Principles of Marketing

Global Edition
Kotler and Armstrong

Chapter 7:
Customer-Driven
Marketing Strategy
Creating Value for Target
Customers

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Customer-Driven Marketing Strategy

AirAsia has developed a competitive advantage by targeting

price-conscious, short haul travelers who don’t mind a no-frills
service if it means lower fares.

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 Customer-Driven Marketing Strategy
Learning Objectives

• Objective 1: Define the major steps in designing a

customer-driven marketing strategy: market
segmentation, targeting, differentiation, and
positioning.
• Objective 2: List and discuss the major bases for
segmenting consumer and business markets.

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 Customer-Driven Marketing Strategy
Learning Objectives

• Objective 3: Explain how companies identify attractive

market segments and choose a market-targeting
strategy.
• Objective 4: Discuss how companies differentiate and
position their products for maximum competitive
advantage.

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Customer-Driven Marketing Strategy
Learning Objective 1

• Define the major steps in designing a customer-driven

marketing strategy: market segmentation, targeting,
differentiation, and positioning.

Customer-Driven Marketing Strategy

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 Customer-Driven Marketing Strategy

FIGURE | 7.1
Designing a Customer-Driven Market Strategy

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Customer-Driven Marketing Strategy
Learning Objective 2

• List and discuss the major bases for segmenting

consumer and business markets.

Market Segmentation

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 Market Segmentation

Market segmentation requires dividing a market into

smaller segments with distinct needs,
characteristics, or behaviors that might require
________________________________.

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 Market Segmentation

• Segmenting consumer markets

• Segmenting business markets
• Segmenting international markets
• Requirements for effective segmentation

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 Market Segmentation
Segmenting Consumer Markets

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation

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 Market Segmentation
Segmenting Consumer Markets

Geographic segmentation divides the market into

different geographical units such as nations, _______,
states, counties, cities, or even ____________.

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 Market Segmentation
Segmenting Consumer Markets

Demographic segmentation divides the market into

segments based on variables such as age, life-cycle
stage, gender, _____, __________, education, religion,
ethnicity, and generation.

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 Market Segmentation

Segmenting Consumer Markets

Age and life-cycle stage segmentation divides a

market into different age and life-cycle groups.

Gender segmentation divides a market into different

segments based on gender.

Income segmentation divides a market into

different income segments.

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 Market Segmentation
Segmenting Consumer Markets

Psychographic
segmentation
divides a market DUNKIN
into different Pic

segments based
on __________,
_________, or
personality
characteristics.

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 Market Segmentation

Segmenting Consumer Markets

Behavioral segmentation divides a market into

segments based on consumer knowledge, ________,
________________, or responses to a product.

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 Market Segmentation

Segmenting Consumer Markets

Behavioral Segmentation
• Occasions
• _____________
• User status
• ____________
• Loyalty status

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 Market Segmentation
Segmenting Consumer Markets

Using Multiple Segmentation Bases

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 ________.

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 Market Segmentation
Segmenting International Markets

Geographic Economic
location factors

Political and ________

legal factors factors

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 Market Segmentation

Requirements for Effective Segmentation

Measurable Accessible __________

__________ Actionable

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 Market Segmentation
Segmenting International Markets

___________ 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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Customer-Driven Marketing Strategy
Learning Objective 3

• Explain how companies identify attractive market

segments and choose a market-targeting strategy.

Market Targeting

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 Market Targeting
Evaluating Market Segments

• Segment size and _______

• Segment structural _____________

• Company objectives and _________

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 Market Targeting
Selecting Target Market Segments

A target market is a set of buyers who share

common ____________________ that the
company decides to serve.

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 Market Targeting
Selecting Target Market Segments

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.
• ____ marketing
• Focuses on ______ 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 ______ for each.
• Goal is to achieve higher sales and
stronger position
• More ________ than undifferentiated
marketing

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 Market Targeting
Selecting Target Market Segments

Concentrated marketing
targets a _____ of a
smaller market.
• Limited company
________
• Knowledge of the market
• More effective and
efficient
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 Market Targeting
Selecting Target Market Segments

Micromarketing is the practice of _______

products and marketing programs to suit
the tastes of specific individuals and
locations.
• _____ 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 _____
______________.
• Cities
• Neighborhoods
• Stores

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 Market Targeting
Selecting Target Market Segments

Individual marketing
involves tailoring
products and marketing
programs to the needs
and __________ of
individual customers.
• Also known as:
• One-to-one marketing
• _________________

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 Market Targeting
Selecting Target Market Segments

Choosing a targeting strategy depends on

• Company resources
• ________________
• Product life-cycle stage
• Market variability
• __________________________

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 Market Targeting
Selecting Target Market Segments

Socially Responsible Target Marketing

• Benefits customers
with specific needs

• Concern for _________

segments

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Customer-Driven Marketing Strategy
Learning Objective 4

• Discuss how companies differentiate and position their

products for maximum competitive advantage.

Differentiation and Positioning

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 Differentiation and Positioning

Product position
is the way the
product is
defined by
consumers on
important
_________.

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 Differentiation and Positioning
Positioning Maps

Positioning maps
show ________
___________ 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 __________

_________ to build a position
• Choosing the right __________________
• 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

__________________ is an advantage over competitors

gained by offering consumers greater value, either
through ____________ or by providing
____________________________.

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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
________
People
_____

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 Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Choosing the Right Competitive Advantage
A difference to promote should be:

Important Distinctive _________

Communicable __________ Affordable

Profitable

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 Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy

Selecting an Overall Positioning Strategy

_______________
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

______________________ 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

____________________ 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

__________________________.

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