Marketing for Hospitality and

Tourism
8th Edition

Chapter 8
Customer-Driven Marketing
Strategy: Creating Value for Target
Customers

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Learning Objectives
• 8.1 Define the major steps in designing a customer-driven marketing strategy.

• 8.2 List and discuss the major bases for segmenting consumer markets.

• 8.3 Explain how companies identify attractive market segments and choose a market-
targeting strategy.

• 8.4 Discuss how companies differentiate and position their products for competitive
advantage.

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Figure 8-1 Steps in Segmentation,
Targeting, and Positioning

Figure 8-1 Steps in segmentation, targeting, and positioning.

Page 206

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Market Segmentation
• Geographic segmentation
– Nations, states, regions, counties, cities, neighborhoods, population density,
climate

• Demographic segmentation
– Age, life-cycle stage, gender, income, occupation, education, religion, ethnicity,
generation

• Psychographic segmentation
– Social class, lifestyle, personality

• Behavioral
– Occasions, benefits, user status, usage rate, loyalty status

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Multiple Segmentation Bases
• Create smaller, better defined target groups

• Merge other segmentation systems

– Zip codes, neighborhoods, households

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Effective Segmentation
• Measurability
– Degree to which segment’s size and purchasing power can be measured

• Accessibility
– Degree to which segment can be assessed and served

• Sustainability
– Degree to which segment is large or profitable enough to serve as market

• Actionability
– Degree to which effective programs can be designed for attracting and serving
segments

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Market Targeting
• Evaluate market segments
– Size and growth
– Structural attractiveness
▪ Degree of competition
▪ Number of substitute products
▪ Power of buyers
– Company objectives and resources

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Figure 8-2 Three Alternative Market-
Coverage Strategies

Figure 8-2 Three alternative market-coverage strategies

Page 218

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Selecting Market Segments
• Undifferentiated marketing
– Ignores market segmentation and goes after entire market with one market offer
– Focuses on common needs rather than differences

• Differentiated marketing
– Target several segments with specific offerings for each

• Concentrated marketing
– Focuses on grabbing a large share of one or a few small markets
– Appealing to companies with limited resources

• Micromarketing
– Local marketing
– SoLoMo

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Choosing a Market-Coverage
Strategy
• Company resources

• Degree of product homogeneity

• Product life-cycle stage

• Market homogeneity

• Competitors’ strategies

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Market Positioning
• Value proposition
– Create differentiated value for target markets

• Product position
– How the product is defined by consumers on important attributes
– Relative to the competition

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Positioning Strategy
• Specific product attributes

• Emotional appeal

• Compared to product class

• Competitive advantage

• Effective communication

• Avoid positioning errors

– Underpositioning
– Overpositioning
– Confused positioning

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Differentiation
• Qualities
– Important, distinctive, superior, communicable, preemptive, affordable, profitable

• Elements
– Physical attribute, service, personnel, location, image

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Figure 8-3 Positioning Map of
Service Level versus Price

Figure 8–3 Positioning map of service level versus price.

Page 227

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Copyright

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