Chapter 7
Chapter 7
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A customer-driven marketing strategy focuses on understanding and
meeting the needs of specific customer groups through segmentation,
targeting, differentiation, and positioning.
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Segmenting the market
Targeting the right segments
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UnderstandingCustomer-DrivenMarketingStrategy
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Differentiating their offerings
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Positioning their products/services in a unique way
Geographic Segmentation Dividing the market by location (nations,
regions, cities).
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Demographic Segmentation Grouping consumers based on variables like:
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Age, Gender, Income, Occupation, Education, Religion, Race, Nationality
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Psychographic Segmentation Dividing buyers by:
Consumer Market Segmentation Social class, Lifestyle, Personality traits
Occasions When consumers buy the product
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Benefits Sought What value they seek
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Behavioral Segmentation Categorizing consumers based on their
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interactions with the product User Status First-time, regular, former buyers
Usage Rate Light, medium, heavy users
Loyalty Status Brand-switchers, loyal customers
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Industry
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Type
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Company
MarketSegmentation Consumer Market Segmentation B2B segmentation is based on: Size
Purchasing
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Behavior
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Geographic factors (countries, regions)
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Economic factors (income levels, economic stability)
. International Market Segmentation International markets are segmented based on:
Political & Legal factors (government regulations, trade policies)
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Cultural factors (languages, values, customs)
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This strategy groups customers with similar buying behaviors across
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different countries.
Intermarket Segmentation
Size & Growth Potential Is the segment large and profitable?
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Companies assess market segments based on: Structural Attractiveness Level of competition, barriers to entry
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Company Objectives & Resources Fit with business goals and capabilities
Treats the entire market as one segment
Customer-DrivenMarketing Undifferentiated Mass) Marketing Focuses on common needs rather than differences
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Strategy: Example: Coca-Cola’s original marketing approach
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MarketTargeting
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Targets multiple segments with different offers
CreatingValueforTargetCustomers Differentiated Segmented) Marketing Goal: Higher sales & stronger positioning
Example: Nike markets different shoes for runners, basketball players, and
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Targeting Strategies casual users
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Targets a small, specialized market
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Concentrated Niche) Marketing Ideal for businesses with limited resources
Example: Rolex focuses on high-end watch buyers
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Local Marketing Adapts brands to specific locations (e.g., McDonald's
menu variations worldwide)
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Micromarketing
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Individual Marketing One-to-One Marketing) Customizes products for
individuals (e.g., Nike By You custom shoes)
Product positioning refers to how a brand is perceived relative to
competitors.
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Example: Volvo Safety, Tesla Innovation, Apple Premium Design
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Competitive advantage is gained through:
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Superior benefits that justify higher prices
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Product Differentiation Unique features, design, quality (e.g., iPhone’s
Competitive Advantage ecosystem)
Service Differentiation Exceptional customer support (e.g., Amazon’s
return policy)
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Sources of Differentiation Channel Differentiation Efficient distribution (e.g., Walmart’s supply chain)
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Choosing a Differentiation & Positioning Strategy A strong differentiation strategy should be: Superior Better than alternatives
Communicable Easily understood by customers
Affordable Justifies its price
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Successfully positioning a product involves: Consistent delivery Ensuring the product meets customer expectations.
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Communicating&DeliveringthePositioning
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