SMM 4.2

• Customer Value–driven Marketing Strategy


  Segmentation, Targeting, Differentiation, and Positioning

  
• Designing a customer value–driven marketing strategy

  1. Market segmentation

  2. Targeting

  3. Differentiation

  4. Positioning

  
• Market segmentation

  • Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors
• Major segmentation variables for consumer markets

  • Geographic
  • Demographic
  • Psychographic
  • Behavioral
• Geographic segmentation


  Dividing the market based on geographical units
• Demographic segmentation


  Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation
• Psychographic segmentation


  Dividing a market into different segments based on lifestyle or personality characteristics
• Behavioral segmentation


  Dividing buyers into segments based on their knowledge, attitudes, uses, or responses to a product
• Marketers rarely limits their segmentation analysis to only one variable, they often use multiple segmentation bases
• Requirements for Effective Segmentation

  • Measurable
  • Accessible
  • Substantial
  • Differentiable
  • Actionable
• Segment Size and Growth

  Firms need to assess segment size and growth to determine attractiveness
• Segment Structural Attractiveness

  Long-term segment attractiveness is influenced by structural factors like competition, substitutes, and bargaining powers
• Company Objectives and Resources

  Firms must align segment selection with their objectives and resources
• Targeting Strategies


  • Undifferentiated Marketing
  • Differentiated Marketing
  • Concentrated Marketing (Niche Marketing)

  
• Undifferentiated Marketing Strategy


  Targets the entire market with one offer, ignoring segment differences
• Differentiated Marketing Strategy


  Targets multiple market segments with separate offers for each
• Concentrated Marketing Strategy (Niche Marketing)


  Targets one or a few smaller segments or niches instead of a broad market

  
• Micromarketing


  Tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments
• Micromarketing Strategies


  • Local Marketing
  • Individual Marketing (Mass Customization)
• Consideration Factors for Choosing Targeting Strategy

  • Company Resources
  • Product Variability
  • Product Life-Cycle Stage
  • Market Variability
  • Competitors' Strategies

  
• Differentiation


  Differentiating the market offering to create superior customer value

  
• Positioning


  Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

  
• Criteria for Which Differences to Promote

  • Distinctive
  • Superior
  • Communicable
  • Preemptive
  • Affordable
  • Profitable
• More for More Positioning

  Offering the most upscale product or service and charging a higher price to cover the higher costs
• Differentiation & Positioning


  • Distinctive
  • Superior
  • Communicable
  • Preemptive
  • Affordable
  • Profitable
• More for the Same Positioning

  Positioning a brand as offering more value for the same price compared to competitors
• The Same for Less Positioning


  Offering products at lower prices without compromising quality
• Less for Much Less Positioning

  Market for products offering less and costing less
• "More for Less" value proposition aims to offer superior value at a lower price

  
• Sustaining "More for Less" position challenging in the long run due to increased costs
• Each brand should adopt a positioning strategy tailored to its target markets
• Differentiation key: "More for more" appeals to one market segment, "Less for much less" to another

  
• Room for multiple companies in a market, each occupying different positions
• Crucial for each company to develop a unique positioning strategy to appeal to target consumers