing programs to the
needs and wants of specific
individuals and local customer
segments; it includes:
• local marketing
• individual marketing

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MARKET TARGETING

 Choosing a Targeting Strategy

Niche Mass Differentiated
marketing marketing marketing
Company resources Limited
Substantial
Product variability Low
High
Product life-cycle stage Introduction
Maturity
Market variability Low
High
Competitors’ marketing strategies Undifferentiated
Differentiated

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DIFFERENTIATION & POSITIONING

 Differentiation
 The process companies use to make a
product or service stand out from its Product’s position
competitors in ways that provide Perceptions
unique value to the customer. Impressions
Feelings

 Product position
 The way a product is defined by
consumers on important attributes—the
place the product occupies in
consumers’ minds relative to
competing products

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DIFFERENTIATION AND POSITIONING STRATEGY

 Perceptual positioning map

 Show consumer perceptions of their
brands versus competing
products on important buying
dimensions.
 Help marketers in coming up
with the appropriate positioning
strategy, which may involve
developing new competitive
advantages or optimizing existing
ones.

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DIFFERENTIATION AND POSITIONING STRATEGY

 The differentiation and positioning task consists of:

Identify a set of Develop and

Choose the right Select an overall
differentiating communicate a
competitive positioning
competitive positioning
advantages strategy
advantages statement

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DIFFERENTIATION AND POSITIONING STRATEGY
 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.
 Points of differentiation:
Product differentiation: features, performance, or style and design.

Services differentiation: speedy, convenient, high-quality service.

Channel differentiation: coverage, expertise, and performance.

People differentiation: hiring and training human resources.

Image differentiation: logo, endorsers, colors, symbols, characters, etc.

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 DIFFERENTIATION AND POSITIONING STRATEGY

 Choosing the right competitive advantage

 Difference to promote should be:
1. Important: The difference delivers a highly valued benefit to
target buyers.
2. Distinctive: Competitors do not offer the difference, or the
company can offer it in a more distinctive way.
3. Superior: The difference is superior to other ways that
customers might obtain the same benefit.
4. Communicable: The difference is communicable and visible to
buyers.
5. Preemptive: Competitors cannot easily copy the difference.
6. Affordable: Buyers can afford to pay for the difference.
7. Profitable: The company can introduce the difference
profitably.

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DIFFERENTIATION AND POSITIONING STRATEGY

 Selecting an overall positioning strategy

PRICE
More The same Less

More More More

More
BENEFITS

for more for the same for less

The same
The same
for less

Less
Less
for much less

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DIFFERENTIATION AND POSITIONING STRATEGY

 Developing a positioning statement

 Positioning statement
• A statement that summarizes company or brand positioning.
 Structure:

To [TARGET SEGMENT AND NEED], our [BRAND] is [CONCEPT]

that [POINT OF DIFFERENCE].

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DIFFERENTIATION AND POSITIONING STRATEGY

 Communicating and delivering the chosen

position MARKETING MIX
 Take strong steps to deliver and communicate Tangible products
the desired position to its target consumers.  Price
 Place
 All the company’s marketing mix efforts must
 Product
support the positioning strategy.
 Promotion
 Involve working out the tactical details of the
Services
positioning strategy.
 Process
 Physical Evidence
 People

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FINAL GROUP ASSIGNMENT
 Outline (to be continued)
1. INTRODUCTION
• About the company and its product lines/product portfolio
• About the brand
2. MARKETING ENVIRONMENT ANALYSIS
• Micro-environment
SWOT
• Macro-environment
3. TARGET MARKETING STRATEGY
• Market segmentation: Analyse segmentation bases the company uses to segment
its market.
• Identify the company’s targeting strategy and describe the characteristics of its
target market segment(s).
• Positioning: Specify the company’s competitive advantages and its positioning
statements.

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