Principles of Marketing

(MKT101)
Instructor: Dr. Salma Akter
(Assistant Professor)
CHAPTER 7
CUSTOMER-DRIVEN
MARKETING STRATEGY
Customer Driven Marketing
Strategy

Figure
7.1
 Market Segmentation

Market Segmentation is the process of

dividing a market into smaller segments of
buyers with distinct needs, characteristics or
behaviors that might require separate
marketing strategies or mixes

Differentiation &
Segmentation Targeting
Positioning
 4 Important Segmentation Topics

Segmenting consumer markets

Segmenting business markets

Segmenting international markets

Requirements for effective
segmentation

Differentiation &
Segmentation Targeting
Positioning
Segmenting Consumer Markets

Geographi Demograp
c hic
segmentat segmentat
ion ion

Psychograp Behaviora
hic l
segmentati segmentat
on ion

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation

• Geographic
segmentation divides
the market into different
geographical units such
as nations, regions,
states, counties, or cities

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation -
Example

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation – Example
McDonalds in India

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation – Example
McDonalds in Malaysia

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation – Example
McDonalds in Portugal

Differentiation &
Segmentation Targeting
Positioning
 Geographic Segmentation – Example
Pepsi in Arabic Speaking Countries

Differentiation &
Segmentation Targeting
Positioning
 Demographic Segmentation

• Demographic
segmentation divides
the market into groups
based on variables such
as age, gender, family
size, family life cycle,
income, occupation,
education, religion, race
and generation.
Differentiation &
Segmentation Targeting
Positioning
 Demographic Segmentation

Demographic
Segmentation

Age and Life-

Gender Income
Cycle

Differentiation &
Segmentation Targeting
Positioning
Damographic Segmentation – Example
Age and Life-Cycle

Differentiation &
Segmentation Targeting
Positioning
Damographic Segmentation – Example
Gender

Differentiation &
Segmentation Targeting
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Damographic Segmentation – Example
Income

Differentiation &
Segmentation Targeting
Positioning
 Psychographic Segmentation

• Psychographic
Segmentation divides
the market into different
segments based on
social class, interests,
attitudes, lifestyle or
personality
characteristics.

Differentiation &
Segmentation Targeting
Positioning
 Psychographic Segmentation – Example
STAR India Private Limited
• Star India segments its markets based on the
interests of its viewers. For example:

Hindi TV A Series of English

Shows & Channels for Language TV
General Sports Lovers Shows &
Entertainment General
Entertainment
 Behavioral Segmentation
Behavioral segmentation divides buyers into groups
based on their knowledge, attitudes, uses, or
responses to a product.

Behavioral segmentation can be based on a

consumer’s:
– Occasions
– Benefits sought
– User status
– Usage rate
– Loyalty status

Differentiation &
Segmentation Targeting
Positioning
 Behavioral Segmentation -
Occasions

Differentiation &
Segmentation Targeting
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 Behavioral Segmentation –
Benefits Sought

Differentiation &
Segmentation Targeting
Positioning
Behavioral Segmentation – User
Status
Segmentation:
• Non-users
• Ex-users
• Potential users
• First-time users
• Regular users

Differentiation &
Segmentation Targeting
Positioning
 Behavioral Segmentation – Usage
Rate
Segmentation:
• Light User
• Medium User
• Heavy User

Differentiation &
Segmentation Targeting
Positioning
 Behavioral Segmentation –
Loyalty Status
• Consumers can be loyal to brands, stores and
companies
• Buyers can be divided into groups according
to their loyalty
• A study shows that loyal customers’ passion is
‘contagious’
• Loyal customers promote their favorite brands
through: YouTube, Blogs, and fan Websites
Differentiation &
Segmentation Targeting
Positioning
 Requirements for Effective
Segmentation
To be useful, market segments must be:

Measurabl Substantia
e Accessible l

Differentia
Actionable
ble

Differentiation &
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 Market Targeting

Target market consists of a set of

buyers who share common needs or
characteristics that the company
decides to serve

Differentiation &
Segmentation Targeting
Positioning
Selecting Target Market Segments

Differentiate
Undifferentia Concentrated
d Micromarketi
ted (Mass) (Niche)
(Segmented) ng
Marketing Marketing
Marketing

Differentiation &
Segmentation Targeting
Positioning
 Undifferentiated Marketing
• A market-coverage strategy in which a firm
decides to ignore market segment differences
and go after the whole market with one offer.
• Also known as Mass marketing
• Focuses on common needs rather than what’s
different

Differentiation &
Segmentation Targeting
Positioning
 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

Differentiation &
Segmentation Targeting
Positioning
 Concentrated Marketing
• A market-coverage strategy in which a firm
goes after a large share of one or a few
segments or niches.
• Also known as Niche marketing

Differentiation &
Segmentation Targeting
Positioning
 Micromarketing
• Micromarketing is the practice of tailoring
products and marketing programs to suit the
tastes of specific individuals and locations. It
includes:
– Local marketing
– Individual marketing

Differentiation &
Segmentation Targeting
Positioning
 Micromarketing
• Local marketing involves tailoring brands and
promotion to the needs and wants of local customer
segments – cities, neighborhoods and even specific
stores
• Individual marketing involves tailoring products
and marketing programs to the needs and preferences
of individual customers.
– One-to-one marketing
– Mass customization
– Markets-of-one marketing
Differentiation &
Segmentation Targeting
Positioning
 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
• A positioning map (or perceptual map) shows
consumer perceptions of their brands versus
competing products on important buying
dimensions Differentiation &
Segmentation Targeting
Positioning
Sample Positioning Map: Chocolate Brands
 Selecting an Overall Positioning
Strategy
Price
More The Same Less

More More for More for the More for

More Same Less
Benefits

The Same
The Same for Less

Less Less for

Much Less

Differentiation &
Segmentation Targeting
Positioning
 Positioning Statement
• A positioning statement is a statement that
summarizes company or brand positioning.
• A format of positioning statement:
– To (target segment and need) our (brand) is (concept) that
(POD)
• Sample Positioning Statement:
– Evernote:
“To busy multitaskers who need help remembering
things……”
Differentiation &
Segmentation Targeting
Positioning
 Positioning Statement
For upscale American families, Volvo is the
family automobile that offers maximum safety.

To busy multi-taskers who need help

remembering things…
For World Wide Web users who enjoy books, Amazon.com is a
retail bookseller that provides instant access to over 1.1
million books. Unlike traditional book retailers, Amazon.com
provides a combination of extraordinary convenience, low
prices, and comprehensive selection. (2001)
Differentiation &
Segmentation Targeting
Positioning