MKTG 6111020
Marketing Management
Odd Semester 2024/2025
Chapter 7:
Customer Value-Driven Marketing Strategy:
Creating Value for Target Customers
Session Learning Outcomes
Upon completion of this session, students are expected to be able to:
1. Describe marketing mix and marketing strategy in different business
situations.
2. Use appropriate terminologies in marketing activities and business
environment.
3. Apply marketing concepts into marketing strategies in both local and
international contexts.
Customer-Driven Marketing Strategy
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Market Segmentation
Market segmentation requires dividing a market into smaller segments with distinct
needs, characteristics, or behaviors that might require separate marketing strategies
or mixes.
• Segmenting consumer markets
• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation
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Market Segmentation
Segmenting Consumer Markets
Geographic segmentation Demographic segmentation
divides the market into different divides the market into segments
geographical units such as based on variables such as age,
nations, regions, states, Geographic Demographic life-cycle stage, gender, income,
counties, cities, or even segmentation segmentation occupation, education, religion,
neighborhoods. ethnicity, and generation.
Psychographic segmentation Behavioral segmentation
divides a market into different divides a market into segments
Psychographic Behavioral based on consumer
segments based on social class, segmentation segmentation
lifestyle, or personality knowledge, attitudes, uses of a
product, or responses to a
characteristics. product.
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Market Segmentation
Segmenting Consumer Markets
Behavioral Segmentation
• Occasions: when the consumers get the
idea to buy.
• Benefits sought: major benefits the
consumers look for.
• User status: nonusers, ex-users, potential
users, first-time users, regular users.
• Usage rate: light, medium, heavy users.
• Loyalty status: loyal, somewhat loyal,
disloyal.
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Market Segmentation
Segmenting Consumer Markets
Multiple segmentation is used to identify
smaller, better-defined target groups.
Experian’s Mosaic USA system classifies U.S.
households into one of 71 lifestyle segments
and 19 levels of affluence.
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Experian Mosaic - UK
Market Segmentation
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
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Market Segmentation
Segmenting International Markets
Geographic
Economic factors
location
Political and legal
Cultural factors
factors
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Market Segmentation
Segmenting International Markets
Intermarket segmentation involves forming segments of consumers who have
similar needs and buying behaviors even though they are located in different
countries.
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Market Segmentation
Requirements for Effective Segmentation
Measurable Accessible Substantial
Differentiable Actionable
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Market Targeting
Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
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Market Targeting
Selecting Target Market Segments
A target market is a set of buyers who share common needs or
characteristics that the company decides to serve.
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Market Targeting
Figure 7.2 Market-Targeting Strategies.
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Market Targeting
Selecting Target Market Segments
Undifferentiated marketing targets the whole market with one offer.
• Mass marketing
• Focuses on common needs rather than what’s different
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Market Targeting
Selecting Target Market Segments
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
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Market Targeting
Selecting Target Markets
Concentrated marketing targets a large
of a smaller market.
• Limited company resources
• Knowledge of the market
• More effective and efficient
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Market Targeting
Selecting Target Market Segments
Micromarketing is the practice of tailoring products and marketing
programs to suit the tastes of specific individuals and locations.
• Local marketing
• Individual marketing
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Market Targeting
Selecting Target Market Segments
Local marketing involves tailoring brands and promotion to the needs
and wants of local customer segments.
• Cities
• Neighborhoods
• Stores
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Market Targeting
Selecting Target Markets
Individual marketing involves tailoring
products and marketing programs to the needs
and preferences of individual customers.
Also known as:
• One-to-one marketing
• Mass customization
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Market Targeting
Selecting Target Market Segments
Choosing a targeting strategy depends on
• Company resources: choose narrow targeting if the resources are limited.
• Product variability: undifferentiated is suitable for uniform products.
• Product life-cycle stage: undifferentiated or concentrated for introduction stage,
differentiated for mature stage.
• Market variability: undifferentiated when there is little market variability.
• Competitor’s marketing strategies: when competitors use undifferentiated
strategy, choose differentiated or concentrated strategy.
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Differentiation and Positioning
Product position is the way the product
is defined by consumers on important
attributes.
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Differentiation and Positioning
Positioning maps show consumer
perceptions of marketer’s brands
versus competing products on
important buying dimensions.
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
• Identifying a set of possible competitive advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
• Communicating and delivering the chosen position to the market
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Competitive advantage is an advantage over competitors gained by
offering consumers greater value, either through lower prices or by
providing more benefits that justify higher prices.
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible competitive
advantages to differentiate along the lines of:
Product
Services
Channels
People
Image
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
A competitive advantage should be:
Important Distinctive Superior
Communicable Preemptive Affordable
Profitable
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Value proposition is the full mix
of benefits upon which a brand is
positioned.
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Positioning statement summarizes company or brand positioning using this form:
To (target segment and need) our (brand) is (concept) that (point of difference)
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Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Positioning statement summarizes company or brand
positioning using this form: To (target segment and need)
our (brand) is (concept) that (point of difference)
Positioning Statement Example for Evernote:
“To busy multitaskers who need help remembering things,
Evernote is a digital content management application that
makes it easy to capture and remember moments and
ideas from your everyday life using your computer, phone,
tablet, and the Web.”
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Differentiation and Positioning
Communicating and Delivering the Chosen Position
Choosing the positioning is often easier than implementing the position.
Establishing a position or changing one usually takes a long time.
Maintaining the position requires consistent performance and communication.
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In-class Exercise
Discuss with your project on the relevant
segmentation, differentiation, targeting and
positioning for your chosen product.
Share your discussion results:
[Link]
References
• Kotler, P., & Armstrong, G. (2018). Principles of Marketing (17th ed.). Upper
Saddle River, New Jersey: Pearson Education, Inc. ISBN: 9781292220178