Marketing Management

18 April 2011

Customer-Driven Marketing Strategy: Creating Value for

Target Customers

Market Targeting

Creating Value for Target Customers

Evaluating Market Segments

• Important to collect and analyse data on segment sales, growth rates and expected profitability

• Companies look at three (3) factors in evaluating market segments

• Segment Size and Growth• Segment structural attractiveness• Company objectives and resources

Business Segmentation Process

Selecting Target Market Segments

• After concise segment evaluations, decide on particular segments to target

• Target Market: A set of buyers sharing a common need or characteristics which the company decides to serve

• Marketing Target Strategies vary from very broad to being very specific

• Undifferentiated Marketing (Mass Marketing)• Differentiated Marketing (Segmented Marketing)• Concentrated Marketing (Niche Marketing)• Micro Marketing (Local or Individual Marketing)

Marketing Targeting Strategies

• Undifferentiated: A market coverage strategy where the company ignores market segment differences and selects to target the whole market – focuses on common needs of customers

• Differentiated: A market coverage strategy where the company targets several market segments and provides separate offers for each segment – focuses on differentiated needs of customers

Marketing Targeting Strategies

• Concentrated: A market coverage strategy where the company targets a dominant share of one or a few select segments – focuses on serving niches

• Micro Marketing: A market coverage strategy where the company focuses on tailoring products and programs to the needs of individuals and local groups

• Local Marketing – tailoring brands and promos to needs and wants of locals in cities, suburbs, stores

• Individual Marketing - tailoring brands and promos to needs and wants of individual customers e.g. one-on-one marketing

Choosing Targeting Strategies

• Market targeting strategies are dependent on:

• Company Resources• Product Variability• Product Life Cycle Stage• Market Variability• Competitors’ Marketing Strategies

Differentiation and Positioning

• Marketers plan positions to give their products advantages in selected target markets through marketing mixes

• Product Positioning: The way the product is defined by consumers on important attributes – the position it occupies in a consumer’s mind compared to competing products

• Consumers organise products, services, and companies and “position” them in their minds

• Marketers should not leave their product’s positioning to chance

Differentiation and Positioning Strategy

• A brand’s positioning must serve the needs and preferences of well defined target markets

• Differentiation and Positioning task consists of three steps:

• Identifying possible Value Differences and Competitive Advantages

• Choosing the right competitive advantage• Selecting an overall positioning strategy

Differentiation and Positioning Strategy

Identifying Possible Value Differences and Competitive

Advantages• Marketers must understand customer’s

needs better than their competitors• Marketers need to deliver more customers

value to gain a competitive advantage• A company has to live up to its promises

and not make empty promises• A company can differentiate through its

products, services, channels, the people it employs and its image

Choosing the Right Competitive Advantage

• This entails choosing the number of differences to promote and which specific ones to promote

• Number of Differences to Promote• Every company should have a Unique Selling Point (USP)• Each brand must have its own main USP

• Differences to Promote• Not all differences are great differentiators• A great difference satisfies the following: important,

distinctive, superior, communicable, pre-emptive, affordable, profitable

Selecting An Overall Positioning Strategy

• Full position of a brand is called the brand’s Value Proposition

• Value Proposition: the full mix of benefits which differentiates and positions the brand

• Possible Value Propositions• More for More• More for the same• The same for Less• Less for Much Less• More for Less

Positioning Map

Product Positioning

Positioning Statement

• Positioning Statement: A statement which summarises the company or the brand’s positioning

• The statement incorporates• The need• Target Segment• The brand• The concept• The point of difference

• The brand’s superiority is outlined in its point of difference

• All the company’s marketing mix effort must support the positioning strategy

See you next time.

Cheers Guys!