Ch-7: CUSTOMER DRIVEN

MARKETING STRATEGY
 P&G stands for _________?

 Unilever launched 7 new brands in 2011

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STP
 Segmentation combining prospective
buyers into groups that
 1) have common needs and
 2) will respond similarly to a marketing action
 Targeting
 Differentiating
 Positioning the place the product occupies in
consumers’ minds on important attributes
relative to competing products

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MARKET
SEGMENTATION
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for Effective Segmentation

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 SEGMENTING CONSUMER MARKETS
Table 7.1
 Geographic Segmentation
e.g. Videogames Regional e.g. Biohazard/Resident Evil
 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
 Age and Life-Cycle Stage
e.g. Toys for 4-year and 12-year
 Gender
Key gender differences e.g. Vision, integrity, multitasking
Used mainly in: Clothing, cosmetics, magazines.
 Income
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Automobile. Clothing etc.
 Psychographic Segmentation
Lifestyle, values, personality
e.g. Tezdum ‘lagae tha ker kae’
 Behavioral Segmentation
 Occasion Segmentation e.g. Eid special
 Benefit Segmentation e.g. shampoo (dandruff, hairfall)
 User Status – non-user, ex-user, regular, occasional
 Usage Rate – light, medium, heavy
 Loyalty Status (brand) – no, little, high etc.
Using multiple segmentation bases
E.g. Geodemographic
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 Many newspapers & magazines have multiple
editions e.g. Dawn has separate edition for Lahore
and Karachi
 Warid advertises that if you’ve not used your SIM
since January 2013 then recharge it for extra reward
 Engro Foods has following different UHT milk
brands
▪ Olper’s
▪ 1. Geographic
Olwell
2. Demographic
▪ Owsum 3. Psychographic
▪ Tarang 4. Behavioral (occasion, benefit,
▪ Omang user status, usage rate, loyalty)

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 Advertising manager of a consumer electronics co.
said “I would say that psychographics are a
fabrication (lie)…, we are targeting 18-25 year with
DVDs, with LCDs we are targeting older higher
income people.” Do you agree with the advertising
manager’s views about demographic versus
psychographic segmentation? Why or why not?
 The director of marketing for Gulshan-e-Iqbal Park
came to know that there is a significant projected
increase of senior citizens in theme parks for next
5-10 years. How might the company respond to
this demographic information? (try to view the
required changes in marketing mix)
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 Most airlines have frequent-flyer programs
designed to appeal to heavy users of air
travel and to generate increased brand
loyalty. The rental car companies have
begun to implement similar programs.
Should retailers of apparel undertake
similar frequent-buyer programs or are
there other bases for segmenting and
targeting that make more sense for apparel
marketers? 9
 Segmenting Business Markets
 Geographically
 Demographically (industry, company size)
 Benefits sought
 Segmenting International Markets
 Coke and Sony sell in 200+ countries
 Countries in same geography may vary in traits and
behaviors e.g. North America etc.
 On the basis of Political, Economic and Cultural
Intermarket (cross-market) segmentation Forming
segments of consumers with similar needs even if
they are in different countries 10
 Requirements for Effective Segmentation
 Measurable
 Accessible
 Substantial – for profit
 Differentiable – from other segments
 Actionable – organization should be able to serve
it (availability of staff/resources etc.)

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 TARGETING
 Evaluating Market Segments
 1. Segment size and growth
 2. Attractiveness of segment (5-forces)
 3. Company’s objectives and resources

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Selecting Target Market Segments

 Target Market

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 Undifferentiated (Mass) Marketing: focus
on common needs rather than differences
 Differentiated (Segmented) Marketing:
Choosing several segments e.g. P&G,
Unilever, Toyota etc.
 Costly
 Concentrated (Niche) Marketing:
 More effective and efficient
 E.g. Zappos (only shoes & online)
 Corio
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 Micromarketing
 Local Marketing
e.g. Wal-Mart customizes its stores, Starbucks store locator
 Individual Marketing (one-to-one marketing, mass
customization, markets of one-marketing)
e.g. Dell, www.myMMs.com,
Most expensive
 Choosing a Targeting Strategy
 Company resources
 Product variability
 PLC (Product-Life Cycle) stage
 15
Application of concepts

 Explain why Gourmet Cola sells so many different drink

products, including Gourmet Cola Diet, Gourmet
Lemon up, Gourmet Apple etc.
 What is the type of segmentation in following cars?
 Ford (single colour, only type of car)
 Honda
 Customized car
 Lamborghini

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 Socially Responsible Target Marketing
 E.g. Cigarette
 Kids

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DIFFERENTIATION AND
POSITIONING
 Product Position: as defined by consumers
 the place the product occupies in consumers’ minds on
important attributes relative to competing products
“Products are created in the factory, but brands are
created in the mind”
 E.g. Cooking oil: Habib (heart friendly), Dalda
(maternal love), Tullo (healthy lifestyle)
Cars: Suzuki (economy), Mercedez (luxury), BMW
(performance), Volvo (safety), Toyota Prius (fuel-
efficient)
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 Positioning Maps

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 High price

APV

Liana

Large
Small
(family)
Cultus

Bolan
Mehran

Plus where will Alto go?

Plot Toyota’s brands? Low price (economy) 21
 Make a positioning map for softdrinks/(your chosen
brand). First list down all possible attributes then
choose the most important two and plot different
brands.

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Choosing a Differentiation and Positioning
Strategy

 Identifying Possible Value Differences and

Competitive Advantages
 Low cost leadership
 Differentiation
▪ Product Differentiation e.g. Santro (more space)
▪ Service Differentiation e.g. Free Delivery
▪ Channel Differentiation e.g. http://homeshopping.pk/
▪ People Differentiation e.g. Wi-tribe
▪ Image Differentiation e.g. Sony
Guess the competitive advantage “The impossible
dream” 23
 Competitive Advantages
 Low cost (quantity)
 Differentiation (quality)
What is more important: Quality or quantity?
 Excellence (11-page in Urdu)
http://timelenders.com/cat_view/51-workshops/39-strategic-visions

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 Choosing the right ‘competitive advantages’
 How many differences to promote?
▪ USP (Unique Selling Proposition/Point)
▪ Positioning (usually just one word)
▪ Be number one in a category/attribute
 Which differences to promote?
▪ Differences should be important, distinctive, superior,
communicable, affordable, profitable

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 Selecting an Overall Positioning Strategy
Value proposition - full mix of benefits upon which
a brand is positioned
 More for more e.g. Starbucks, Mercedez
 More for same e.g. Toyota’s Lexus (against
Mercedez)
 Same for less
e.g. Metro
 Less for much less
e.g. NasAir
 More for less
e.g. Tata Indica
(more space + fuel
economy) 26
 Developing a Positioning Statement
To (target segment and need) our (brand) is
(concept) that (point of difference).
Develop one e.g. Haleeb
 Try for your own brand
 Communicating and delivering the chosen
position
Finding a position is easier than
implementing it
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