• | Session VI | Shumaila Kashif Ph.D.

| Session VI | Shumaila Kashif Ph.D.

Part III Designing Customer

Value-Driven Marketing
Strategy and Mix

Chapter # 7

Customer Value-Driven
Marketing Strategy: Creating
Value for Target Customers
 • | Session VI | Shumaila Kashif Ph.D.

Outline
6.1 Define the major steps in designing a customer value-driven
marketing strategy: market segmentation, targeting,
differentiation, and positioning.
6.2 Discuss the major bases for segmenting consumer and
business markets.
6.3 Explain how companies identify attractive market segments
and choose a market-targeting strategy.
6.4 Discuss how companies differentiate and position their
products for maximum competitive advantage.
 • | Session VI | Shumaila Kashif Ph.D.

Facebook (Meta) : Targeting the Diverse Needs of

Different Social Media Segments
Thanks to successful segmentation and targeting,
Facebook/Meta’s four huge social media platforms—
Facebook, Instagram, WhatsApp, and Messenger—now
constitute four or the world’s top five social media brands.
 • | Session VI | Shumaila Kashif Ph.D.

Designing a customer value-driven Marketing

Strategy
Major Segmentation Bases for Consumer
Markets
 Major Segmentation Bases for Consumer
Markets
Behavioral segmentation divides a market into segments
based on consumer knowledge, attitudes, uses of a
product, or responses to a product.

Occasions : when they get the idea to buy, purchase or use

Benefit Sought : seeking different benefit from a product

User status : non-users, ex-users, potential users, first time

users, and regular users

Usage Rate : Light medium or heavy

Loyalty status : brands, stores and companies – degree of

loyalty
Benefit Sought segmentation: Qarshi Products
“Johar Joshanda” is designed for consumers
who look for herbal relief
 Major Segmentation Bases for Consumer
Markets
Using multiple segmentation bases
Segmenting Business Markets
Consumer and business marketers use many of the same
variables to segment their markets.
Additional variables include:
• Customer operating characteristics
• Purchasing approaches
• Situational factors
• Personal characteristics
Example of Business
segmentation
 Segmenting International Markets
Geographic locations, economic factors,
International cultural etc.

Segmentation Intermarket segmentation involves

forming segments of consumers who
have similar needs and buying behaviors
even though they are located in different
countries.

Intermarket segmentation: Today’s

technologies let fast-fashion retailer Zara
target like-minded style conscious but
value-seeking consumers anywhere in the
world they live.
 Requirements for effective segmentation
1. Measurable. The size, purchasing power, and profiles of the segments can be measured.
2. Accessible. The market segments can be effectively reached and served.
3. Substantial. The market segments are large or profitable enough to serve. A segment
should be the largest possible homogeneous group worth pursuing with a tailored
marketing program. It would not pay, for example, for an automobile manufacturer to
develop cars especially for people whose height is greater than seven feet.
4. Differentiable. The segments are conceptually distinguishable and respond differently to
different marketing mix elements and programs. If men and women respond similarly to
marketing efforts for soft drinks, they do not constitute separate segments.
5. Actionable. Effective programs can be designed for attracting and serving the segments.
For example, although one small airline identified seven market segments, its staff was
too small to develop separate marketing programs for each segment.
What are the requirements for effective segmentation?

• Segment Size and growth

• Structural attractiveness (long term, aggressive competitors, easy for
new entrant, substitute products, powerful suppliers etc.)
• Company objectives and resources
Marketing Targeting
After marketers are done with segmentation (division of people) the
select the groups they want to target. This process is known as Target
Marketing or Marketing targeting.
Cocacola same product for
masses

For example Friesland compania

Engro Pakistan markets at least two
different milk brands in the Pakistan
(Olpers full cream, Powder, lite,
Ecolean, Dairy Omug), which
compete with each other on Only for people on diet
or weightloss goals local customer segments
supermarket shelves. Then further
segments each milk brand to serve Eg:silver screen cable, nomi Ansari,
even narrower niches. Local neighbourhood salons
 Target Marketing Strategies
• Undifferentiated marketing targets the whole market with one offer
• Mass marketing
• Focuses on common needs rather than what’s different
• 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
• Concentrated marketing targets a small share of a large market because of Limited company resources, Knowledge of the
market. Choosing the right proposition is important.
• Micromarketing is the practice of adapting products and marketing programs to suit the tastes of specific individuals and
locations, Local marketing, Individual marketing
• Local marketing involves modifying brands and promotion to the needs and wants of local customer groups, Cities,
Neighborhoods, Stores, ex: ISM, Amis etc.
• Individual marketing involves modifying products and marketing programs to the needs and preferences of individual
customers
• Also known as:
• One-to-one marketing
• Mass customization
Choosing a Target Market

Depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Socially responsible targeting: In this era of
Competitor’s marketing strategies increased social responsibility, marketers must
consider not just whether targeted consumers
buy and like their products but also whether they
use them wisely.
Differentiation and 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 .
Perceptions
• Impressions
• Feelings

Positioning: Spotify
does more than just
stream music. It
gives you “Music for
every mood.”
Differentiation and
Positioning

Challenge : create differentiated value

for targeted segments and what
position it wants to occupy in those
segments.
Not leave to chance
Positioning maps show consumer
perceptions of their brands versus
competing products on important
buying dimensions
 Perceptual Mapping
Positioning maps show consumer perceptions of
marketer’s brands versus competing products on
important buying dimensions.
Choosing a Differentiation and Positioning
Strategy

1 2 3 4
Identifying a set of Choosing the right Selecting an overall Communicating and
possible competitive competitive positioning strategy delivering the
advantages to build advantages chosen position to
a position the market

Competitive advantage An advantage over competitors gained by offering greater customer value
either by having lower prices or providing more benefits that justify higher prices.
 Choosing a Differentiation Strategy
A company can and
Choosing a Differentiation differentiate its market
Positioning offerings in any of many
Strategy
dimension, including
Identifying a set of possible competitive advantages to differentiate along the lines of:
1. Product differentiation
Product features, performance, style and design etc.
Services 2. Service differentiation
Channels outstanding customer service

People 3. Channel differentiation

Coverage, expertise and performance
Image
4. People differentiation
Hiring and training better people
5. Image differentiation
distinctive benefits and positioning
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
“The Journey Never Stops.” At IHOP, you “Come hungry. Leave happy”
Choosing the Right Competitive Advantage

Difference to promote should be:

Important Distinctive

Superior Communicable

Pro-active Affordable

Profitable
 Choosing the Right Competitive Advantage
How many differences to promote?
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible competitive advantages to differentiate along the lines of:
Which differences to promote?
Product
Services
Channels
People
Image
 Selecting an Overall Positioning Strategy

Value proposition is the full mix of benefits upon

which a brand is positioned

Example: MAC AIR

• Apple’s tagline will forever be, “Think
Differently.”

• Our goal with MacBook was to do the impossible:

engineer a full size experience into the lightest
and most compact Mac notebook ever. This is
their Value Proposition
 • More for More. More-for-more positioning involves providing the most upscale
product or service and charging a higher price to cover the higher costs. A more-for-
more market offering not only offers higher quality, it also gives prestige to the buyer.
It symbolizes status and a loftier lifestyle. Four Seasons hotels, Patek Philippe
Setting a value watches, Starbucks coffee, Louis Vuitton handbags, Mercedes automobiles, SubZero
appliances—each claims superior quality, craftsmanship, durability, performance, or
style and therefore charges a higher price.
proposition • More for the Same. A company can attack a competitor’s value proposition by
positioning its brand as offering more for the same price. For example, Target
positions itself as the “upscale discounter.”
• The Same for Less. Offering the same for less can be a powerful value proposition—
everyone likes a good deal. Discount stores such as Walmart and “category killers”
such as Best Buy, PetSmart, David’s Bridal, and DSW Shoes use this positioning.
• Less for Much Less. A market almost always exists for products that offer less and
therefore cost less. Few people need, want, or can afford “the very best” in
everything they buy. In many cases, consumers will gladly settle for less-than-optimal
performance or give up some of the bells and whistles in exchange for a lower price.
• More for Less. Of course, the winning value proposition would be to offer more for
less. Many companies claim to do this. And, in the short run, some companies can
actually achieve such lofty positions. For example, when it first opened for business,
Home Depot had arguably the best product selection, the best service, and the
lowest prices compared with local hardware stores and other home-improvement
chains.
Developing a Positioning Statement
•For (TA), who (statement of unsolved
customer needs), our product us (short
but vivid description the product). Unlike
(key competing brands), our product (key
point of differences).

• For example:
To clear dandruff problems of TM ALL
CLEAR shampoo has added quick dry oils
which gives instant relief and saves your
hair from falling or looking oily in
competitive pricing.
 Diabolo gives you the best taste yet guilt free pleasure so that you
guilt free pleasure can stay in control of your health using premium pricing.
 Create Value for Target Customers using Customer-Driven Marketing Strategy.

Steps:
1. Choose a product

Learning
2. Choose the market segmentation
National: (Demographic, Geographic, Geodemographic, Physiographic or behavioral)

Assignment International: (Geographic, Economical, Political/legal or Cultural)

3. Explain the Target Market
(Undifferentiated, differentiated, concentrated, micro, individual, local)
4. Competitive advantage
5. Value Proposition using differentiation strategy
(product, service, people, channel, image)
6. Present your positioning statement
 How to apply

Market share
market segmentation
4PS
SWOT
 How to select a target market?

We can segment
consumer markets
geographic; demographic;
using many different
variables which include:

geodemographic; psychographic; behaviour patterns.

 CLASS
ASSIGNMENT
• Create an idea of a new product
• Suggest a Target Market use proper segmentation this time
• Explain the Buyer Decision Making Process